Although some housing markets have remained somewhat stable during the world’s current economic downturn, all markets throughout the country have seen changes take place over the past year. Not only have real estate prices gone down, but so has the percentage of real estate sells. In addition to these most-publicized changes, however, some other interesting changes have also taken place in the world of real estate.
According to the National Association of Realtors (NAR), vacation homebuyers appear to be among those who are most actively seeking new real estate opportunities at this time. This is largely due to lower prices, which makes the purchase of a vacation home far more affordable than it was just two years ago. In fact, the NAR reports that the average price for a vacation home was $195,000 in 2007 while the average price dropped to $150,000 in 2008.
Not all people who are purchasing a vacation home are looking at it as a long term vacation residence, however, as the NAR found that only 58% of buyers planned to keep the home for 11 years or more. This statistic is representative of the group that is most actively making real estate purchases: investors. While vacation home sells still dropped by 31% last year, investment home sells dropped by only 17.2%. As a result, the total number of vacation home sells totaled about 512,000 last year, but investment homes accounted for 1.12 million sells. Primary residence homes, on the other hand, fell by 13% last year for a total of 3.77 million sells.
The NAR also reports that 58% of investors purchased real estate with the intent of using at as a rental property. Not only is now a good time to save money on rental real estate purchases, with the average price for investment home dropping from $150,000 in 2007 to $108,000 in 2008, but the current state of the economy has also increased the number of renters in the market. At the same time, as the number of sellers decide to hang onto their homes and to rent them out rather than take a significant loss in the sell, the market is likely to become more saturated by homes that are available for rent. Therefore, it is important for investors to carefully consider the market where they are thinking of making a real estate purchase and to consult with a knowledgeable real estate agent in the area. That way investors will be certain to pick up the best deals.
Shane Pollock is part of the Greater Raleigh Realty Team, and is a resident of Cary, North Carolina. Greater Raleigh Realty specializes in the real estate and relocation services with a focus on the areas surrounding Raleigh including Cary, Apex and Holly Springs. Shane’s goal is to help inform each homebuyer about the local areas around Raleigh and their neighborhoods. His "client first" approach ensures each family has all the necessary information they’ll need to make the most important financial decision of their life. His dedication speaks volumes to both local and out-of-state home buyers. If you, or someone you know, are interested in obtaining more information about Wake County or some of its municipalities like Cary, Apex, Holly Springs, or Morrisville, please contact Shane Pollock today or visit his Greater Raleigh Real Estate website.
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Jolenta Averill, Principal
Lake & City Homes Realty