Vacation-home sale rise, investment property sales plummet?
Here in Summit County Colorado home to four of the United States top ski resorts we are seeing an interesting trend. I call it the vacation home investment.
What is a vacation-home? It is a place where you and your family go a few times a year to relax or to "Just get away from it all". However in the back of your mind your goal is that it will appreciate in value even if you won't admit it publicly or to your loved ones who love to go there.
We are seeing a new mindset here in Summit County. I like to call it ‘the vacation-home Investment". It's no secret with areas like Breckenridge, Keystone, Frisco, Lake Dillon, and Eagles Nest at the Raven Golf course here in Summit County our Real Estate market is hot. Buyer's motives are changing. Many now not only see buying here a lifestyle choice but a sound investment for their future.
It's no wonder we are seeing this shift in the market, take a look at what the National Association of Realtors reported in April 2007:
NARs annual Investment and Vacation Home Buyers Survey shows vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005. By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005.
The Baby Boomer effect:
The median age of vacation-home buyer was 52 in 2005. That is right in the heart of the largest living generation in America. Vacation home buyers of today not only want lifestyle, but also require a sound investment. We are seeing this generation begin to re-allocate their monies to what they want. With an estimate wealth in the 10's of trillions baby boomers are a force to be reckoned with.
Vacation -home verses investment property:
With the recent boom and now bust in the nationwide housing market buyers and investors have become very discerning on their purchases and have begun liquidating non-performing assets. According to NAR "We expected the drop in investment sales because speculators left the market in 2006, which caused investment sales to fall much faster than the primary market, but the rise in vacation-home sales is based on strong demographic and lifestyle factors, with only modest interest in renting their properties to others". Appreciations of homes in the Summit County-Breckenridge area continue to outperform the national average. We are seeing solid appreciation at many of the top resort areas in the country with limited available land to develop and build. Speculators will always speculate in given markets. However there are a limited number of prime vacation spots that are true destination points which contributes to steady price increases in these areas.
Why buy now:
According to NAR Eight in 10 second home buyers considered it a good time to invest in real estate, compared with 57 percent of primary residence buyers. Summit County is experiencing double digit year over year price gains in single family homes according to the Summit Association of Realtors. (http://statspak.firstamericanmls.com/SUMStat/statrpt%20Comparison.pdf) Breckenridge weighed in an astounding 33% since last year. Most of us in this market only see this trend continuing. Summit County Is still one of the more affordable top destination resort areas in the country. If you look at the trend in Aspen and Vail we see Summit County doing something similar over the next 10 years.
It truly is time to look at vacation-home investment.
Jason Long
http://www.ski-homes-breckenridge.com/
Jason & Deanna Long are local Summit County Real Estate brokers, and focus on second and vacation home properties in and around the Breckenridge area.
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We think it's a good time for them to look for vacation homes in Lake Tahoe too... but so far this year Buyers are more reluctant than they have been in a while.
Like what you are doing here, and we're continuing to send the same message is well. What's cool about that is it's also true.
Thanks for putting this our there.
Gary we are not seeing to much reluctance here. If properties are priced right they move fast. The only ones sitting on the market are the overpriced. However buyers are not over doing it as in past years. We see some buyers from California fairly regularly. We always wonder why they look here and not in Tahoe its a great place too.
Our ski resorts here had their best year ever. With all of this global warming talk there was a big national ski resort operators convention just up the road in Vail. The big talk was snow and warming. They were saying Colorado based on its elevation, will see the snow last the longest. However no one is totaly out of the woods. We saw a small boost from that.
Do you think all the press about California housing prices are effecting you.
How did you fair with the fire. We were watching and praying for you. It's always a concern with us mountain folk.