5th Apr, 2012

Summit County Real Estate Sales Hoping to Reflect NAR-Reported Surge

Despite the moderate snowfall this past ski season, the builders, investors, buyers, and sellers in the Summit County real estate market hope to ride the wave of increasing nationwide sales.  The National Association of Realtors® reported a surge in investment and vacation-home sales in 2011.

Summit County Colorado homes for sale include ski resort real estate in Breckenridge and Keystone, along with vacation homes near rivers or streams, and Lake Dillon homes, as well as secluded mountain cabins and elegant country homes in and around Breckenridge and Blue River and Summit County golf-course homes.

According to the National Association of Realtors®, “Sales of investment and vacation homes jumped in 2011, with the combined market share rising to the highest level since 2005.”  A survey conducted by the organization covered existing homes and new-home transactions throughout the United States.The survey of transactions in 2011 reveals a steep uptick from 749,000 investment-home sales in 2010 to over 1.2 million in 2011.  That is a phenomenal 64.5 percent increase.  Sales of vacation homes nationally also rose (albeit only 7 percent), while owner-occupied purchases fell 15.5 percent.

Real estate investors jumped into the market for many reasons.  Interest rates remain low and home prices are down.  Investors see that their money will more readily pay off through rental income than through bank account interest.  Many of these buyers are small-time investors and first-time investors capitalizing on the surplus of bank-owned real estate.The distressed market accounted for half of the investment-home purchases and 39 percent of vacation-home purchases.

RIS Media reported additional information in their March 29, 2012 article entitled, “NAR: Investment and Vacation Home Sales Surge in 2011.”  Almost half of the investment buyers in 2011 paid cash as did 42 percent of vacation-homebuyers.  In addition, buyers who financed purchases with mortgages contributed large cash down payments to the transactions.

NAR chief economist Lawrence Yun explained a large number of cash purchases.“Given the tight credit in recent years, many would-be normal homebuyers for owner occupancy declined.”

The typical investment-home and vacation-home buyer in 2011 had a median age of 50 years and earned over $85,000 annually.  Generally, investment homes were purchased within an average 25 miles of the owners’ primary residences.  A good number were purchased for the use of family members, i.e. school housing and most are in suburban areas.  These investors plan to hold onto the properties for a median 5 years.

The typical vacation home purchased in 2011 was located a median 305 miles from primary residences.  A third of the vacation homes were within 100 miles of primary residences with another third more than 500 miles away.  Vacation/recreation properties are in rural or suburban locations.

Vacation-home buyers plan to keep their vacation properties for a median of 10 years.  A good number of these buyers are younger households looking for long-term investments.Almost a third plan to use the properties as primary residences in the future.

For information about buying real estate in the scenic mountain villages, call Barrie Stimson, Breckenridge Realtor® at (970) 390-2560.

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