Vacation Home Market

Are you in the market to buy a vacation home? If so, you're not alone. There is a ripe and ready segment of today's market that is geared up for taking advantage of today's favorable buying conditions. 
 
According to the latest National Association of Realtors Investment and Vacation Home Buyers Survey, vacation-home sales rose 7.0 percent in 2011. Investment property purchases were up a staggering 64.5 percent. Many of these were distressed properties being sold at steep discounts.
In comparison to the total sales, vacation-homes were 11 percent of all transactions for 2011, up a healthy 10 percent in 2010. 
 
NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. "During the past year investors have been swooping into the market to take advantage of bargain home prices," he said. "Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property." 
 
These investment buyers are pulling out the cash as they look into buying these rental properties. Forty-nine percent of investment buyers paid cash in 2011. Forty-two percent of vacation-home buyers did the same.
"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. "Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent." 
 
What types of buyers are scooping up today's vacation homes? The NAR survey said lifestyle factors are the leading motivator. These homes are more likely found in suburban and rural areas.
The median vacation-home price was down 19.1 percent from 2010 to $121,300. The NAR reports, "The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years." 
 
Additionally, 16 percent of vacation buyers bought the property for a family member (such as a child going attending school), friend, or relative to use. 
 
Regionally, 42 percent of vacation home were purchased in the South, 30 percent in the West, 15 percent in the Northeast, and 12 percent in the Midwest. 

Realty Times Feature Article by Carla Hill 

Things You Should Know Before Buying a Luxury Home

Luxury New Market Realities

1. It's a great time to buy - really! Compared to real estate overall, the high end has seen a resurgence in sales but there is still no shortage of excellent buying opportunities. Equally desirable are interest rates, which even for jumbo loans are exceptionally low.
2. Trading up? Sell low, buy even lower. Even if you have to sell your current home for less than you want, chances are you still come out ahead. "Once you find out what a good deal you might get on your purchase, that big discount on your existing house will be much easier to stomach, " says Paul Boomsma, president of Luxury Portfolio International. Factor in ultra-low interest rates and the prospect of selling low becomes even more palatable.
3. Don't be surprised to discover you are not the only buyer in the marketplace. The opportunity to own a fabulous home for a fraction of the cost of only a few years ago continues to entice consumers worldwide; interest from international buyers in U.S. real estate has never been higher.
4. Multiple offers still happen. Even though there are a large number of homes for sale, really good inventory gets noticed. "When a property is done and priced at the market, it will definitely attract multiple offers and that's very surprising to buyers," says Betty Graham, president of the Coldwell Banker Previews International division for NRT.
5. Not all sellers are desperate. "Distressed sales are part of the market but they are not the whole market," observes Mark Nash, a Coldwell Banker Residential Brokerage agent in Chicago and author of "1,001 Tips for Buying and Selling a Home."
6. Taking a hard line in negotiations isn't always the best strategy; sometimes patience brings a better pay-off. It is important to "give buyers enough time so they will thoughtfully consider your offer," says Graham.
7. Cash is king. One of the biggest changes in the last five years is that more luxury buyers are opting for a cash deal. The motivation is not a lack of available loans; rather, luxury buyers understand they often can negotiate a better deal using cash, observes Joyce Rey, executive director of Coldwell Banker Previews International. "If there are fewer contingencies, then sellers are more likely to accept a lower price."
8. Don't worry if it's a buyer market or a sellers marketing; instead focus on getting a handle on what's happening today in your target location and price range.

Source: Unique Homes by Camilla McLaughlin

Pros and Cons of Owning a Home in a Historic District

Buying a home within a local, state or national historic district most likely means you’re buying into a fascinating neighborhood with important history behind it. But along with the great past of your new home, there are all sorts of opportunities as well as important considerations to keep in mind.

Understand the Limits

Check with your real estate agent or local city government to understand what you can or can’t do to your home. Some cities have specific permits or building codes for historic districts that cover such areas: potential add-ons, types of windows allowed or various other exterior improvements on a historic home.

Take Advantage of the Savings

Many districts have tax incentives available for those that rehabilitate their home using approved standards. Some of these incentives have fairly distinct time requirements so check out all the rules in advance to maximize the possibilities.

