Vacation-Home Sales Increased in 2009

Vacation-home sales recovered in 2009 while investment sales fell sharply, according to the National Association of REALTORS®.

NAR’s 2010 "Investment and Vacation Home Buyers Survey," covering existing- and new-home transactions in 2009, shows vacation-home sales rose 7.9 percent to 553,000 last year from 513,000 in 2008, while investment-home sales fell 15.9 percent to 940,000 in 2009 from 1.12 million in 2008. Primary residence sales rose 7.1 percent to 4.04 million in 2009 from 3.77 million in 2008.

NAR Chief Economist Lawrence Yun said, “The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat. Investment buyers primarily seek rental income, with six in 10 planning to rent to others, although one in five wants a family member, friend, or relative to use the home.”

Half of vacation homes purchased last year were in the South, 21 percent in the West, 17 percent in the Midwest and 12 percent in the Northeast. Seven out of 10 were detached single-family homes.

The distribution of investment sales was fairly close to the distribution of population: 35 percent in the South, 25 percent in the West, 24 percent in the Midwest and 16 percent in the Northeast. There was a higher share of condos in investment sales: 27 percent of investment homes were condos vs. 21 percent of vacation homes.

Here is a breakdown of statistics from the survey:

Vacation-Home Buyers

· Only one in four vacation-home buyers plan to rent their properties to others.

· 26 percent of vacation-home buyers intend to use the property as a primary residence in the future.

· The vacation-home market share rose a percentage point to 10 percent.

· The median transaction price of a vacation home was $169,000 in 2009, compared with $150,000 in 2008.

· Three out of 10 vacation-home buyers in 2009 paid cash for their properties

· The typical vacation-home buyer in 2009 was 46 years old, had a median household income of $87,500, and purchased a property that was a median distance of 348 miles from their primary residence.

Investment-Home Buyers

· One in five investment buyers plan to use their homes for vacations or as a family retreat.

· 8 percent of investment buyers intend to use the property as a primary residence in the future.

· The market share of homes purchased for investment was 17 percent in 2009, down from 21 percent in 2008.

· The total share of second homes declined from 30 percent of sales in 2008 to 27 percent in 2009.

· The median investment property sold for $105,000 last year, down 2.8 percent from $108,000 in 2008.

· Half of investment buyers paid cash.

· Investment-home buyers last year had a median age of 45, earned $87,200, and bought a home that was relatively close to their primary residence – a median distance of 24 miles.

· Roughly one in four investment buyers purchased more than one property in 2009.

Source: NAR

IRS Clarifies What's Needed to Claim Tax Credit

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.

While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.

The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Source: Washington Post (02/20/2010)

Top 5 Most Affordable US Markets

How affordable or unaffordable is it to buy a home? Well, it depends heavily on the part of the country where the buyer chooses to live.

Earning the U.S. median income of $64,000 a year is enough to allow buyers to purchase 70.8 percent of all homes sold in the country during the last three months of 2009, according to a joint report from the National Association of Home Builders and Wells Fargo.

But some parts of the country are a lot more affordable than others. Here are five major housing markets that housing analysts judge to be the most affordable major markets in the country.

· Indianapolis
· Detroit
· Dayton, Ohio
· Youngstown, Ohio
· Akron, Ohio

Source: CNNMoney.com, Les Christie (02/17/2010)

4 Reasons to Sell Now

Selling a property in this tough market can seem like a challenge. Here are four factors that actually make this a good time to post a For-Sale sign.


Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape.

Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.

Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash.

Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business.

Source: McClatchy Tribune, Kate Forgach (02/07/2010)

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Feeling Squeezed by Your Homeowner Insurance?

Know Your Options. Homeowners insurance comes in several different forms, depending on the type of residence you occupy. Here are the six standard policies to choose from.

HO-1 is very basic coverage, insuring against fire or lightning damage.

HO-2 is called “broad coverage” and includes everything in HO-1 as well
as building collapse, falling objects, weight of snow, ice or sleet, rupture
or bursting of steam or hot water heating systems and freezing of or
accidental discharge of water or steam from within plumbing, heating
or air-conditioning.

HO-3 is referred to as the “special” coverage and is the policy most
homeowners purchase; this policy insures your home and detached
structures against loss or damage from any peril except for those
specifically excluded in the policy.

HO-4 is a tenant’s policy that insures your household contents and
personal belongings against the perils covered in the HO-2 policy, as well
as additional living expenses, medical payments and liability protection.

HO-6 covers a condominium unit-owner who wishes to insure items
not covered by the association policy, as well as the personal property
inside the unit and personal liability protection.

HO-8 is the “older home” policy. Having an older home may preclude
you from being able to buy a standard policy; you may have to buy a
modified policy instead. This means that the policy will pay for today’s
standard building materials and processes to replace older period
materials that are often found in older homes.

Don’t be afraid to ask questions to ensure that you get the right
policy at the best price.

Madoff's Beach House Sold

Bernard Madoff's Montauk, N.Y., beach house sold last week for $9.41 million. The property, which has gorgeous view of the Atlantic, was listed at $8.75 million by the Corcoran Group.

Proceeds will go toward reimbursing victims of Madoff’s Ponzi scheme, which cost investors as much as $65 billion.

The remaining Madoff properties in New York and Palm Beach, Fla., have been listed for $9.9 million and $8.49 million respectively, a government statement said.

Source: Reuters, Grant McCool (10/16/2009)