Vacation Home Market On the Up and Up
For a number of reasons, vacation rental sales are booming in the United States. This comes as interesting news in a depressed housing market that’s potentially years away from recovery. The rise in sales is most likely due to a combination of cash purchases, discounted prices, and rising stock portfolios.
“One in 10 real-estate transactions in 2009 was for the purchase of a vacation home,” reports the National Association of Realtors (NAR). This figure is significant because these properties are often big-ticket items right outside a larger city. “We haven’t felt energy like this in a long time,” said Ned Monell, an agent with Sotheby’s International Realty in Palm Beach, FL.
The Wall Street Journal gives several examples including K. David Hirschey, who runs a consulting business in Minneapolis. “After competing in a summer swimming competition on Madeline Island, Mr. Hirschey decided to buy a home there, perhaps to rent it a few years and maybe retire there eventually.”
Buyers who have almost perfect credit and can afford to put a 25% down payment on a loan are the only ones who seem to be able to take advantage of these record low housing prices. It will be interesting to see if this growth in vacation homes and rentals can sustain itself over time. Do you feel that housing prices are down to where they “should be” or is the market “undervaluing” real estate today?