Research Your Home

Most local libraries have a wealth of information on historic homes. Finding original photos of your home not only will impress your guests, but can also help you assess potential improvements to match up your home to its original look and feel.

You’ll Be Surprised

Whether you like to do it yourself or have others help you, odds are you’ll find something unexpected when you take on a home improvement project. Often, new homeowners of historic homes find things ranging from beautiful wainscoting behind wallboards or original woodwork sandwiched in between studs, behind a wall. The general rule is if you find it — make use of it!

Take a look at some of the Historic Homes Prudential Montana Real Estate has listed: http://www.finehomesmt.com/property/fineHomes/Montana/historic-homes/

September 26, 2011

Author:Mitch Robinson
http://www.zillow.com/blog/2011-09-26/pros-and-cons-of-owning-a-home-in-a-historic-district/

The Power of the Bobcat Spirit

The Montana State University Bobcats are well-known throughout the beautiful state of Montana as well as the entire western region. The football rivalry between the MSU Bobcats and the University of Missoula’s Grizzlies is one of fame and fanatical proportions, especially to those who hold Bozeman or Missoula close to heart. For Bozeman and the surrounding Gallatin Valley area, the roar of autumn games and the community spirit that is experienced at the football stadium brings families, friends and colleagues together in camaraderie at its finest.

For years, the Bobcat Stadium has been bursting at its seams in an attempt to house all the cheers and energy the Bozeman fans exude. In May of 2008, in reaction to the obvious need for expansion, MSU’s Athletic Department revealed plans to enlarge the stadium over the next twenty years, a master plan totaling around $100 million. The “design team is comprised of a lot of MSU graduates,” stated Jim Bos, owner of the project’s creative company A & E Architects and a Montana State University alumnus. That the stadium expansion was designed by MSU alumni gives the whole football project a sense of passion. Everyone involved truly cares about the project and its success.

Now in 2011, the project has been underway for around three years, with the End Zone Expansion on track. The construction team broke ground in January of this year, with over one hundred people and fans attending the End Zone Ceremony. MSU President Waded Cruzado spoke, while other honorary players and fans stood close by, including legendary player Sonny Holland. The End Zone Expansion is clearly a community-induced effort to expand both the stadium and the hearts of the fans within the community. Those present took up the gold-painted shovels, complete with blue and white bows, and dug into a new beginning for Montana State University’s Bobcat Football.

With the expansion of the end zone, due to be completed by the first home game on September 10, 2011, around 5,000 additional seats will be available, as well as an entirely new scoreboard. The effort is representative of not only more seats for fans, but the way this Bozeman community can come together in order to reach a shared vision. The End Zone Expansion project itself is set to cost around $10 million, all of which was donated and raised by those in the community that care about its completion. In no other way can it be described but that Bozeman is passionate about its community spirit and has pride for its hometown Bobcats.

To learn more about the stadium expansion and purchase season tickets, visit: http://www.msubobcatstadium.com


Posted by:
Carla Dingman

Broker, CRS, GRI, ABR

2001 Stadium Drive, Ste. A

Bozeman, MT 59715

Phone:(406) 556-2258

Cell:(406) 570-9199

carla.dingman@prumt.com

What Makes Bozeman Special

Community, outreach, involvement, giving back; these are words that strike a chord with those of Bozeman, Montana and fully exemplify the spirit of this vibrant community. This is not only apparent with the countless non-profit and volunteer organizations as well as resident involvement around town; it is printed in almost every newspaper Bozeman has to offer.
One recent newspaper headline included “There’s One Team. We’re All On It.” The 2011 Special Olympics Montana State Summer Games were held this past May in Bozeman, enveloping the area with even more heart and togetherness as volunteers (including Prudential Montana Real Estate) and sponsors engaged themselves in the program to Live a Little Louder. This consistent and inspiring theme for the Games applied to those amazing athletes participating from all over the state, as well as those there for support.

