Vacation homes lead the market
Taking a vacation is a relatively new concept developed during the past 200 years, prior to that people never really took time out from their everyday lives to just relax and get away from it all. Partly because of the invention of mass transportation and time saving technology humans started traveling far from home, but now the pendulum is starting to swing back.
Like all real estate, the vacation home market took a big hit when the bubble burst, but recently the vacation home market is starting to show a new vitality. According to the National Association of Realtors, sales of vacation properties fell 56 percent between 2006 and 2010. However, during 2011 sales climbed 7 percent, but prices still remain soft, dropping more than 19 percent in 2011 to a median of $121,300 nationally.
Certainly some if not all of the reason for increased sales is the record low mortgage rates (3.9 percent for the week ending May 1st) combined with bargain prices and the very real fact that there is a dwindling inventory of homes available. This reality is creating a sense of urgency among vacation home buyers, especially when they consider that once unavailable homes could be within reach.
The one difference in this emerging market is where buyers of vacation homes are considering a purchase. In previous financial markets, people purchased vacation homes out of state near resort areas or followed the sun to warmer climates. But today's buyers are sticking closer to home. Many of them, especially buyers that for the first time may find themselves in a position to actually have the ability to purchase a second home, are opting to purchase a property in the more conventional and less showy vacation home communities near where they live.
The National Association of Realtors found that the median distance between a buyer's primary residence and his/her vacation home declined 19 percent to 305 miles in 2011 from the previous year. With the increased cost of gasoline and airline tickets, buyers are reconsidering the need and inconvenience of maintaining a property that is far from their primary residence. In addition, today's buyers are older, a direct result of the aging baby boomers, and many are seeking a vacation home that can be used as a retirement home down the road.
A March survey by HomeAway, Inc. found that most vacation home buyers want to be within a four-hour drive of their primary residence. This also gives these homeowners the ability to better monitor their properties, especially if one of their plans is to rent part of the year.
Anna Maria Island is already seeing the volume of sales steadily increasing as highlighted by the real estate transfers printed in this paper. Certainly not all of these sales are strictly vacation homes, but many are, and a good percentage of the buyers are from within Florida and surrounding states.
Several years ago I did a very unscientific analysis of where people moving on to the Island were from. Out of 48 sales during the month of March that year, 15 were buyers moving within the state of Florida, some, of course, where local, but many were from places like Tampa, Lakeland and St. Petersburg.
The one bright light of the housing recovery looks like it's in the vacation and second home market. That's great news for Anna Maria Island and for vacation home buyers. How lucky are they to live within a four-hour drive of some of the most spectacular beaches in the world.