Whether you’re in the market for a lakeside cottage, a mountain cabin, a ski chalet or an island retreat, the vacation home market is warming up. If you have strong credit scores, this could be the right time to take the plunge.
According to a January 10, 2010 article in The NY Times, “Lenders now appear willing to finance second homes, but borrowers must be patient, eminently qualified and strategic about their house choices.” In general, you need a strong credit score and a substantial down payment to qualify for a mortgage on a vacation home.
Vacation home sales on the rise
According to the National Association of Realtors, vacation home sales recovered in 2009. NAR’s 2010 “Investment and Vacation Home Buyers Survey” indicates that in 2009, vacation home sales rose 7.9 percent nationally to 553,000, up from 513,000 in 2008. Around one in ten residential home purchases in 2009 were vacation homes, about the same share of the market as in 2008. In addition:
- Half of all vacation homes purchased were in the South, 21 percent were in the West, 17 percent were in the Midwest and 12 percent were in the Northeast.
- Seven out of ten vacation homes purchased were detached single-family homes.
- The overwhelming majority of vacation homes were more than 100 miles from their owner’s primary residence.
- The median price of a vacation home increased by 12.7 percent from 2008, possibly because more vacation home sales were occurring in higher-priced markets.
In short, the numbers for 2009 are a good indication that the vacation home market picture is looking brighter all the time.
This article was written by Noelle Bortfeld.