I love stories like this. 30% of homes purchased were second homes last year. Well, sounds good, eh? We're so flush with cash (oh, credit) that we're able to buy second homes by the boatload. Hey, we're Americans dammit - one home ain't enough for us!
Well, hate to burst the bubble, but once the Ponzi scheme is in full light, guess what happens to these second homes? Especially when rents don't cover 50% of the cost of ownership. Yup, they hit the market, sometimes at fire-sale prices.
Timber. Sure was fun while it lasted, eh?
It came as a big surprise to the real estate industry last year that second homes were accounting for more than one-third of annual sales.
Before 2005, the National Association of Realtors' survey techniques failed to gauge the size of this market accurately, even though anecdotal evidence had indicated a substantial increase in second-home purchases over the previous decade.
The second-home market has become so large that 140,000 of the nation's more than 1.6 million real estate agents acknowledged specializing in it in 2005, a 30 percent increase over 2004.
December 07, 2005
The easy one to sell: Second home sales surge - 30% of all purchases
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7 comments:
That pic is perfect
That fringe property out in the country with no jobs sure is a bear to sell in a slow market. Them folks that have lived there a while know it too,(Billie Bob saw you comin!) There is plenty of undeveloped land in Po-Dunk-Ville so guess what yer competing with when you go to sell in a down market. If your retired and pretty good with a shotgun you wont mind the dope addicts and trashy sporting girls tweekin on methamphetamine next door. Heck, they would probably like to rent from you or just move in when you're away. If you are lucky, they will just hook up to your water and power. I guess you wont be drivin up there as often as you thought with it costing $100 each way in yer Hummer! Take it from me! I was there in the crash of 91. When the city has a cold the country has the flu (bird flu).
On the positive side, it sure is pretty. Once you get past the deadly bugs, snakes, fires , and floods. You cant tell where heaven ends and the earth begins.
Here is my hindsight from the last time I lost all in the country.
1)Rent before you buy for a nice long while so you know what you are getting.
2)Have a good cash reserve as there are no jobs and money goes quick or bring solid skills or work with you.
3)Join a club or historical society and get to know the locals. Beg them to tell you the truth. They will tell you that you probably wont make it. They seen it before.
Was another 15% third home purchases?
I agree about that pic-- it's classic. But the guy's straw is flaccid... is that supposed to be symbolic??
It's not a surprise. The people that have exploded the real estate market are easy to spot. They are middle class yuppie idiots driving Suburbans and Tahoes around, towing boats and campers to the lake each weekend, and looking for a place to spend the last $300 of income that isn't being spent on other debt payments. How about a second home? Great place to put that money with a guaranteed 10%+ per year and never a decline.
Yeah, right.
They didn't mention that a lot of the second homes were actually bought by real estate agents or anyone connected. They have the inside scoop when something hits the market as well as having their loan terms already outlined. They are also the first ones to unload property whether it be a rental, vacation home or flipper. They can set their prices as they wish.
I agree about that pic-- it's classic. But the guy's straw is flaccid... is that supposed to be symbolic??
And she has to hold hers up!
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