First-time home buyers are not the only ones taking advantage of low prices and interest rates. According to the 2010 National Association of Realtors® (NAR) 2010 “Investment and Vacation Home Buyers Survey” vacation home sales increased 7.9 percent last year. In comparison, primary residence sales rose 7.1 percent. The general consensus is that the housing market has bottomed – finally. A recent Gallup poll concurs, with 77% of respondents believing this to be the case. In music to builder’s ears, new home sales jumped 27% in March, the biggest one-month gain in nearly five decades (since 1963). Standing new home inventory has declined for 31 straight months to achieve an all-time low and the reported March sales activity represents an impressive 23.8% year-over-year improvement. In other encouraging news, the closely watched S&P/Case Shiller Home Price Index reported its first annual increase in more than three years and one recent industry survey showed that more than half of agents polled reported that their selling customers received 95% to 100% of their asking prices. This compares to 53% in 2008 and 52% in 2006. Housing industry think-tank MacroMarkets recently surveyed more than 100 analysts and market strategists. Consensus findings suggest a 12.4% increase in housing prices by 2014 while some gurus think that rate could be as high as 37%.
Interest rates remain at historical lows – in the 5% range – and some lenders are once again funding jumbo loans, (mortgages exceeding $417,000) an encouraging indicator of a loosening credit market and continued interest in luxury residential investment. Nevertheless, the tighter credit market has more buyers paying cash for property, a condition that is serving to move standing inventory. According to Move.com, more than 12% of buyers plan to use 100% cash to purchase a new property and nearly 13% will use a cash down payment of more than 50%. 
The practicality of the matter is that no matter what condition the market is in, each individual must assess his or her specific conditions when considering the purchase of a new home, a second home or a retirement property. As buyers come off the bench, inventories will diminish and prices will increase as demand begins to exceed supply. If you are in the market for a new or second home, the cost of living in your market of choice should carry as much weight as the cost of the home you wish to purchase. According to a study conducted by Where to Retire magazine, certain markets can provide as much as a 30%+ cost of living savings. Myrtle Beach, SC, and Asheville and Wilmington, NC rank amongst these, and tax-free states such as Florida and Tennessee are seeing increased buying activity. Check out PrivateCommunities.com to learn about the myriad opportunities that are currently available in these markets and others.
