Friday, April 24, 2009

Bargain Hunters Heat Up Vegas Home Sales

More interesting than national numbers on sales of existing homes, both primary residences and second homes, is the growing appetite among shoppers in snapping up foreclosed properties at fire-sale prices.

"Homebuyers shrugged off economic worries and pounced on sharply discounted foreclosed homes in California, Nevada and Arizona, driving up sales last month across the West, according to two reports," the AP reported yesterday.

But the median price for these homes sold in the 13-state West region was down 11 % to $252,400. The red hot center for sales: Las Vegas, which in March saw its median home price fall "about 42 percent to $135,723."

No surprise here. Investors with cash see rock-bottom prices as a chance to take advantage of the opposite end of the Vegas home-building boom. One broker told Alex Veiga of the AP that his buyers were chiefly Californians. ""The biggest difference between now and the investors from '04 is these investors are buying them in full cash, and in '04 it was everyone buying them with zero-down loans."

Takeaway point: We seem to be entering the vulture phase of real estate enterprise.

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Friday, April 17, 2009

Vacation Home Prices and Sales Plunged in 2008, says NAR. This is News?

Surely nobody following the economic crisis was surprised when the National Association of Realtors announced recently that second-home prices and sales fell in 2008.

The real question is: what now? Is there any good news that might pull sellers and real estate agent out of the mire?

In three words, I don't know... and I doubt anyone else does, either. There is anecdotal evidence that banks are beginning loosen up their purse strings a wee bit for primary homes. But vacation or second homes are being sold in large measure either for cash or with seller finanding, say experts.

The data from 2008 itself: bleak.

"The median price of a vacation home was $150,000 in 2008, down 23.1 %from $195,000 in 2007. The typical investment property cost $108,000 last year, which is 28 % below the 2007 median of $150,000," according to the NAR press release. The actual number of vacation homes purchased last year was down more than 30 %, while investment-home sales dropped more than 17 %.

The most important stat: "more than 4 out of 10 investment buyers and more than 3 in 10 vacation-home buyers paid cash for their properties. That's heartburn territory for sellers.

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Friday, April 03, 2009

Reefs Club – Landmark Bermuda Hotel Sells Fractionals

Guests of the Reefs, a 62-year old family-owned boutique luxury hotel on its own idyllic beach in Bermuda, are known for their loyalty. Some have vacationed there 20, 30 and more times. Now the Reefs is counting on loyalists as well as newcomers to buy into its 19-unit private residence club. The Reef Club -- fractional-ownership two- and three-bedroom “villas” adjoining the hotel -- are nearing completion and will open July 3. (Photo above shows what it will look like when villas are completed.)

By Bermuda standards, the 1/10th ownership furnished fractionals are “affordable” -- $350,000 for a 2-bedroom, $410,000 for a 3-bedroom. (Another 13 % is tacked on in fees, taxes and closing costs.) Full ownership condos elsewhere on this adorable, expensive island start at over $1-million, although one real estate agent, Buddy Rego, said last month that no Americans went to closing on condos anywhere in Bermuda in the first quarter of 2009.

Bermuda’s restrictive laws on non-Bermudian ownership of property keep prices high. Yes, the worldwide recession is taking its toll. Since Reefs Club fractionals were first offered, 30 out of 80 early birds who had put down “soft” $5,000 deposits have opted to pull out, according to Chrissy Frith, membership director.

Nevertheless, Reefs president David Dodwell told me that he has no plans to lower prices, although he might consider some “value-added” incentives, such as rebates on certain homeowner fees for a period of time. The villas give Reefs fans a “rare opportunity,” he said, adding that some units might be used for overflow hotel guests during peak times. The villas building will also house a much expanded spa and fitness center.

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