Confidence in the real estate market has continued remaining strong. Nationally, the vacation homes sales are starting to surge again. Locally, since the beginning of 2014, inventory is hard to keep because of the demand for properties in Breckenridge and the surrounding areas. This rise in purchases is largely a result of rising wealth and higher-income households.
Nationally, the number of second homes purchased, jumped 30% in 2013 to 717,000 homes, according to the National Association of Realtors. It is one of the largest gains in second homes purchases since they began tracking the information in 2003. Several years ago, investing in real estate was considered to be a poor investment because of the large market bust. But the large increase in number of second homes sales signals a fast changing attitude about the value of residential real estate.
According to the Wall Street Journal, “Economists note that the vacation-home market was a beneficiary of last year’s big gains in the stock market and rising home values, bringing buyers more wealth and confidence.” This “wealth effect” gives people the confidence to spend more. There was also a large shift from stocks and investments to real estate.
Overall, in 2013, the vacation homes made up 13% of the U.S. homes sales. This is up from 2012, when the vacation market only totaled 11%. The Southern part of the United States made up a majority of the vacation home sales, totaling 41%. Who would not like living in a mild climate where it is warm most of the year? The West accounted for 28% of the vacation home sales followed by the Northwest (18%) and Midwest (14%). According to the Realtor association’s survey, the number of investors purchasing second homes declined by 8.5% last year compared to previous years. This is in part to the shrinking number of foreclosures and home prices rising.
The local market in Breckenridge and Summit County also have astounding 2013 year-end sales numbers. If you are interested in finding out more about the local market, please contact your Broker at Breckenridge Associates Real Estate. Call us at 800.774.7970 or 970.453.2200 or click here for the latest news about Breckenridge Real Estate.
Source: Wall Street Journal, "Wealth Effect Drives Vacation-Home Sales". April 3, 2014.
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