Second home sales have taken a direct hit in the current real estate market slowdown, according the National Association of Realtors’ (NAR) annual survey of investment and vacation home buyers.Hmm, Marin has a few vacation homes. But of course, as we all know, what happens in the rest of the country, or even the state, doesn't apply to us.
The realtors group, always eager to put a sunny spin on the real estate market, was frank in its assessment of sales of second homes, which include both vacation homes and investment properties. “Second homes are discretionary purchases and there is a natural tendency to pull back from big-ticket items in periods of uncertainty,” said Lawrence Yun, NAR’s chief economist.
In 2007, some 740,000 vacation homes were sold, down 31 percent from the 1.07 million sold in 2006...
Monday, March 31, 2008
Vacation House Sales Plummet
This was sent in from a reader on the other side of the GG bridge, in some place called San Francisco:
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I read somewhere that second home purchases now require 40% down payment. Banks have gotten incredibly strict with folks wanting a second home. And think of all the vacation markets that are dependent on CA money....put a fork in it. My parents live in Sedona and they say basically nothing is selling and there's a lot of inventory.
What's the word on the street these days in Marin? How's that Spring market shaping up? One thing I'm not hearing a lot about is the increase in the GSE limits....like suddenly that's not the savior people were hoping for.
Man.. I feel your pain. I live in San Mateo, another county where the rules supposedly doesn't apply. I started my own blog recently, feel free to visit!
http://sanmateore.dreamhosters.com/
Well, the word out here in the East Bay ( Alameda) is that things are pretty slow. That said, I've personally seen at least a few homes sell. One was a rather massive, very fancy looking house that I assume was easily over a million bucks, which in this town is pushing the upper end of the market. That and a few homes that have been for sale literally for well over a year sold. I'm not sure for how much.
It seemed like this time last year the same thing happened: A few "spring chicken" homes sold and then there was a massive falling off the ledge in sales. I'm not sure if that will happen again, but hopefully. The sense of denial is still pretty high here. Most assume that since this is a white bread, family-friendly neighborhood that we'll be spared the carnage going on in Oakland- a short skip and a jump across the bridge from here.
What I would really like to know is some concrete information showing how much banks and lenders now require a buyer to put down, what their credit scores must be like, and how many first time buyers are buying. My best guess is that those who are buying right now have either sold a home prior to the one they're buying, or actually did their homework and saved up the whopping 200-250k down payment I assume buying in our area would require.
If that's the case, then it would explain the slow sales and also clearly indicate just how many people bought a few years ago who otherwise wouldn't be able to now. That would be the smoking gun to show where prices might be heading.
My big fear is that I know that banks, lenders, investment firms, and so on are trying their very best to work out clever engineered plans to somehow get the whole easy credit/huge jumno loan machine up and running again. Again-m the level of denial in the Bay Area is high. The only reason sales are down is because those who want to buy simply don't qualify. But that doesn't mean they wouldn't do so if toxic loans were suddenly available.
As long as lenders and banks feel the sting of the credit crisis, we should be good to go. But if they somehow return to anything resembling the system a few years ago, then prices will at the very least stabilize, which is totall unacceptable.
"banks, lenders, investment firms, and so on are trying their very best to work out clever engineered plans to somehow get the whole easy credit/huge jumno loan machine up and running again"
Right--sweep together new loan products from what's left on the banker's floor. And good luck on rating those vehicles this time around--and finding the greater fool investor. I have no doubt they'll try until the systemic problems can no longer be "contained" and the financial system implodes.
I so wish the bankers would feel that "sting," but I suspect the average American will experience this most acutely when this fiasco unravels. It's all a big money grab, where so many wanted an "in"—banker, realtor, homebuyer, investor, etc. Hence the denial—and yet another lesson from history repeats itself.
Can someone please give Stinson Beach the message that prices are down and people aren't buying vacation homes anymore? $2,500 per square foot - it's some of the most expensive property in the US! The bubble is alive and apparently well in Stinson.
Oh, and do these prices reflect the rising sea level?
"Oh, and do these prices reflect the rising sea level?"
...or the fact that Stinson/Bolinas are essentially atop San Andreas fault? I doubt that's in any realtor flyer either.
People, look. We are immune. Remember? Rising sea levels and earthquakes do not affect us. Everywhere else in the world, sure, but not here.
Besides, such events are perceived as being too far into the future for our short-sighted culture to plan for.
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