5.22.2006

Second Home Trends from NAR

Hi everyone,

I attended the National Association or REALTORS (NAR) Mid Year Meetings and Expo in Washington DC last week. In addition to taking classes toward a Certified International Property Specialist(CIPS), I sat in on the annual meeting of the newest specialty offered by our association: Resort and Second Home Property Specialist (RSPS). In that meeting, I learned about the trends we need to recognize and support with the investment style of Baby Boomers. Anyway, the following article from Realty Times is a great synopsis of these trends from the NAR, and I find it all very important...

New NAR Survey Reveals Motivations Of Second-home Owners
By Blanche Evans
May 15, 2006

It's important for the real estate industry to understand what motivates homebuyers and sellers which is why the National Association of Realtors has worked hard in recent years to understand the differences between types of homeowners, including those who buy more than one property. To help its members obtain more insight into clients and their needs, and thereby improve their services to those clients, NAR has heavily researched the phenomenon of second-home owners.

According to the preface of the 2006 National Association of Realtors Profile of Second-Home Owners, second-home owners are defined as those who "own one or more residential properties, in addition to a primary residence, and who use these properties either for vacation or investment purposes. Although both types of properties share several attributes, vacation homes are properties owned primarily for recreational use by the owner or their family, while investment properties are owned primarily to rent to others."

Ownership of more than one home is increasingly common, notes NAR, due to peak earnings of the baby boomer segment of the population, less-than-stellar returns in other financial assets other than real estate, and popular tax incentives (including capital gains exclusions) and loan programs that favor buying property over other investment instruments. For example, between 2000 and 2005, the value of homes nationwide rose over 50 percent, while the Standard & Poor's 500 Index returned just over 2 percent for the same period, says NAR.Older baby boomers dominate the second-home market as vacation-home owners (age 59) and investors (age 55) and most own multiple properties. About six in ten survey respondents own two or more homes in addition to their primary residence.

Observes David Lereah, NAR's chief economist, "Boomers believe in diversifying their assets, and most second-home owners see their purchase as being a better investment than stocks. A surprising majority of survey respondents hold multiple properties, and they are interested in purchasing additional homes."While the U.S. Census Bureau data shows there are 6.8 million vacation homes in the United States and 37.4 million investment units in addition to 74.6 million owner-occupied units, the line appears to be blurring between how owners define themselves:Twenty-one percent of vacation-home owners own two or more vacation homes. In addition, 34 percent of vacation-home owners report they own two or more investment properties.

Lifestyle figures prominently in their choices with half of vacation homes located in resort areas near water or sports features. Distance is about 220 miles; most owners say they drive to their vacation homes. Most homes were in the $300,000 range, less than the value of their primary residence.More than half of investment property owners, 53 percent, own two or more investment homes and 12 percent own two or more vacation homes.Financial gain is the motivator, with most rental properties chosen to generate income and within easy access -- 10 miles. Most homes were in the $200,000 range, lower than the investor's primary residence."We've always known that a certain segment has invested heavily in the rental market, and some people earn their living simply by holding and managing investment property. What we see now is a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate," says Tom Stevens, president of NAR.

Since 2003, two-thirds of second homes have been purchased through a real estate agent, while over four out of five primary homes are purchased using an agent. Thirty-two percent of all vacation-home owners and 24 percent of investment owners paid cash for their property. Combined with mortgages that have been paid-off, 82 percent of vacation homes and 75 percent of investment properties are owned free and clear. Of owners who purchased with a mortgage, the median downpayment on a vacation home was 27 percent and the median downpayment for an investment home was 23 percent.

When asked about the source of downpayment funds for more recent vacation-home owners with loans, who purchased since 2003, half said savings, 23 percent from the sale of other real estate, and 19 percent identified equity or sales proceeds from their primary residence.For more recent investment owners who purchased with mortgages, half said downpayment funds came from savings, 28 percent from equity or sales proceeds of their primary residence, and 18 percent from the sale of other real estate. Surprisingly, considering that one in three buyers in 2004 and many more were second-home buyers in 2005, that the most recent property was purchased a median of six years ago. Most second-home buyers have held additional properties for longer periods.Some believe investors are fleeing the marketplace, that may apply to speculators, but not for buy-and-hold investors. Thirty-five percent of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they planned to buy another property within two years, and 17 percent said they planned to purchase five or more additional properties. Under a third said they planned to sell a property within the next two years.
Copyright © 2006 Realty Times. All Rights Reserved.

