If you have been following this blog for the past few months you have most likely noticed a reoccurring theme that I feel that this is the time to buy resort real estate. As I have been showing buyers property over the last few weeks and talking to other buyers on the phone, they are asking me why I feel this is the time to buy. Another great question that somebody asked is, what do I tell people who purchased at the height of the market two or three years ago? These are both excellent questions and I would like to address them in this blog.
First, what do I say to people that purchased during the height of the market and have seen their property values decline over the past 2 years? As would be expected, I have several clients in this situation and I have talked with them at length about this. The first response is that while yes the property value has declined, they have had a wonderful vacation home to enjoy with their family and friends. It is impossible to put a value on the quality time that a family is able to spend together. Time spent reconnecting with children and a grandchildren who may have scattered around the country is priceless. Second, I frequently hear my clients say that had they not purchased their vacation home and instead invested that money in the stock market they would have lost more money than the value of their real estate has declined. While not overly pleased that the values have declined, everyone understands that it is a function of the global economy and are comfortable with their decision to have purchased. As long as the intent of the purchase was to actually use the property and not just flip it for a quick profit, my buyers are generally pleased with their decision.
So, why do I think now is the time to buy? After watching real estate values decline over the last 18 months I am beginning to see some sign of stabilization. However to best answer this question I need to ask two questions, first, “do you think real estate prices in a resort such as park city will increase in the next 3 to 5 years?” Second, “do you believe that interest rates, which are at historic lows, are going to go up in the near future?” If you answered yes to both of these questions, as I did, then combined with low real estate prices, strong inventory, and sellers willing to negotiate you can see why I feel that this is the right time to purchase.
It fascinates me to observe that in a “buyers market” as we are currently experiencing, buyers are reluctant to buy. However when the market is hot, as we saw in 2006, everyone wants to jump in and purchase property, even though the sellers have the advantage.
Are we at the bottom of the real estate market? Maybe… maybe not, I don’t know of anyone who can predict the bottom; however we are most likely close enough to the bottom that it makes sense to act on the desire to own a ski vacation home. This is exactly what I have been seeing for the past few months. The savvy investors who are looking for bargains have moved from the “wait and watch” to “buy”. This is now drawing the buyers who have wanted a ski home in to the market. With the stock market having regained most of its value, from the low point last March, and now seeming to fluctuate around the 10,000 mark there is widespread feeling that we may be coming out of this recession. The segment that still needs to come around is the employment market. With unemployment running around 10% it is hard for the American consumer to fully regain their confidence and to feel comfortable making a large purchase such as a vacation home. Not “if” but “when” lenders open up their credit and start lending on new construction we should see a decrease in unemployment and renewed confidence by the consumer. Whether this begins to turn around this year or next year, we will most likely see more buyers returning to our market which usually causes sellers to become less negotiable. So for these reasons I feel that there is an opportunity to purchase resort real estate at prices that we may not see again for some time, yes I feel prices will be going up in the next few years, yes I feel that interest rates will be going up and yes I feel that institutional lenders will start freeing up money.
However if you have been looking for a vacation home lets go back to the first point that I brought up and that is having a gathering spot for your family and friends to spend quality time together and to reconnect is the biggest benefit that you will receive.
First, what do I say to people that purchased during the height of the market and have seen their property values decline over the past 2 years? As would be expected, I have several clients in this situation and I have talked with them at length about this. The first response is that while yes the property value has declined, they have had a wonderful vacation home to enjoy with their family and friends. It is impossible to put a value on the quality time that a family is able to spend together. Time spent reconnecting with children and a grandchildren who may have scattered around the country is priceless. Second, I frequently hear my clients say that had they not purchased their vacation home and instead invested that money in the stock market they would have lost more money than the value of their real estate has declined. While not overly pleased that the values have declined, everyone understands that it is a function of the global economy and are comfortable with their decision to have purchased. As long as the intent of the purchase was to actually use the property and not just flip it for a quick profit, my buyers are generally pleased with their decision.
So, why do I think now is the time to buy? After watching real estate values decline over the last 18 months I am beginning to see some sign of stabilization. However to best answer this question I need to ask two questions, first, “do you think real estate prices in a resort such as park city will increase in the next 3 to 5 years?” Second, “do you believe that interest rates, which are at historic lows, are going to go up in the near future?” If you answered yes to both of these questions, as I did, then combined with low real estate prices, strong inventory, and sellers willing to negotiate you can see why I feel that this is the right time to purchase.
It fascinates me to observe that in a “buyers market” as we are currently experiencing, buyers are reluctant to buy. However when the market is hot, as we saw in 2006, everyone wants to jump in and purchase property, even though the sellers have the advantage.
Are we at the bottom of the real estate market? Maybe… maybe not, I don’t know of anyone who can predict the bottom; however we are most likely close enough to the bottom that it makes sense to act on the desire to own a ski vacation home. This is exactly what I have been seeing for the past few months. The savvy investors who are looking for bargains have moved from the “wait and watch” to “buy”. This is now drawing the buyers who have wanted a ski home in to the market. With the stock market having regained most of its value, from the low point last March, and now seeming to fluctuate around the 10,000 mark there is widespread feeling that we may be coming out of this recession. The segment that still needs to come around is the employment market. With unemployment running around 10% it is hard for the American consumer to fully regain their confidence and to feel comfortable making a large purchase such as a vacation home. Not “if” but “when” lenders open up their credit and start lending on new construction we should see a decrease in unemployment and renewed confidence by the consumer. Whether this begins to turn around this year or next year, we will most likely see more buyers returning to our market which usually causes sellers to become less negotiable. So for these reasons I feel that there is an opportunity to purchase resort real estate at prices that we may not see again for some time, yes I feel prices will be going up in the next few years, yes I feel that interest rates will be going up and yes I feel that institutional lenders will start freeing up money.
However if you have been looking for a vacation home lets go back to the first point that I brought up and that is having a gathering spot for your family and friends to spend quality time together and to reconnect is the biggest benefit that you will receive.
