Tips & Trends for the Flagstaff Real Estate Market:
Past Articles [March 2005]
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The Second Home and Investment Property Market
At the recent annual meeting of the Flagstaff Chamber of Commerce keynote speaker John Gisi, Chairman of the Board of Directors at National Bank of Arizona estimated that 20% or more of the homes purchased in Flagstaff last year were bought as second homes.
A new national study shows sales of second homes surged in 2004, and that investment property and vacation homes make up a significant portion of the overall housing market, accounting for more than one-third of residential transactions, according to the National Association of Realtors.
The new study, based on two surveys, shows that 23 percent of all homes purchased in 2004 were for investment, while another 13 percent were vacation homes. While I cannot put firm numbers on our local sales I am confident that we are somewhat near the national average. The number of second home and investment buyers has steadily increased during the past few years as real estate has become the choice investment for many.
Here are some highlights of the study. 86 percent of vacation-home buyers do not rent their property compared with only 21 percent of investment buyers. Nearly one out of five second homes will become primary residences after retirement.
Ninety-two percent of all second-home buyers see their property as a good investment. 38 percent said it was very likely they'd purchase another home within two years. Overall, 30 percent of buyers wanted to diversify investments, 28 percent sought rental income, 14 percent wanted a personal or family retreat, 6 percent planned to use for vacations, and 5 percent had extra money to spend.
Based on last years trends and market indications during January and February of this year I suspect that second home and investment buyers will continue to make significant purchases of Flagstaff Real Estate in 2005.
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