U.S. Vacation Home Rebound Lifts Hilton Head to Hawaii – Bloomberg 06-14-13

Salient to Investors:

The South Carolina Association of Realtors say 2013 values in the Hilton Head area are up 11.1 percent from the first  5 months of 2012, sales are up 9.3 percent, while prices are down by a third from 2007.

Increasing buyer confidence is spilling into seasonal communities from Lake Tahoe to the Berkshires.

Jeff Meyers at Kennedy-Wilson says vacation-home demand relies on discretionary spending and typically lags behind the broader housing market by 1 to 2 years, and is starting to see many resort markets strengthen Meyers said rising prices in the core markets has a big influence on what people do with vacation homes.

CoreLogic said US home prices rose 12.1 percent in April, the biggest rise since February 2006 and the 14th consecutive year-over-year increase.

Jed Kolko at Trulia said a vacation home is not most people’s first purchase emerging from a recession.

Lawrence Yun at NAR expects meaningful upward movement in vacation-home transactions in 2013 and into 2014.

Chris Fair at Resonance Consultancy said:

  • Sales of getaway homes may increase to 650,000 by 2015 and then plateau for several years at 600,000.
  • Beach and mountain retreats near growing cities or those with long histories will see the fastest rebound – the ‘A’ destinations.
  • Projects in areas not the traditional vacation destinations and hard-to-get-to places will take the longest and may not ever recover to the peak prices – like Central Oregon and the Florida Panhandle.
  • Second-home sales will be limited because the US population aged 45 to 54, the prime buying market, will decline by 8 percent from 2010 to 2020.
  • We won’t see the highs of 2005 or 2006, when it was over 1 million, for the next 10 to 20 years, largely because of demographics.

Congress is considering altering the tax code, including possible limits on mortgage interest deductions for non-primary residences.

DataQuick says home prices are up 30 percent in the 12 months through May in Los Angeles-area, up 24 percent in Palm Springs, and up 25 percent in Rancho Mirage.

Lake Tahoe was among the first resort areas to bounce back from the recession – typical buyers are technology or finance executives in their mid-40s.

CoreLogic said home prices in Hawaii rose 17 percent in April from a year earlier. Kevin Miyama at the Honolulu Board of Realtors said what is really picking up is the luxury market.

Read the full article at http://www.bloomberg.com/news/2013-06-14/u-s-vacation-home-rebound-lifts-hilton-head-to-hawaii.html

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