Is Now The Time To Buy???

As a long time REALTOR® in a destination resort, wherever I go around town residents and visitors always want to know what’s going on with the local real estate market. Residents are always interested to know if their property values are going up or down while visitors wonder if this is the right time to purchase. For this discussion let’s concentrate on the 2nd Home/Vacation Home buyer.

In a recent NAR survey of 2nd home buyers they reported that the number of 2nd homes/vacation homes purchased in the United States was down 30% for 2008. While this seems shocking at first it is not surprising. 2008, particularly the latter half, was a very stressful time for most Americans and a 2nd home/vacation home purchase was not a necessity. These purchases were put on the back burner. While not having seen any hard numbers for the first quarter of 2009, my observations are that the first quarter of 2009 numbers will be very similar to the numbers for the last quarter of 2008. During the first quarter of 2009 buyers were inquiring about vacation properties but were understandably nervous and not ready to pull the trigger. We have just begun the 2nd quarter and it appears that buyers are now feeling a little bit more confident and are once again purchasing. My guess is that a combination of the following factors has come in to play: Along with a drop in the number of home sales came a drop in home prices, interest rates are at an all time low and the stock market seems to be calming down.

While the stock market has certainly not settled on a particular direction the wild roller coaster fluctuations of last fall seem to have evened out. Lower prices combined with low interest rates seem to be attracting buyers who are fearful of loosing out on a terrific opportunity to invest in a resort vacation home. Many buyers remember 2003, which was the low point for the market after the 911 terrorist attacks and the Gulf Wars. Many buyers sat on the sidelines in 2003 not sure if it was the right time to purchase and then watched the markets escalate through 2006. Is this a repeat of 2003-2006? While no one can say for certain, I do feel confident in saying that this window of opportunity will end and there will be buyers looking from the wrong side of the window.

The past few weeks here in Park City I have seen a pronounced increase in interest and contracts written. What is very telling is that well priced properties are receiving multiple offers. This is telling in that buyers are out there and ready to purchase but only for homes they perceive to be an exceptional deal. This is not the time for sellers to test the market. If sellers are serious about selling, their property must be perceived as a “deal” not just competitively priced.

So, is this the right time to buy a resort vacation home? That is certainly an individual decision but the stars may be lining up to make now an opportunity that we may be wistfully looking back to.