Posts Tagged ‘investment property’
Home Buyer Motivation at Highest Level in Years
According to a survey by Move.com, 12.1 percent of homebuyers intend to purchase an investment property this year, compared to only 5.6 percent of buyers polled in April. 
The percentage of investors shopping for property also jumps higher when it comes to foreclosed property. 42 percent of foreclosure buyers are purchasing for an investment. 57.6 percent of foreclosure shoppers plan to live in the home they buy.
The survey also shows that 23.6 percent of investors and buyers believe that home prices are already as low as they will go. Nearly 20 percent feel a sense of urgency when searching for a bargain.
Another factor motivating home buyer’s off the sidelines is the real threat of rising interest rates. Wall Street guru’s, who agree on very little, warn that lending rates will rise in the near future. With real estate prices at their lowest levels, buyers risk much more in waiting to purchase, than they do by locking in record low rates on their loan.
Prediction: We believe the leading indicator of an interest rate hike will be falling unemployment claims. When unemployment claim filings fall below 500,000 per month, a rate hike is likely!
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Sales of Second Homes Drop, but Find Out Who Bought and Where
According to the National Association of Realtors (NAR), the number of people who purchased a vacation or investment home fell by 30 percent last year. And, more than 40 percent of those who did purchase a second home paid cash.
“We expected vacation home sales to fall given the impact of a declining economy”, said Lawrence Yun, chief economist for the NAR. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix”, state Yun.
Vacation and second home sales mirrored the sales for primary residences in terms of price declines. The median price of a vacation home dropped to $150,000 in 2008, down from $195,000 (or, 23 percent) from 2007 levels.
Other Findings from the March Survey are:
- Who was the “Average Buyer” of Vacation Property in 2008? The average age of a vacation home buyer was 46 years old. They purchased a property that was generally 316 miles from their primary residence. Their median household income was $97,200.
- Who was the “Average Investment Home Buyer in 2008? The average age of an investment buyer was 47. They earned a median income of about $85,000 and purchased investment property nearby their primary residence. The median distance for an investment purchase was 19 miles from their home.
- What type of Property was purchased for a Vacation Home? 70 percent were detached, single family residences; 18 percent were condo’s; 5 percent town or row houses; 7 percent other.
- Types of Property Purchased for Investment: 64 percent were detached single family homes; 22 percent condos; 8 percent town or row houses; 6 percent other.
- Where did Vacation Home Buyers Shop? 26 percent bought in small towns; 23 percent rural areas; 23 percent resorts; 20 percent suburbs; 8 percent cities or urban areas.
- Where did Investment Buyers Shop? 28 percent purchased in the suburbs; 20 percent in a city or urban area; 23 percent rural area; 8 percent in a small town; 6 percent in resort areas.
Hopefully, the survey results will help home sellers picture who the likely buyer of their vacation or investment property may be. Picturing who the customer is likely to be is important when target marketing to their needs.
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