|This is good information and great news for the market!|
|Last year’s sales of investment and vacation homessurged to their highest level since 2005, according to an annual survey of such transactions.The 2012 Investment and Vacation Home Buyers Survey by the National Association of Realtors® shows investment-home sales jumped 64.5 percent in 2011 compared to 2010, rising from 749,000 to 1.23 million. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.
Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.
(Editor’s note: NAR defines vacation homes as recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are defined as residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.
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.”
Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investments or saw a good investment opportunity.
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. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period.”
Other key findings of the survey, which was conducted in March, include;