The National Association of Realtors recently released results of their 2012 Investment and Vacation Home Buyers Survey. It was a voluntary survey of more than 2,200 home purchases completed in 2011. The results show that sales of existing and new homes in 2011 for investment and second home purposes rose to the highest level since 2005.
The survey defines investment homes as residential property purchased primarily to rent to others or other investment purposes while vacation homes are recreational property purchased primarily for the buyer’s personal use. Sales of investment homes jumped a whopping 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation home sales rose 7.0 percent to 502,000 in 2011 from 469,000 the previous year. Surprisingly, owner occupied homes fell 15.5 percent to 2.78 million transactions. Those numbers translate to investment homes accounting for 27 percent and vacation homes 11 percent of all transactions.
Chief economist for the National Association of Realtors, Lawrence Yun said investors with cash were largely responsible for the increase in sales of investment and vacation homes. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said, “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”
With home prices so low all cash transactions have become more common in recent years. In 2011 almost half (49%) of all investment buyers paid cash while 42 percent of vacation home buyers did the same. Apparently those buyers only heard half of what Warren Buffet had to say about buying homes. They got the part about buy, buy, buy but glossed over the part where he mentioned that because interest rates are so low he would have a mortgage on any house he bought.
Central Oregon is a great place to own an investment or vacation home almost any time but current market conditions make buying a home now even more attractive. Let Preferred Residential make your investment or vacation home purchase the best you have experienced. Call us. (541) 508-2930.