Vacation and Resort Homes Rebound Indicator
As a real estate broker in a ski resort and vacation home area, I do almost no work with buyers or sellers relocating for their jobs. It's mostly about vacation homes, ski condos, and now an increase in retirees moving in permanently. Our market held on longer, and will come back faster than many, in my opinion. However, I wrote a post for my local real estate blog a week or so ago that tied our recovery to the stock market.I had a buyer who wanted to make a cash investment in a home to renovate and rent out until he is ready to retire. We crunched a lot of numbers over the phone and email, and he planned his trip. He still visited, but made it clear that the interim decline in the stock market had cut his net worth by 30+ percent, and he wouldn't be buying until he waited it out.
I would guess that other vacation and resort markets are experiencing a similar situation. I predicted locally that, when the Dow crosses 9500 in a solid uptrend, our buyers will come back ready to take advantage of lower prices. I am seeing an increase in activity on my IDX search pages, so maybe we'll get a business bump early in the year. However, the 9500 prediction is still one I like. We'll see if it comes to pass. I certainly hope so.
Hello James .. I am looking to get into that type of work – plus if I can be assistance in my line of work let me know.
James,
My situation here in Williamsburg, VA is similar in a lot of ways. I don’t really get any buyers here who are relocating for work either. And I think the stock market is having an effect. We don’t have many 2nd home buyers, though. Most of our buyers are retiring here, and this will be their primary home.
Figuring out the stock market impact is interesting. In many cases, I think it is a negative. However, for some folks, the dip in the market might motivate them to make a move. We get most of our people from the Northeast. It’s much more expensive to live up there, so that might provide a motivation to move sooner.
The biggest negative impact we see is the tight mortgage money. The rates are down, but that doesn’t really help anybody if the banks aren’t making the loans. Our buyers are often buying with cash, but the mortgage market affects their ability to sell their homes. And, in this market, no one is moving here until they sell the current homes.
It’s all very interesting! We’ll see how it plays out. I’m sure it will be fine in the long run, but my gut tells me we are in for another tough year for residential sales.
Susan Krancer
REALTOR
Liz Moore and Associates
http://www.WilliamsburgGolfProperties.com
Susan,
Thanks for the insightful comment. Maybe we’ll see whose market rebounds first. I’ll race you!
Jim
In Woodstock, NY we are experiencing something similar. However, we have found a huge increase in cash sales by baby boomers who are looking to remove some funds from the stock market to purchase a property for the family. A move back to quality of life and “using their money” rather than watch it managed or mismanaged,in some cases.
I am a real estate broker in Myrtle Beach, SC specializing in ocean front condos and second homes. Our ocean front condos require a condotel type mortgage because they don’t pass the condo questionaire due to the majority of owners rent these condos and only use them 2-3 weeks a year.
Last year, about August 2008, the few lenders who still had the program stopped writing on all condos on the ocean front if they were under 500 heated square feet. That effectively knocked ALL financing out for studios. Then, on February 1, 2009 the few lenders left upped the minimum square footage requirement to 750 heated. So now we can only get this financing on 2 or 3 bedrooms leaving thousands of sellers of studios and one bedrooms to be able to sell to cash buyers only. I just talked to one of the remaining lenders yesterday and he stated that his bank was pulling out entirely.
I am talking about buyers with excellent credit and minimum 25% down. This is so frustrating. There is going to be blood letting all over the beach. I am very concerned.
Susie,
It sounds really difficult there. I tried some web searches but none produced any avenues for relief in your situation. One would hope that some local banks might be in the position to loan on these units, though probably at a rate penalty.
Good luck.
Jim