Big Bear second home sales have always driven our local real estate market. With over 25 million people living within a 2 hour drive, Big Bear is a natural choice for families looking for a vacation home or investment property. Thanks to affordable prices and unlimited recreational opportunities, the local vacation rental market is one of the hottest in California.
The trend for second home purchases seems to be increasing across the country. The National Association of Realtors recently published the 2012 Investment and Vacation Home Buyers Survey, which showed a surge in sales of investment properties and vacation homes in 2011. As opposed to investment purchases, which are made out of the desire for rental income, vacation homes are driven by lifestyle factors and are purchased by households making an average of $88,000 a year. According to the National Association of Realtors, investment property sales account for over one third of all purchases. Forty-nine percent of those investors paid all cash in 2011.
My recent experience with a cash buyer looking for a Big Bear investment property is typical of what’s happening in the market. They made offers on two properties but were out-bid each time. They learned their lesson and when their agent (Coldwell Banker, of course) found them of another good buy in the area they liked they offered full price. It proves that well-priced properties are selling in Big Bear.
If you’ve been on the fence waiting for the market to bottom out, wait no further. The professionals at The Tim Wood Group have been helping their clients find the perfect investment and vacation properties for over 25 years. Give them a call today.
NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”
Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market.
Increased investor purchases are partly responsible for the large percentage of all-cash purchases seen in the last year. They make up around one-third of all purchases. Forty-nine percent of investors paid cash in 2011.
“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who aren’t hesitant to use cash,” Yun said. Of the buyers who didn’t use all cash they paid a hefty average 27 percent downpayment.
As opposed to investment purchases, which were made out of the desire for rental income, vacation homes were driven by lifestyle factors and were purchased by households making an average of $88,000 a year.
What portion of the market are these vacation sales? They accounted for 11 percent of all sales in the market.
Overall mortgage applications increased 4.8 percent from last week, according to the Mortgage Bankers Association (MBA). The refinance share of the market decreased again to 71.2 percent. Just a few months back it was over 80 percent.
“Applications to buy a home picked up last week, and are running more than two percent above the level reported at this time last year. Home purchase applications for conventional loans are now about 10 percent above last year’s level,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Applications for government loans increased by more than 10 percent over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April.”
More Real Estate and Second Home Owners;
- Main Considerations When Acquiring Vacation Homes – Many people have imagined of having their personal vacation homes. A vacation home is another property where one can take abode whenever you wish and be pleased. However, a lot of consideration should be taken into …
- Vacation Home Market Heating Up – The National Association of REALTORS (NAR) recently released a report on investment and vacation homes, with the headline “Investment and Vacation Home Sales Surge in 2011”. This week I wanted to share with you …
Tax Benefits for Second Homes and Vacation Homes – If you own a second home, then you want to be aware of some tax advantages that could save you money.