Vacation home sales are up 44% year-over-year according to the National Association of REALTORS® based on sales during the July to September period. Not only are the number of units up, but they are also selling faster than in previous years.
On a national basis, 72% of existing vacation homes closed in October were on the market for less than one month.
The increased desirability and affordability of vacation homes, according to the National Association of Realtors, seems to be influenced by the pandemic and low mortgage rates. The ability to work from home seems to be contributing to this increase.
Freddie Mac reports the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.83% in October compared to the aver commitment rate for all of 2019 which was 3.94%.
There may also be a safety factor involved with these decisions to purchase vacation or second homes. Contagious diseases flourish more in highly populated areas like big cities and suburbs. The locations of the vacation or second homes are generally in areas with less residents.
The slower pace from the city may also add to the appeal of considering second homes. Proximity to the mountains or water, whether it be the ocean, rivers or lakes, have become a lure to people who realize that if where they work doesn’t matter, they can select a place where they want to be.
Historically, Americans on the east coast left the cities during the 1793 yellow fever epidemic. The same migration took place in the mid-19th century during three waves of Cholera and Scarlet fever.
Trends have yet to determine whether some of these new vacation home buyers may consider moving permanently or may reconsider the decision after the pandemic. Currently, it does have broad-based appeal and offers a lot of flexibility to owners who can afford it.
A home inspector is another key professional involved in a real estate transaction. Many times, the sales contract will have a provision that allows the purchaser to have inspections made to discover issues that are not readily apparent or have not been disclosed by the seller.
It is important to have a qualified individual perform the inspection. Regardless of whether a license is required, buyers should ask about the inspector’s experience, training, years in business and if they are familiar with the area and type of property involved.
Membership in professional associations can indicate an inspector’s commitment to education and training. References from both customers and agents are helpful and may be more meaningful. You are encouraged to call the references, especially, if you are concerned about any specific areas.
Errors and Omission insurance is intended to cover mistakes made during an inspection. It would be good to find out if the inspector has this type of insurance and how mistakes are handled or if omissions are made.
Find out exactly what is included in the inspection and what will trigger the inspector to recommend that you get an opinion by a specialist. They should be able to provide you with a sample report so you can see the detail with which the items will be explained. Ask if items that need attention will also be documented with pictures.
Some inspectors will allow you to accompany them during the inspection. They will be able to point out their concerns and answer any questions you may have about different things. An inspection can take two to three hours depending on the size of the property.
Generally, there is a time allotted in the sales contract for the inspections to be made and not completing them in a timely fashion could waive your right to use the contingency. Your real estate professional will be able to guide you through this process. Call us at 503-385-1518.