Investment, Vacation Home Sales Soar to 2005 Levels

Sales of investment and vacation homes increased significantly in 2011, with the combined market share rising to its highest level since 2005, according to the National Association of Realtors. However, there are still some that find that using something similar to these phoenix vacation rentals instead of investing and buying vacation homes. Decisions like these are not ones to be rushed, especially if you are new to this. Thinking about the benefits of renting property could make your choice a lot easier, rather than just thinking about the negatives. Before agreeing to anything though, it may benefit you to check out a site like totalvegasrealestate.com, so you can get a better understanding of short term rental properties. The majority of us will have to make a decision about buying property at least once in our lives, so the more you know now, the better it will be in the long run. If you are interested in putting your property up as a rental vacation property, you may be interested in these ideas for marketing your rental property.

A survey covering existing-home and new-home transactions in 2011 shows investment-home sales surged 64.5 percent to 1.23 million last year, from 749,000 in 2010, the NAR said.
Vacation-home sales rose 7.0 percent to 502,000 in 2011, from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.
The portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.
Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010.
Cash-ready investors took advantage of market conditions in 2011, including historically low mortgage rates, heavily discounted properties in some phase of foreclosure and the allure of rising rental income.
Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.
“During the past year investors have been swooping into the market to take advantage of bargain home prices,” said NAR Chief Economist Lawrence Yun. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”
These home buying patterns shows the market can absorb foreclosures, Yun said.
“Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period,” he said.
All-cash purchases have become common in the investment- and vacation-home market, with 49 percent of investment buyers paying cash in 2011, as did 42 percent of vacation-home buyers.
Of buyers who financed their purchase with a mortgage, large down payments were typical. The median down payment for both investment- and vacation-home buyers in 2011 was 27 percent.
The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles.
Buyers plan to own their recreational property for a median of 10 years.

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