Now may be the time to purchase a second home or vacation property. With an abundance of properties and rock bottom interest rates housing affordability and availability have left buyers holding all the cards. Sellers may even be making concessions that they generally aren’t going to make in a rising market.
Even though there are incentives to buy it may be harder to qualify for second home loans. Homeowners will have a difficult time financing with the equity in their primary residence because of falling property values. So buyers will need to be prepared to bring more cash to the closing. Banks are requiring at least 10 percent down for a second home and 20 percent if it is an investment property. A strong credit score and a steady income will help secure a loan. Real estate is a very good investment at this time but buyers need to make sure that the property that is selected meets personal and long-term investment needs.
The second home market is “fundamentally healthy,” despite short-term ups and downs according to Walter Molony, spokesman for the National Association of Realtors. He also said,”the long-term underlying demand is favorable for vacation homes because of the large number of middle-age, middle income Americans who will fuel this market for the next 10 years.” Again Malony emphasises, “if you have the resources and are confident about your economic future, you’re not going to find a better market than we’ve got today in terms of affordability and raw buying power.”
According to a 2009 study by the National Association of Realtors, most of the people, 84 percent, buy a vacation home for personal enjoyment, 25 percent as a rental property and 26 percent for their investment portfolio. Whether you plan to use your vacation home later as your principal residence or not, it is important to buy with resale value in mind. Look for such things as a good location, great views and amenities.
“By buying smart, you should be well positioned to profit from your purchase down the road when the real estate recession subsides.”
For information on Naples’ current real estate market, please contact Dustin Beard at (239)289-2650.