Vacation Home Sales Rise In 2011 & Continue In 2012!

Each real estate market area is unique is how it performs and how it adjusts to this slow turn in the economy... they do NOT all operate the same. The PURTEE Team has been talking in our BLOG about the beaches of Tampa Bay and how the recovery has swiftly turned the pendulum into a HOT sales market!

According to the National Association of Realtors, "sales of investment and vacation homes jumped in 2011, with the combined market share rising to the highest level since 2005. NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010."

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010. NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Here on the beaches, we have see inventory dwindle and distressed properties easily absorbed... often before they even hit the market! Nationwide, all-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes. Here in Tampa Bay, the all-cash percentage currently exceeds 63%!

Some interesting statistics from NAR’s 2012 Investment and Vacation Home Buyers Survey, conducted in March 2012:

• Eight out of 10 second-home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation-home buyers.


• The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.


• Eighty-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

In our local area, as inventory for sales has dwindled so has inventory for rentals. Even snowbirds traveling to the Tampa Bay are are finding their property to secure for next year harder and harder to find. This is a primary reason some of these renters are turning into buyers in order to secure their own place that they can count on year after year.

At this very moment, The PURTEE Team has 6 bank owned distressed properties in various stages with the bank prior to their being listed for public sale! Want to be on the inside track? Email us today at info@floridagulfproperty.com

Bank Owned REO's In High Demand!

As foreclosures move through the process and the banks finally take possession, the bank listing is referred to as REO or "Real Estate Owned". The bank will try to sell the property on the open market after removing liens. However, these lenders are not in the business of owning homes and, in some cases, the house can be bought at a discount to its market value... making it very attractive to real estate investors.

The REO activity is really heating up along the beaches of Tampa Bay, Florida! There are only 13 active currently in all of the beach communities from Clearwater Beach in the north to St. Pete Beach in the south. The average price is $183,546.

25 are currently under contract pending closing with an average list price of $271,453 and average days on the market of 53 (ranging from 3 to 81). To date in 2012, 28 have sold at an average price of $246,211 and an average of 98.53% of asking price! The average days on the market for the sold properties is 57 days from list to close.

So... how is a buyer to get on track with finding these properties BEFORE the competition gets to it? Knowing the path they are coming from and having a savvy realtor on the lookout for you is the best route. Currently, The PURTEE Team has 5 such REO properties about to hit the market. They are in various stages of the process with the bank... some without prices yet. If you are on the inside track, you may have an opportunity to pick up one of these properties before the public ever finds out about it! Do NOT be left out of this important part of the current real estate market where some of the most outstanding opportunities exist today. Email us at info@floridagulfproperty.com to find out if one of these upcoming REO's might be right for you!

Housing Affordability At Record High

The National Association of Realtors (NAR) announced that "housing affordability conditions have reached the highest level since record keeping began in 1970."

The Housing Affordability Index rose to a record high 206.1 in January. This index is influenced primarily by the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. If an index of 100 is considered the "breakeven where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments."

NAR President, Moe Veissi, says this latest data underscores buyer opportunities in today’s market.“This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home!”

So, what we need to look at regarding buyers being able to get these homes is financing. The rates are at historic lows but the regulations are so tight that many potential homeowners are simply not able to get the financing they need to make the purchase. Here in Florida a purchase of a condo anywhere in the state requires a 25% deposit down. Underwriters are scrutinizing all aspects of the purchase.

Veissi says. “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices, with modest gains in areas with stronger job growth.” Currently here in Tampa Bay, cash sales are representing over 60% of transactions. Until financing returns to being a viable option, many of these opportunities will go to the cash buyers. To explore your options, The PURTEE Team is here to help. Specializing in Tampa Bay beach real estate, we understand the market, its trends and where the opportunities are. Whether considering a purchase or listing your property, contact us today!