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By Nat Criss | Other/Just Looking in Wilmington, NC
  • Vacation Home Sales Increased 10% in 2012

    Posted Under: Market Conditions in Wilmington, Rentals in Wilmington  |  April 12, 2013 12:34 PM  |  122 views  |  No comments
    Home with stone entrancewayThe resurgence of the vacation home market has been a hot topic for real estate pros over the last several months, and with the latest statistics revealing a 10 percent increase in sales, it's no wonder market analysts are hopeful for the year ahead.

    According to the National Association of Realtors' 2013 Investment and Vacation Home Buyers Survey, sales of vacation homes increased 10.1 percent from 502,000 in 2011 to 553,000 in 2012. These findings suggest a growing demand for vacation real estate after years of market struggle; however, the growth has been slow. The NAR reports that vacation home sales accounted for 11 percent of all transactions in 2012, a share that is unchanged since 2011. 
    Investment home purchases declined 2.1 percent to 1.21 million from 1.23 million in 2011, but despite this decline, investment property sales remain strong. Investment property sales made up 24 percent of all transactions in 2012, down from 27 percent in 2011, marking the second highest share since 2005.

    Here's what NAR chief economist Lawrence Yun had to say regarding the second home market:
    "We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw."

    Yun went on to say that the ongoing strength of investors has contributed to the market's overall health and stability, but their presence may fade some in the near future.

    "Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals," said Yun.  "With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years." Plus, historically low mortgage rates for rental properties have made real estate investing that much sexier of an investment.

    The NAR reports that the median price for an investment home was $115,000 in 2012, up 15 percent from $100,000 in 2011. The median vacation home price was $150,000 in 2012, representing a fairly significant yearly price increase from $121,300 in 2011. This is likely due to more higher-priced property entering the market in 2012. 

    Cash purchases remain common among the investment and vacation home market, with half of investment buyers and 46 percent of vacation home buyers paying cash in 2012. Among those buyers who financed their purchases with a mortgage, large down payments were typical, the NAR reports. The median down payment for both investment and vacation home buyers was 27 percent, the same as in 2011.

    The driving forces behind investment and vacation property purchases seem to be rental income and recreational lifestyles, respectively. According to the NAR, 80 percent of vacation home buyers said they wanted to use the property for personal vacations or as a family retreat. Fifty-five percent of investment property buyers named rental income as the main reason for their purchase.
    For more details on the NAR's 2013 Investment and Vacation Home Buyers Survey, visit the original press release here: http://www.realtor.org/news-releases/2013/04/2012-vacation-home-sales-up-investment-dips-but-stays-elevated-prices-rise
  • Housing Growth Predicted for 2013

    Posted Under: Market Conditions in Wilmington  |  January 18, 2013 11:26 AM  |  151 views  |  No comments

    Economists may have some exciting news for the real estate industry. According to recent reports, the U.S. housing market is anticipated to grow soon, with housing sales and price stability boosting demand for purchase financing in 2013. 

    A recent article from Inman News reports that the Mortgage Bankers Association (MBA) predicts purchase loan originations to grow by 16 percent next year, to $585 billion from an estimated $503 billion in 2012. Jay Brinkmann, chief economist for the MBA, says modest increases in home prices, an increase in new home sales and a more financed purchases from non-investors will drive 2013's growth. 

    "The originations forecast is based on expectations of very modest increases in economic growth in 2013 relative to 2012, but growth nonetheless," Brinkmann said in a statement dated October 23. "We expect gross domestic product to rise 2.0 percent in 2013 versus only 1.6 percent in 2012, about equal to the growth rate in 2011 but well below the 3.1 percent growth rate we saw in 2010," Brinkmann continued. "The growth will be driven by a combination of the biggest annual increase in residential fixed investment we have seen since 1992, as well as small increases in consumer spending and business investment."
    The MBA isn't the only real estate organization predicting future growth for the housing industry. According to the same Inman News article, mortgage giants Fannie Mae and Freddie Mac are also expecting some promising changes. In their October 2012 forecast, Fannie Mae economists predict sales of new and existing homes will climb by 4.2 percent next year, to 5.19 million homes. Even more significant, a dramatic 11 percent growth in purchase loan originations is expected, reaching $567 billion.

    Freddie Mac's economists expect sales of new and existing homes to climb 7.2 percent from in 2012 to 5.35 million in 2013. They also expect this momentum to continue through 2014, with an additional 8.4 percent increase to 5.8 million sales. Despite this projected growth in new and existing home sales, Freddie Mac anticipates a decrease in total loan originations; however, this is due to expectations that the refinancing boom that was underway in the fall will now start to wind down.

    Additional Resource:

  • Housing Affordability at a 20-Year High

    Posted Under: Market Conditions in Wilmington, Home Buying in Wilmington  |  September 5, 2012 12:25 PM  |  93 views  |  No comments
    Pile of coins.If a home purchase is in your future, a recent study from the NAHB/Wells Fargo gauging the Housing Opportunity Index may spur you into action. A press release on May 17th stated that, "Nationwide housing affordability hit a new record high for a second consecutive quarter in the first three months of this year." The release also acknowledged that the current more stringent lending practices are making things difficult for many prospective buyers.

    The HOI takes into account the national median income figure, which is $65,000. Based on that, the HOI data showed that 77.5% of all new and existing homes sold in the first quarter of 2012 were affordable. The previous record was in 2011, when the index revealed that 75.9% of homes were within the price range of Americans considered to be median-income earners.

    • Among the major metro areas, a few of the most affordable choices are: Modesto, CA, Lakeland, FL, Grand Rapids, MI, Buffalo, NY, Dayton, OH, and Grand Rapids, WY.
    • Of the smaller metro markets, Fairbanks, AK, Davenport, IA, Kokomo, IN, Cumberland, MD, and several WVA cities were good spots to find reasonably priced homes.
    • As for those cities considered the least affordable, the metro area of White Plains, NY and Wayne, NJ, topped the list. Other high priced hot spots were San Francisco, CA, Honolulu, HI, Ocean City, MD, and Laredo, TX, along with a significant number of CA locations.
    NAHB's chairman, Barry Rutenberg, noted the extreme affordability levels of homes in 2012's first quarter, reflecting that those prices were the best they've been at any time within the last 20 years. He stressed the point that hardworking families are being shut out by overly tough lending requirements. He referred to the difficulties many face in obtaining a mortgage as a hurdle and said, "Without this significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace."

    Source: http://www.nahb.org/news_details.aspx?sectionID=135&newsID=15306


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