6 comments:

Anonymous said...

Hello !.
You re, I guess , probably curious to know how one can manage to receive high yields .
There is no initial capital needed You may commense earning with as small sum of money as 20-100 dollars.

AimTrust is what you thought of all the time
AimTrust incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

It is based in Panama with affiliates around the world.
Do you want to become really rich in short time?
That`s your chance That`s what you wish in the long run!

I`m happy and lucky, I began to take up income with the help of this company,
and I invite you to do the same. If it gets down to choose a correct companion utilizes your funds in a right way - that`s the AimTrust!.
I make 2G daily, and what I started with was a funny sum of 500 bucks!
It`s easy to start , just click this link http://ogelisyc.1accesshost.com/irywywe.html
and go! Let`s take this option together to get rid of nastiness of the life

Anonymous said...

Hi !.
You re, I guess , probably very interested to know how one can reach 2000 per day of income .
There is no need to invest much at first. You may start earning with as small sum of money as 20-100 dollars.

AimTrust is what you need
AimTrust incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with structures around the world.
Do you want to become really rich in short time?
That`s your choice That`s what you wish in the long run!

I`m happy and lucky, I started to get income with the help of this company,
and I invite you to do the same. If it gets down to choose a correct partner who uses your savings in a right way - that`s the AimTrust!.
I take now up to 2G every day, and what I started with was a funny sum of 500 bucks!
It`s easy to get involved , just click this link http://juvoninocy.dreamstation.com/itumik.html
and lucky you`re! Let`s take this option together to feel the smell of real money

Anonymous said...

Good day !.
You re, I guess , probably curious to know how one can collect a huge starting capital .
There is no initial capital needed You may commense to get income with as small sum of money as 20-100 dollars.

AimTrust is what you haven`t ever dreamt of such a chance to become rich
AimTrust represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with structures everywhere: In USA, Canada, Cyprus.
Do you want to become really rich in short time?
That`s your choice That`s what you desire!

I`m happy and lucky, I began to get real money with the help of this company,
and I invite you to do the same. If it gets down to select a correct partner who uses your money in a right way - that`s the AimTrust!.
I take now up to 2G every day, and my first deposit was 1 grand only!
It`s easy to start , just click this link http://ynugaruki.envy.nu/cabybe.html
and go! Let`s take this option together to get rid of nastiness of the life

Anonymous said...

Good day, sun shines!
There have were times of hardship when I didn't know about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never imagined that there weren't any need in big starting capital.
Nowadays, I feel good, I begin take up real money.
It gets down to choose a proper partner who uses your funds in a right way - that is incorporate it in real deals, parts and divides the profit with me.

You can get interested, if there are such firms? I'm obliged to tell the truth, YES, there are. Please be informed of one of them:
[url=http://theblogmoney.com] Online investment blog[/url]

Anonymous said...

Good day, sun shines!
There have were times of hardship when I felt unhappy missing knowledge about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never imagined that there weren't any need in large starting capital.
Now, I'm happy and lucky , I begin take up real income.
It gets down to choose a correct companion who utilizes your money in a right way - that is incorporate it in real business, and shares the income with me.

You can ask, if there are such firms? I have to tell the truth, YES, there are. Please be informed of one of them:
http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

Anonymous said...

Glad to materialize here. Good day or night everybody!

Sure, you’ve heard about me, because my fame is running in front of me,
my name is James F. Collins.
Generally I’m a venturesome analyst. all my life I’m carried away by online-casino and poker.
Not long time ago I started my own blog, where I describe my virtual adventures.
Probably, it will be interesting for you to find out my particular opinion on famous gambling projects.
Please visit my diary. http://allbestcasino.com I’ll be glad would you find time to leave your comments.