Lower prices and less competition are the tip of the iceberg-sized list of factors that make it a good time to consider a vacation home purchase.
According to statistics from the Bagnell Dam Association of Realtors Multiple Listing System, in 2007 1,604 homes sold for a total sales volume of $387 million. In 2008 1,153 homes sold with a total volume of $262 million. 2007 Condos sales totaled 815 at $161 million, average sales price was $198,638. 2008 condo sales totaled 559 at $110 million, average sales price was $197,224. In 2007, 734 lakefront homes sold for a total of $268 million and average sales price of $366,302. 2008 lakefront homes totaled 504 at $178 million and $353,590 average sales price.
While the number of properties sold is down considerably, values are remaining reasonably steady. A host of market conditions have converged to make buying a second home a smart move right about now.
Stock market woes have always pushed people to look for alternate investments, and real estate is a consistent stronghold. Home sales are down right now but they have always rebounded. I wouldn't recommend buying a second home with the expectation of flipping it for a quick buck, but if you hang onto it for a while -- and better still, turn it into a vacation rental property -- you'll make a nice profit.
Interest rates are cooperating. As of the writing of this article, 30 year fixed rates are averaging 4.96%. The rate hasn't been lower since Freddie Mac started surveying these averages in 1971. Rates have been reasonably low for awhile, following earlier rate cuts last year toward the beginning of the year. That's good news for anyone who's in the market for a mortgage.
The pressure of bidding wars is off. Housing bubble or no housing bubble, you're not going to get bargain basement prices on a lakefront home or condo but because houses aren't flying off the shelf, there's less pressure on you to make a quick decision. You can afford to take your time, do your research, and refine your plan.
Vacation rental demand is on. Economic pressures on travel budgets are forcing those who once traveled abroad to stick closer to home. To further save travel dollars, domestic travelers want the most bang for their getaway bucks. Vacation homes provide all the comforts and options of home (eating in, game rooms, wireless access, etc.), often at a per-person rate that's cheaper than a hotel.
A vacation home can pay for itself. If your monthly mortgage payment is less than or equal to one peak week rental, twelve weeks of rental will cover your mortgage payments for the entire year. Other costs, including bills for your phone, power, cable, and association dues, may be paid out of your earnings from approximately five off-week rentals.
The calculations don't consider the added cost of a property manger you may need if you are not a do-it-yourselfer.
Despite the convergence of positive factors pointing to an opportunity to buy a second or vacations home, the fundamentals still apply. Strong credit, low debt, high savings and other assets are a plus.
If you have strong credit, you can find a lender who'll work with you. Also, don't rush into a decision. It's more important to take your time, make sure the property is right for you.
For more information or to ask lake real estatequestions, contact Michael at 877.365.cme1 (2631) or firstname.lastname@example.org View all lake area listings at www.cme1st.com You can also log your opinions on Michael’s real estate blog, www.AsTheLakeChurns.com