When is the right time to buy that dreamed of retreat? Perhaps a second home on a lake, or a mountain condo at the base of Breckenridge, Keystone or Copper Mountain?. It’s impossible to know where the housing market will go from here. In years past we have seen record number of sales in Breckenridge and the surrounding area in Summit County. Real Estate sales activity is cyclical. when buyer demands are high, interest rates are low and the supply of homes is low, home prices tend to rise. The problem is finding a place to buy when demand outpaces supply. When home prices slow down the supply of homes for sale tends to rise. One of the biggest concerns today facing people who are purchasing real estate is that home prices have risen significantly in many areas like Breckenridge, keystone and Copper Mountain ski resort areas in the past 5 years. During this same period interest rates dropped to multi-decade lows. It was not until recently that interest rates begin to rise again.
The answer depends on the economic situation in the locale. As the national economy picks up, interest rates will rise, the employment situation for many will improve and if so, household incomes should grow. Unless interest rates rise rapidly, increasing incomes should make up for the decrease in housing affordability. However if your local economy lags, you could be faced with a higher interest rate which result in higher housing costs at the same time the average local income becomes static or declines. In this situation, home prices could drop, particularly if there’s a glut of inventory on the market.
There is no harm in buying at the high point in a market cycle as long as you’re not forced to sell when the market is down. Timing markets are difficult. Some people wait until all the conditions are right, which you make not know until after the fact. You could miss opportunities if you wait. The right time to buy is when you have financial security; you can afford to buy; you find the right house, or want to move on your dreamed of second home. Across the U.S., there are signs of a cooling housing market. Yet, in pockets throughout the country, there is a contrasting trend — areas sidestepped by the real-estate boom are experiencing increased buyer demand, says David Lereah, chief economist of the National Association of Realtors. If you are interested and would like to explore if the market is right, your financial situation is right to explore second home ownership in Breckenridge, Keystone, Copper Mountain, Dillon or the Frisco area in Summit County visit http://www.summitcountymountainproperty.com and let them know you would like to explore the possiability.
Their staff is incredibly knowledgeable about the Summit County market and have access to whole lending sources that give you a definite financial advantage.
Nearly 28% of homes bought last year were for investment purposes, and an additional 12% were vacation homes, the figures show. Most of the buyers were baby boomers in their top earning years, looking toward retirement and hoping to build wealth or find a more desirable place to live. “Baby boomers are such a powerful economic force,” said Dave Jenks, co-author of The Millionaire Real Estate Investor. “They’re using their wealth to go buy second homes.”
Real estate, over the past five years, has outperformed virtually every other investment vehicle. The trend really started after 1997, when Congress changed the tax code, allowing most homeowners to duck capital gains taxes when they sold their homes. The exemption is $500,000 for married couples, $250,000 for singles, if it was their primary residence for two of the past five years. The tax situations helped, but at the same time, baby boomers were entering their peak earning years. That’s why we just boomed in second homes.
Sales of vacation homes, though, are expected to stay strong for years, because the youngest baby boomers are only 42 this year.
The typical vacation home buyer last year was 52 years old, earning $82,800 a year, and purchased a property that was about 200 miles from the primary residence.
