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Vacation home sales retreat, investment sales leap in 2015 Kona Real Estate Management Joseph A. Garcia, BIC Christina Sotelo, BA 808-329-3121 “A small but professional father-daughter run company, (father licensed since 1972 and daughter since 2004) both Hawaii real estate brokers, specializing in long-term rentals, as well as listings and sales and home check services. Call us today for more details on how we may be of service to you.” KEAUHOU VIEW 3bed/2bath large living area • MLS#292614 • $524,999 ISLANDER INN Ground fl oor unit remodeled • MLS#291841 • $115,000 KONA KAI Kona Kai Units for sale starting at $38,000 New construction or remodel we are your Kitchen & Bathroom specialists. 329-5836 Please come and visit our showroom 73-5620 Kauhola St. #3 Kailua-Kona, HI 96740 www.kitchencabinetshawaii.com kci@aloha.net YOU CAN COUNT ON US 16 West Hawaii Real Estate | April 13, 2016 Vacation home sales cooled off in 2015 but remained at the second highest amount in nearly a decade, while investment purchases increased for the first time in five years, according to an annual survey of residential homebuyers released today by the National Association of Realtors®. Mirroring the strong price growth seen throughout the U.S., the median sales price of both vacation and investment homes surged in 2015. NAR’s 2016 Investment and Vacation Home Buyers Survey,covering existing and new-home transactions in 2015, found that vacation-home sales last year declined to an estimated 920,000, down 18.5 percent from their most recent peak level of 1.13 million in 2014. Investment-home sales in 2015 jumped 7.0 percent to an estimated 1.09 million from 1.02 million in 2014. Owner-occupied purchases jumped 15.9 percent to 3.74 million last year from 3.23 million in 2014 — the highest level since 2007 (3.93 million). Sales estimates are based on a national online survey including responses from over 2,000 U.S. adults who purchased a residential property in 2015, and exclude institutional investment activity. Lawrunce Yun, NAR chief economist, says vacation sales took a sizeable step back in 2015, but still came in at the second highest amount since 2006 (1.07 million). “Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,” he said. “The expanding pool of buyers amidst a dwindling number of bargain-priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise. Furthermore, the turbulence that hit the financial markets the second half of the year likely seized some would-be buyers’ available cash.” The median sales price of both vacation and investment homes soared in 2015. The median vacation home price was $192,000, up 28.0 percent from $150,000 in 2014. The median investment-home sales price was $143,500, up 15.3 percent from $124,500 a year ago. According to Yun, many of the metro areas with the strongest price appreciation in 2015 were in the South — the most popular destination for vacation buyers - and particularly in several Florida markets. While increased buyer demand contributed to the run-up in prices, it also likely squeezed less affluent households looking to purchase vacation properties. Vacation-home sales accounted for 16 percent of all transactions in 2015 — down from 2014 (21 percent), but still the second highest share since the survey was first conducted in 2003. The portion of investment sales remained unchanged from a year ago at 19 percent, and owner-occupied purchases increased to 65 percent (60 percent in 2014). “Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years,” says Yun. “Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home.” This year’s survey found that in addition to longer-term rentals, investors are most likely to attempt to and rent their properties for less than 30 days. Among investors, 42 percent did or tried to rent their property in 2015 and plan to rent their property in 2016. Twenty-four percent of vacation buyers did or tried to rent their property in 2015 and plan to rent their property this year. Vacation buyers are more likely to use a property manager or social media to rent their property, while investors are more likely to use a traditional real estate agency. The share of vacation buyers who paid in cash jumped to 38 percent from 30 percent in 2014, while cash purchases by investors decreased to 39 percent from 41 percent a year ago. Of buyers who financed mortgage,vacation of the purchase The foreclosure)vacation less percent in 2014)(44 percent Characteristics purchases Vacation-had a higher income ($94,380)that was miles away Buyers a median 6 years


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