With over 1,000 athletes and 2,600 volunteers absorbing themselves in the Games, there were around four thousand people soaking up every ounce of humanity, celebration and hope the Special Olympics inevitably emanates. By closely and personally participating in the volunteer work supporting the Games, I know how magical and contagious the smiles on those athletes’ faces are and how that happiness is able to spread throughout Bozeman. Prudential Montana Real Estate’s ability to be involved is both a pleasure and a chance to cohesively work side-by-side in promoting that community bond that Bozeman embraces. As John Parkes, the Special Olympics’ Honorary Games Chairman stated, “Special Olympics is the inspiration to believe in a more hopeful world – not just during this week but every day of the year. Because of Special Olympics, [Bozeman is] living a lot louder.”

Posted by:

Heidi Parkes

Broker/CRS

Prudential Montana Real Estate

2001 Stadium Drive, Ste. A

Bozeman, MT 59715

heidi.parkes@prumt.com

cell: 406-539-0222

CASH SALES ON THE INCREASE

Both nationally and locally real estate brokers have noticed an increase in the number of cash transactions.

For example, between January 1, 2010 and late March 2011 of 166 transactions in Big Sky, 72 or 43 percent have closed with cash. According to a recent article in the San Francisco Examiner in January 2011, 28.7 percent of the sales closed with cash. Also in January, 2011, 46 percent of real estate transactions in Toledo, Ohio were cash sales. The MLS of Central Oregon that tracks sales in the Bend, Oregon area noted that 32 percent of the sales in February were cash transactions.

The National Association of Realtors noted that 54.2 percent of the sales in Miami, 45.9 percent in Las Vegas, 44.9 percent in Tampa and 35.6 percent of the sales in Phoenix were cash transactions. These four cities were all hit pretty hard by the recent recession and prices were dramatically reduced due to numerous foreclosures and short sales.

While there are a number of reasons for this increase in cash sales, such as foreign investment, cashing out equity in other properties or investments or using cash and a quick close as a negotiation strategy, there is also another potential reason: the return of the investment buyer.

Investment buyers look for opportunity; the combination of motivated sellers, short sales and foreclosures combined with a lot of inventory creates an almost ideal situation for those investment minded buyers. This also could be a signal that many buyers believe that we are close or at the bottom of the market. Already in Big Sky we are seeing significant market absorption in certain areas and price ranges.

Posted by

Don Pilotte, Broker, GRI, RRS

Big Sky Office
55 Lone Peak Drive
Suite 3
Big Sky MT 59716
don.pilotte@prumt.com
cell: 406-580-0155

SECOND HOME DEMAND INCREASES

According to a recent article in the Wall Street Journal the market for vacation homes appears to be increasing. This is also supported by the 2010 National Association of Realtors Investment and Vacation Home Buyers Survey where one in ten home buyers purchased a vacation home in the previous year. Sales in Big Sky and the Bozeman area also support an increased interest in investment and second homes.

Interestingly in most markets where demand has improved, prices have not increased. A broker in Hilton Head, S.C., noted that many buyers are purchasing the low end of the market and in New York’s Hamptons area another broker noted that sellers have become aware that homes have to be well priced to sell. The Hampton market has increased because the prices are now mostly where they should be, according to the broker. Data from the Southwest Montana MLS supports those trends in this part of the state.

The sales data below represents sales in the Big Sky area. The data from 2011 represents closed transactions between January 1, 2011 and March 27, 2011. In addition to the closed volume noted below for 2011, there is currently another $12,263,900 in pending transactions combining to total almost $30 million in sales during the first three months of 2011.

YEAR MEDIAN SALES PRICE & DOM VOLUME SALES

2011 $368,201 105 $17,683,201 39

2010 $350,000 101 $70,998,176 139

2009 $350,000 165 $53,789,868 93

2008 $615,000 210 $92,236,284 89

2007 $687,500 163 $120,655,988 118

The average sales price decreased from 2007 through 2010, but in 2011 the average sales price increased due to several sales near the very top end of the listed homes in Big Sky.

YEAR AVERAGE SALES PRICE

2011 $769,230

2010 $510,778

2009 $578,385

2008 $1,036,362

2007 $1,022,508

 

Posted by

Don Pilotte, Broker, GRI, RRS

Prudential Montana Real Estate

Big Sky Office- Town Center

55 Lone Peak Drive Ste. 3

Big Sky MT 59716

cell: 406-995-4060

email: don.pilotte@prumt.com