National vacation home sales at highest level since 2006
By Francis Phillips
For The New Mexican
Santa Fe has traditionally been a popular choice for second-home buyers. The combination of art, scenery, culture, food, history, weather, shopping and outdoor activities (I could go on and on) makes Santa Fe an attractive destination.
There’s a new buzz coming from Creative Santa Fe, an organization committed to advancing cultural and creative economic development. Some of its ideas are affordable live, work, performance and exhibition spaces for creative workers; a creative corridor along St. Michael’s Drive; high-speed broadband infrastructure throughout the city and Santa Fe County; supportive entrepreneurship training for creative workers and market access for locally produced creative products and services; promotional strategies to showcase the richness and diversity of Santa Fe’s arts, science and cultural industries; and the encouragement of elected officials to support funding for the arts and cultural programs.
That’s only part of the agenda, and it brings new energy and enthusiasm to draw even more interest in our town.
Santa Fe relies on healthy home markets in other states to provide the buyers for second homes here. The 2008 national housing slump had a major effect on our second-home market. So where are we now? Traditionally, we hear about buyers coming from Texas, California and New York, but in our office, we’re also seeing second-home clients from Oklahoma, Washington, Illinois, Maryland and Connecticut, to name a few. It’s a good trend.
Nationally, the housing market has stabilized. And as I write this in late October, we are still seeing annual percentage rates for home loans in the threes and fours. If you will need to take out a loan, remember that a second-home loan requires a minimum 10 percent down payment, and an investment property loan requires 20 percent down.
The National Association of Realtors 2014 Investment and Vacation Home Buyers Survey showed an uptick in second-home purchases and a slight drop in investment-property buying, but both categories were stronger than in 2010 and are almost the same as 2007 levels. In fact, vacation home sales were at their highest level since 2006. Nationally, vacation home sales were up almost 30 percent over 2012. Forty-one percent of vacation homes purchased last year were in the South, 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest.
Specific Santa Fe second-home trends are harder to quantify. The Santa Fe Association of Realtors released its third-quarter report in October. Overall, it showed a slightly cooler market than the same period the year before. Closed sales year-over-year were down almost 5 percent. The median sales price was down almost 1 percent. And inventory was up slightly by more than a half a percent. Second-home sales are not broken out in this report, but my view is that it shows there are second home and investment opportunities in our market. Coupled with current low interest rates, Santa Fe is an attractive place to buy.
If you’ve been thinking about a second home, this may be the right time to do some serious looking — and purchasing.