Posted on November 5, 2007 - by Editor

Recent Trends In The Vacation-Home Market

McCall, Idaho

Recently released statistics by the National Association of Realtors show that sales of second-home vacation properties continue to set record levels, with 1.07 million closed transactions in 2006 . This is the fourth consecutive year of an upward trend in this market segment, with 850,000 in 2003 and 1.02 million in both 2004 and 2005. This trend continues despite the decline in both investment properties and primary residence sales in 2006. “Vacation-home buyers are making lifestyle choices and purchasing for their own enjoyment; investment-home buyers are seeking rental income and portfolio diversification” said David Lereah, Chief Economist for NAR.

New lending programs are being introduced to further satisfy the demand created by the second-home market. Lot loans are now available to multi-million dollar levels, with limited documentation and no-verification programs, and programs for investment properties and refinances. Construction loans are also being tailored to this market, the most popular being one-close loans based on appraised value, and including closing costs and interest reserves.

The newer property types are becoming increasingly popular in resort settings. Lending sources are now available for fractional ownership properties, bringing traditional loan programs to what has previously been a cash-buyers market.

Taken from Mountain Mortgage’s Fall 2007 Newsletter