WASHINGTON (MarketWatch) — Construction on new U.S. homes in March hit the highest rate in almost five years, as starts for apartments jumped, according to data released Tuesday by the Department of Commerce.
The report pointed to an ongoing rebound in housing activity: starts in March were up 47% from the same period in the prior year, the largest year-over-year growth since 1992.
Housing starts rose 7% in March to a seasonally adjusted annual rate of 1.04 million, the highest rate since June 2008. Economists polled by MarketWatch had expected construction starts in March to rise to a rate of 933,000 from an original February estimate of 917,000. The government on Tuesday also revised up February’s starts rate to 968,000.
YTD 2013 Starts Stronger Than 2012
Welcome to my March Bachelor Gulch Market Update. 2013 has started out a little stronger than 2012. We’ve had 5 sales year-to-date versus 4 last year. We also have 4 properties under contract versus only 2 last year.
The other graph shows the number of listings in Bachelor Gulch. We have been hovering in the 20 to 30 listings range for the past year. Typically we peak in the ski season but we didn’t see much increase this year.
Our other indicators are essentially flat. The average $/SF sales price is hovering in the $750/SF to $790/SF range.
The difference between final list price and sales price remains a little over 10%, an indicator our list prices are probably still a little too high.
One positive indicator is days on market. We have seen the average time a listing spends on the market drop from around 300 days to 200 days over the past year. That is about where we were at our peak.
I’m continually amazed at her work ethic, intelligence, patience, and management skills. Maybe she will make 40, who knows.
We attended a spectacular event in Vail last Thursday – the Lamb Cook-off which is a part of the Taste of Vail. It was held in Vail Village. Tasty lamb treats were offered by local restaurants as well as wine tastings from all over the US. The lamb dishes were absolutely delicious and the wine was excellent. It was an all-around special event. If you missed it, make plans to attend next year.
WASHINGTON (April 2, 2013) – Vacation home sales improved in 2012, while investment purchases remained elevated for a second consecutive year, according to the National Association of Realtors®.
NAR’s 2013 Investment and Vacation Home Buyers Survey,* covering existing- and new-home transactions in 2012, shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011. Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011.
Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from 2011, while the portion of investment sales was 24 percent in 2012, down from 27 percent in 2011, marking the second highest share since 2005.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales. “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,” he said.
Yun notes an ongoing investor presence. “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,” he said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
The median investment-home price was $115,000 in 2012, up 15.0 percent from $100,000 in 2011, while the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.
All-cash purchases remain common in the investment- and vacation-home market: half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers. Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35 percent of vacation homes.
Of buyers who financed their purchase with a mortgage in 2012, large downpayments remain typical. The median downpayment for both investment- and vacation-home buyers was 27 percent, the same as in 2011.
Investment-home buyers in 2012 had a median age of 45, earned $85,700 and bought a home that was relatively close to their primary residence – a median distance of 21 miles, although 29 percent were more than 100 miles away. Thirty-five percent of investment buyers purchased more than one property.
“Property flipping modestly increased in in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.”
Six percent of homes purchased by investment buyers last year have already been resold, and another 8 percent are planned to be sold within a year. In the 2011 study, 5 percent of investment homes were already resold, and 8 percent were planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of 8 years, up from 5 years in 2011.
Seventy-eight percent of all second-home buyers said it was a good time to buy, compared with 68 percent of primary residence buyers. “This suggests that second-home buyers tend to be a step ahead of general buyers in sensing a market recovery,” Yun said.
The typical vacation-home buyer was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence; 34 percent of vacation homes were within 100 miles and 46 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
Buyers listed many reasons buyers for purchasing a vacation home: 80 percent want to use the property for vacations or as a family retreat, 27 percent plan to use it as a primary residence in the future, 23 percent plan to rent to others and 23 percent wanted to diversify their investments or saw a good investment opportunity.
Fifty-five percent of investment buyers said they purchased for rental income, 30 percent wanted to diversify their investments or saw a good investment opportunity, and 20 percent wanted to use the home for vacations or as a family retreat.
Eleven percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.
Forty-five percent of vacation homes purchased last year were in the South, 25 percent in the West, 17 percent in the Northeast and 12 percent in the Midwest.
Thirty-six percent of investment properties purchased last in the South, 28 percent in the West, 20 percent in the Northeast and 16 percent in the Midwest.
Forty-seven percent of investment buyers said they were likely to purchase another investment property within two years, as did 37 percent of vacation-home buyers. Twenty-nine percent of vacation buyers said they were likely to purchase another vacation home within two years, as did 31 percent of investment buyers.
Approximately 42.8 million people in the U.S. are ages 50-59 – a group that dominated second-home sales in the middle part of the past decade and established records. An additional 43.1 million people are 40-49 years old, which is the prime age for current buyers, while another 40.1 million are 30-39.
NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 43.7 million investment units in the U.S., compared with 75.2 million owner-occupied homes.
NAR’s 2013 Investment and Vacation Home Buyers Survey, conducted in March 2013, includes answers from 2,326 usable responses about homes purchased during 2012. The survey controlled for age and income, based on information from the larger 2012 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
The 2013 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500 , or online at www.realtor.org/prodser.nsf/Research. The report is free to NAR members and costs $149.95 for non-members.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
# # #
*Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.
Breck’s Bobby Brown welcomes Vail Resorts to the world of Red Bull