Hi Everyone!

As you may have seen, last Friday the National Association of Realtors came out with their annual Investment and Vacation Home Buyers Survey.

So which way do we want to look at it? Is the glass half empty or half full? Being the eternal optimist, I am going to look at this from the glass half full perspective.

Half Empty?
So the big stat that everyone is lamenting over is that vacation home sales dropped 30.6 percent between 2006 and 2007.

Half Full!
Taken at face value, a 30.6% decrease in new and existing vacation home sales might be a statistic that sends prospective buyers running for the hills. But if you really read between the lines, you'll find that the news isn't as bad as it looks. Vacation home sales in 2006 were at an all time high, and as we've seen with our economy lately, what goes up must come down. That is exactly what is happening in the vacation home realm. After a record year, 2007 saw the market start to normalize, and as a result, fewer homes were sold. Sales aren't plummeting as the statistic might seem to indicate. In actuality, it indicates a stabilization, that I attribute to the exiting of speculators in the market.  From 2004 to 2006 speculators made up around 20% of the buyers in vacation home purchases.  In 2007, speculators only made up a mere 3%.  This will likely prove beneficial for vacation home owners in the long run because whenever the market is owned mainly by single investors, the market prices tend to be more stable over time.

Half Empty?
Median sales price is down 2.5% from 2006 to 2007, and many have been pointing to this price drop as a sign to worry.

Half Full!
Despite what you might be hearing on the nightly news, it isn't all doom and gloom in every segment of the real estate market. While general home sales are struggling, the second home market is steady. So steady that 77% of people are feeling like now is a good time to buy! If the 77% surveyed are any indication, there are still a significant number of prospective second home buyers out there. But while a drop in median sales price is never great news, 2.5% isn't that significant. With the significant price increases we saw during the 2nd home boom years (2004-2005), I am really surprised this number is not much higher. Basically, these homes are holding their value as the market normalizes.

Considering the state of the real estate market in the US, I really feel like this is good news! Although there was a drop in the number of sales, it's not really as bad as it seems. Admittedly, this might not be the best time to sell your vacation rental home, so thank goodness we all have the ability to rent out our vacation properties while the market corrects itself. Not such a bad position to be in now, is it?

Happy Renting by Owner!

Christine