Vacation home sales increase, while foreclosures, investor activity struggle
Posted on Friday, April 11, 2014 at 8:51:57 AM
Since the Great Recession, U.S. real estate investors have had their fair share of affordable properties available in order to make deals. This was the case thanks to a high number of foreclosed houses and low home prices, but those trends have reversed recently.
According to the National Association of Realtors, investor activity has declined, especially related to rental properties. In addition, the U.S. housing market as a whole received a boost thanks to an increase in vacation home sales, rising sharply in 2013. These sales ticked up 29.7 percent during that year, while investment-home sales dropped 8.5 percent in 2013 compared to 2012.
"Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property," stated Lawrence Yun, NAR chief economist. "However, vacation-home sales are still about one-third below the peak activity seen in 2006."
As an added bonus, national foreclosure levels have also trended lower, accompanying a decline in real estate investor activity. According to RealtyTrac, foreclosure filings in March were down 23 percent year-over-year, although 4 percent higher compared to February. The total foreclosure activity in the first quarter of 2014 also hit its lowest point since 2007.