Vacation Home Market Heating Up
As consumer confidence, the economy, and job market all make gains, more Americans are feeling like they have money to spend on second residences and summer homes. Low interest rates are still a big draw.
Vacation home sales increased 10 percent nationwide in 2012, according to the National Association of REALTORS®. Real estate professionals are also reporting sales have been strong this spring in many vacation home hot spots.
"A lot of buyers who were sitting on the sidelines decided last year was probably a good time to take advantage of buying a vacation home," says Paul Bishop, NAR’s vice president of research. "They were feeling pretty good about their own financial situation, given the growth in the market and in the economy."
In vacation home hot spots like the Hamptons, home prices are “roaring back” and rentals are fully booked for the season, CNBC reports.
"We've seen bidding wars in the four to five million dollar range as well as in the overall market," Laura Nigro, a real estate broker in Bridgehampton, N.Y., told CNBC. "It's so much better than when the 2008, 2009 economy shrank and people were very much afraid to invest in anything.”
Mostly fueling the demand for vacation homes in the Hamptons has been buyers from China, Nigro says.
After super storm Sandy struck the coast last year, more buyers are evaluating the FEMA flood requirements more closely and coastal erosion zones before buying, real estate professionals report. But the storms of the past aren’t appearing to dampen their willingness to buy.
For example, New Jersey beach vacation spots in Avalone and Stone Harbor were hit by Sandy last year, but second-home buying activity remains strong and there was no big price fluctuation after the storm, says Allan Dechert, co-owner of Ferguson Dechert in Avalon.
Source: “Vacation home sales sizzle; rentals book up,” CNBC (May 20, 2013) and “Desire For Vacation Homes Heating Up, Sales Strong,” Investor’s Business Daily (May 16, 2013)
