yucantantimes.com
Jun 19th, 2014
Buoyed by gains in their investments and home equity, vacation-home buyers have returned to the beaches, woods and mountains in search of bargains on vacation properties. Vacation-home sales rose 29.7 percent in 2013 from the year before, and the median price was up 13 percent, to $168,700, according to an annual survey by the National Association of Realtors.
Most buyers will use their homes for family vacations, and almost one-third anticipate living in them in retirement. The typical buyer is 47 and comes from a two-earner household with a median income of $90,660. More than one-third of buyers paid cash; of those who took out a mortgage in 2013, more than half put down 30 percent of the purchase price.
Beach Getaway
The stock market has given the vacation-home market a boost. Buyers in the 45-to-64 age group, who own the biggest share of financial assets, are selling some of them to raise the cash they need and are using dividend payments to cover mortgage expenses, says a report from mortgage guarantor Fannie Mae. Real estate agents say that buyers are also raising cash by borrowing against home equity in their primary residence — with, say, a low-costline of credit. The cost of mortgage borrowing is still low, despite interest rate increases over the past year. The average 30-year fixed rate was recently 4.3 percent.
Top destinations for vacation-home buyers in 2013 included Arizona and California, where home values overall have regained one-third of what they lost in the bust, and Florida, a relative bargain with prices up just 18 percent. Mountain locations, such as Asheville, N.C., and Vail, Colo., offer some of the lowest prices compared with coastal locations, and Michigan and Wisconsin are always relatively affordable.
The deeply discounted properties that were repossessed and then sold by banks are rare now, says Tampa, Fla., buyer’s agent Dawn Rae. But buyers can still find good deals — for instance, a three-bedroom townhome in the desirable northeast section of St. Petersburg, with a hard-to-find deep-water dock, recently listed for $314,900.
Most sellers have priced their homes realistically, says Rae, so you may not have much negotiating room. Prepare to put down a persuasive deposit or even make an all-cash deal.
Today’s buyers may face a demographic hurdle by the time they’re ready to sell. The population most likely to buy a second home (ages 45 to 64) is expected to grow more slowly than the total adult population over the next 20 years. But if you can get a place in the sun today for a price you can afford — that’s priceless.
Kiplinger’s Money Power
Source: http://www.chicagotribune.com/
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