WASHINGTON (MNI) – The National Association of Realtors
Thursday, said sales of investment and vacation homes “surged”
in 2011 as investors with cash on hand gobbled up homes at bargain
prices.
“During the past year investors have been swooping into the market
to take advantage of bargain home prices,” NAR Chief Economist Lawrence
Yun said in a statement Thursday.
“Rising rental income easily beat cash sitting in banks as an added
inducement,” Yun added.
According to the NAR, investment-home sales rose 64.5% to 1.23
million in 2011, and vacation home-sales rose 7.0% to 502,000.
Owner-occupied purchases fell 15.5% to 2.78 million.
The NAR said many buyers of investment and vacation homes chose to
either use cash to purchase properties or opted for large down
payments.
“Clearly we’re looking at investors with financial resources who
see real estate as a good investment and who aren’t hesitant to use
cash,” Yun said.
Breaking it down, the NAR said 49% of investment purchases in 2011
were done with cash and 42% of buyers who purchased vacation properties
used cash. In addition the NAR said the median down payment for investment
and vacation properties for buyers who opted to finance their purchase
was 27%.
The NAR also said investors are helping to sop up REO and
distressed property inventories with half of all investment purchases
being distressed.
** Market News International Washington Bureau: 202-371-2121 **
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