By Jim Hester
As the stock market has hit new highs and the mortgage interest rates have hit new lows the sale of vacation homes are at the highest level of that market segment since vacation home sales record keeping begin in 2003. The National Association of Realtors (NAR) estimates that 1,130,000 vacation homes, condos and town houses were sold in 2014, up 57% from 2013. Last years estimated tally topped the previous high from 2006 to become the biggest year for vacation home sales volume since the NAR started tracking the vacation home market in 2003. Vacation homes accounted for 21% of all sales last year, the highest ever.
However, Mark Zandi, chief economist for Moody’s Analytics, suggested the results may be over stated due to the small sample size of buyers surveyed that purchased homes in 2014. Still Mr. Zandi noted that vacation home sales account of 20% of all residential sales and “that should more or less rise” over the next 10 years as incomes and the number of vacation home buyers increases. The NAR survey found that buyers last year had median household income of $94,380, up from $85,600 in 2013. The number of buyers will grow in the years ahead as 76 million plus baby boomers age and buy vacation homes that will become retirement homes.
Meanwhile, the prospect of rising home prices has spurred buyers to purchase sooner than later. Mortgage rates on 30 year fixed rate mortgages are going to increase later in 2015 as the Federal Reserve increases short-term rates. And median resale prices of all homes, which increased 7.5% from one year ago to $202,600 in February, are likely to rise further as the overall inventory of homes available for sale remains tight.
This sales trend in good news for Lake Lure and the surrounding area. The number of vacation properties including lots has been down since the peak in 2006. With an improving economy and a flood of “Boomers” we look forward to more folks moving into this area.
Jim Hester, Broker/Realtor, Cell: 828-447-0354, firstname.lastname@example.org