Home slump spreads
Sales of investment and vacation homes plunged last year along with the rest of the housing market but still made up 1 out of every 3 homes sold, the National Assn. of Realtors reported Friday.
As easy credit dried up and speculators continued to vanish, investment home sales dropped 18% from 2006 levels. However, bargain hunters such as Daniel and Nancy Isom helped cushion the fall as investors snapped up about 1 out of every 5 homes sold last year.
“We saw there were a lot of foreclosures and a lot of opportunities,” said Daniel, 53, a resident of Lake Havasu City, Ariz. “We started looking for an old house and think we picked up a good deal.”
The Isoms bought a home in the area for $125,000 from a bank that had foreclosed on the previous owner.
The couple plans to finish renovating the 1980s stucco home by next week and rent it out until the market turns around.
Vacation homes suffered a larger decline of almost 31% from 2006, to 740,000 homes. The majority of buyers purchased single-family homes in the warmer, Southern states, the study found.
And resort destinations attracted 1 out of 5 vacation-home buyers.
In the ski areas of Aspen and Vail, Colo., for example, sales volume has leveled off but there has been no drop in prices, said Dennis Johnson, a real estate broker at Paffrath & Thomas in Breckenridge.
“We’re still going strong,” he said.
In Manhattan Beach, Steve Goddard, an agent at RE/Max Beach Cities Realty, noticed just a dip in vacation home sales and prices last year but is seeing a spring pickup in the market, which lures buyers from all over Los Angeles.
“Just recently, there were multiple offers on two properties and both ended up going for more than the listing price,” he said.
But nationally, the median price of a vacation home slid 2.5% to $195,000 last year while the median price of an investment property was flat at $150,000.
And because the market for investment and vacation homes tends to follow broader housing trends, falling home prices in many cities this year may scare off some prospective buyers.
“One of the tools people used for their down payment was using equity from their primary homes. But now with dwindling prices, they can’t do that as much,” said Greg Fujita, a real estate agent at Harbor Bay Realty in Alameda, east of San Francisco.
The only segment of vacation home buyers that has grown, Fujita said, are international buyers. They aren’t included in the Realtors association survey.
