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38 | NAR USA OUTLOOK WORDS | Cindy Fauth


BUSINESS


www.opp.org.uk |MAY 2012


nternational buyers have long realised the benefi ts of purchasing second home properties in the United States, and now U.S. buyers are taking note. A recent study by the National


Selling the US dream I


percent to 502,000 in 2011 from 469,000 in 2010. And owner-occupied purchases fell 15.5 percent to 2.78 million. (Note: the report does not distinguish between


Association of Realtors (NAR) shows that sales of investment and vacation homes in the United States jumped drastically 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 an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0


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.


“Eight out of ten second-home buyers said now is 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”


foreign and domestic sales.) 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


Rising rental income easily beats cash sitting in the bank as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.” Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to


Half of all investment home


purchases in 2011 were distressed homes, as were 39 percent of vacation homes. “Clearly we’re looking at investors


with fi nancial resources who see real estate as a good investment and who aren’t hesitant to use cash,” says Yun.


Second-home investors from U.S. and abroad are really helping the U.S. market recovery says OPP’s Chicago- based NAR correspondent Cindy Fauth. Cindy has been looking at the country’s “investment homes” market and trying to fi nd out why sales volumes in this sector have surged upwards by a staggering 65% year-on-year.


absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period,” he said. All-cash purchases have become


fairly common in the investment and vacation home markets during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers.


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