Colorado resort real estate in beautiful places like Breckenridge, Keystone, and Summit County features a high percentage of vacation homes and investment properties. The majority of residents of Breckenridge CO real estate are second home owners who come and go with the seasons.
The market for our Summit County real estate in these communities, as well as in Silverthorne, Dillon, Frisco, Copper Mountain, and Montezuma, and recreational real estate in Park County has slowed down over the last two years. According to the National Association of Realtors® (NAR), this local trend is in line with research about national statistics for the sales of vacation and investment homes in 2008.
In the U.S., 30 percent of all existing- and new-home transactions in 2008 involved vacation and investment properties. Twenty-one percent of sales in 2008 were investments and 9 percent were vacation homes.
However, that is a significant drop from the previous year. In 2007, 740,000 vacation homes sold. By 2008, the number of vacation homes sold dropped 30.8 percent to 512,000. These sales had peaked in 2005 when second homes comprised 40 percent of sales. In a recent news release, NAR chief economist Lawrence Yun addressed the issue. “We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases.”
Investment home sales dropped 17.2 percent, from 1.35M in 2007 to 1.12M in 2008. Yun explained that investment-home sales are more stable as buyers are taking advantage of deeply discounted prices in some areas.
Interestingly, with people shifting their portfolios around trying to adjust to the throes of the national economy, a substantial number of sales are cash transactions. Thirty percent of vacation-home buyers paid cash and 40 percent of investment-home buyers paid cash.
Yun explained that in the long term, with almost 40M potential buyers in the 50-to-59 age bracket on track to buy second homes and 45M more in their forties, middle-aged buyers will most likely lead the second home market into many successful years ahead.
Nationwide in 2008, 70 percent of vacation homes were single-family homes, 18 percent condos, 5 percent townhouses. Similarly, 64 percent of the investment homes purchased were single-family homes, 22 percent condos, and 8 percent townhouses.
Jonna Beardsley of Breckenridge Associates offers a wealth of information about real estate in the Rocky Mountains. Call Jonna at (970) 453-2200 for friendly, professional assistance.
