These days, a second home is more likely to be used as a vacation home for personal use, rather than as a real estate investment. Whether you’re looking for an easy weekend escape from the day-to-day hustle and bustle of work, or a place to relocate the family for a while when the kids are out of school, a second vacation home could be the perfect solution for you and your family.
Why Buy Now?
Lower prices and less competition top of the list of many factors that make this a good time to consider buying a secondary vacation home. The stock market woes and recent, lower 30-year fixed-mortgage interest rates are also converging to make this an opportune time to purchase a second home. The bidding wars are over too. That means less pressure on you to make a quick decision so you can afford to take your time.
Dollars And Sense
According to the National Association of Realtors (NAR) the median second-home price was $150,000 in 2010, down 11 percent from 2009 and roughly 25 percent from 2006. This is only slightly worse than the 22percent drop for the overall housing market. With the broader market still so down it might seem like the height of folly to jump into such unpredictable investments now. But most vacation-home buyers aren’t looking to make big investment profits. More than 80 percent of second-home buyers surveyed by the NAR in May reported that they bought to live in the house and enjoy it.
Many second-home buyers are well off enough to pay in cash and therefore avoid the restrictive and time-consuming mortgage process. Last year, 36 percent of vacation-home transactions were all-cash deals, up from 29 oercent in 2009 according to the National Association of Realtors. “If you have cash right now, you are in a rather unique position,” says Paul Dales, senior U.S economist with the research firm Capital Economics.
Location, Location, Location
That’s still the rule even when buying a second vacation home. Next time, we’ll look at where to buy and how to find the vacation location that best suits your wants, needs and desires.