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2014-04-03 07:07:58
National Trends

'I wonder if it will be—can be—any more beautiful than this,’ murmured Anne, looking around her with the loving, enraptured eyes of those to whom ‘home’ must always be the loveliest spot in the world, no matter what fairer lands may lie under alien stars.” L.M. Montgomery, Anne of the Island

What do different types of buyers look for in a home to buy? Does a primary home buyer think differently from someone who buys for investment purposes or someone who is interested in a vacation home? Studying home buying patterns in the year 2013, threw up some very interesting and revealing facts. Take the way the different types of home buyers purchased a house. Common to the purchase of primary homes, vacation properties or homes as an investment was the fact that the most popular way of buying was through a Real Estate broker or agent. This is largely due to the fact that it is well recognized by all the three categories of buyers that purchase of a house definitely needs professional expertise. Such transactions are believed to be far too important to be approached entirely based on one’s own assessment or that of a friend or colleague.

Accordingly the respective percentages of buyers who consulted Real Estate professionals across the categories of primary, vacation and investment homes are 69, 59 and 47. The second most preferred way of purchase is from a home owner that the buyers were acquainted with. The respective percentages for the same three categories are distinctly lower at 7, 12 and 17 in this case. The other ways of buying in descending order of popularity were through foreclosure or trustee sale, directly from home owner not known to the buyer and directly from a builder or their agent.

If one were to analyze the home financing process one would find that most home buyers did not find the process of obtaining finance any more difficult than what they were expecting. Some 42% of primary residence buyers, 39% of vacation property buyers and 38% of buyers for investment purposes felt that way. Only about 14, 19 and 21% respectively for the above three categories of home buyers, found obtaining finance more difficult than they had anticipated.

This does in a sense reaffirm the fact that the market sentiment pertaining to the housing sector saw marked improvement in 2013. However it is important to note that the growth came mainly from investors whose buying rose sharply from 2011 right up to 2013. Vacation home buyers on the other hand showed a steady decline in the period. This suggests a period of consolidation in the market with the conditions still not conducive to discretionary buying.

Home financing went in 2013 was similar for both vacation home buyers and investors with most of them opting to go for less than 70% financing. It is however quite interesting to find out as to what motivated most home buyers in 2013 with regards to vacation properties and investment properties. As one would expect some 80% of the people who bought a vacation property would use it for precisely that purpose while only 20% of investors would consider using the property for that purpose. Some of the vacation property owners were looking at using the property as a primary residence in the future, while a negligible number of investors were inclined that way. Not surprisingly the investors were far more inclined (more than double the number of vacation home buyers) to rent out the property.

Perhaps the most significant aspect of the stats that emerge from this 2013 analysis of home buying trends pertains to what they signify for the future. There’s been so much talk about sustained recovery that one often tends to overlook ground reality. Fortunately the trends that emerge do appear to be favorable going forward. Some 47% of investment buyers and 37% of vacation home buyers are favorably inclined towards buying an investment property in the next two years. The figures for vacation property purchase in the next two years too look good with 31% of investment buyers and 29% of vacation home buyers inclined to go for it. The most heartening finding is that as many as 78% of both  investment buyers and vacation home buyers think that it’s a good time to buy property.

 

Nick Coleman, Park City Realtor

By Nick Coleman
Call 435-640-7781 or email [email protected] 
to find your Dream Park City Home.

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