The Alaska Real Estate Market is Hot!!!

The American desire to own a second home as a vacation home is alive and well!

As the following article will point out, the market is doing great.  Here in the Matanuska-Susitna Valley we are seeing multiple offers on everything and Days on Market is only a few days for a properly priced property that is in good condition. 

 After living through the economic crash as well as the real estate crash in Minnesota it is a wonderful thing to see the market thriving as it is here in Alaska.

I have attached an article showing the Vacation home trend.  We are seeing lake properties moving quickly here as well.

The National Association of Realtors analysis of U.S. Census Bureau data shows there are approximately 8 million vacation homes in the U.S. Their 2014 Investment and Vacation Home Buyers Survey shows vacation home sales improved substantially in 2013.

NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales:

“Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” he said. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”

Here are the key findings from the report:

Raw Numbers

• Vacation-Home sales rose 29.7 percent to 717,000 from 553,000 in 2012
• Sales accounted for 13% of all transactions last year, up from 11% in 2012
• The median price was $168,700, compared with $150,000 in 2012, reflecting a greater number of more expensive recreational property sales in 2013
• 42% of vacation homes purchased in 2013 were distressed homes (in foreclosure or short sale)

Buyer Profile

• The typical vacation-home buyer was 43 years old
• The median household income was $85,600
• Buyers plan to own their recreational property for a median of 6 years
• 33% said they were likely to purchase another vacation home within two years
• 82% of all second-home buyers said it was a good time to buy (compared with 67% of primary residence buyers)

Reasons for Purchasing

Lifestyle factors remain the primary motivation for vacation-home buyers:

• 87% want to use the property for vacations or as a family retreat
• 31% plan to use it as a primary residence in the future
• 28% wanted to diversify their investments or saw a good investment opportunity
• 23% plan to rent to others

Location

• 41% of vacation homes purchased last year were in the South
• 28% in the West
• 18% in the Northeast
• 14% in the Midwest

The vacation homebuyer purchased a property that was a median distance of 180 miles from their primary residence (down from 435 in 2012)

• 46% were within 100 miles
• 34% were more than 500 miles

Financing

• 38% of vacation-home buyers paid cash in 2013
• The median down payment was 30%, up from 27% in 2012