From the National Association of REALTORS: Vacation Home Sales On The Rise

From the National Association of REALTORS:

Vacation Home Sales Pick up Slack as Investments Wane

Vacation home purchases recovered strongly in 2013, helping to offset some of the inevitable flagging interest in investment purchases the National Association of Realtors® (NAR) said today.  NAR's 2014 Investment and Vacation Home Buyers Survey shows an increase in vacation-home sales during the year of 29.7 percent.  There were 553,000 such sales in 2012, an estimated 717,000 in 2013.

At the same time investment purchases retreated from the elevated levels of 2011 and 2012, falling 8.5 percent to 1.10 million in 2013 from 1.21 million in 2012.  There were 1.23 million such sales in 2011.  NAR's investment sales figures do not include institutional sales.  Sales of owner-occupied homes rose 13.1 percent to 3.70 million last year from 3.27 million in 2012.

NAR Chief Economist Lawrence Yun said the pullback in investment activity is understandable. "Investment buyers slowed their purchasing in 2013 because prices were rising quickly along with a declining availability of discounted foreclosures over the course of the year," he said.

"In 2011 and 2012, investment property was a no-brainer because home prices had sharply over corrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework."

Yun said the improvement in the vacation home market was also anticipated.  "Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property.  However, vacation-home sales are still about one-third below the peak activity seen in 2006."

About 13 percent of all 2013 sales were of vacation homes, up from an 11 percent share in each of the previous two years. This was the highest that recreational property share has been since 2006.  The portion of sales accounted for by investment activity fell to 20 percent in 2013 from 24 percent the previous year.

The median investment-home price was $130,000 in 2013, up 13.0 percent from $115,000 in 2012, while the median vacation-home price was $168,700, up 12.5 percent from $150,000 in 2012.   The median owner-occupied home price was $189,000, a 2013 increase of 11.2 percent.  All cash purchases were common for both investment and vacation home transactions as were large down payments.  Forty-six percent of investment purchases were all cash while the median downpayment for buyers obtaining a mortgage was 26 percent.  The median downpayment for mortgaged vacation homes was 30 percent although 38 percent were all cash sales.  Distressed homes continued to play a significant role in the non-owner occupied market, accounting for 47 percent of investment sales and 42 percent of vacation homes. 

While NAR said lifestyle factors were the primary motivation for vacation home buyers and rental income was driving investment purchases, the data also shows some blurring of the lines.  Five percent of vacation-home buyers reported they had already resold their property and while 9 percent plan to do so within a year. Buyers plan to own their recreational property for a median of 6 years, down from 10 years in 2012.

Yun said those figures "reflect the 28 percent of recreational property buyers who said they purchased to diversify investments or saw a good investment opportunity."   Eighty-seven percent of recreational buyers did state an intent to use their property for vacations or a family retreat and 31 percent say they will eventually use it as a primary residence; 23 percent intend to rent the property to others.

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.  Sales of investment properties followed a similar pattern with 38 percent purchased in the South, 25 percent in the West, 18 percent in the Northeast and 19 percent in the Midwest.

Fifty percent of investment buyers said they purchased for rental income, 34 percent wanted to diversify their investments or saw a good investment opportunity, and 22 percent bought for a family member, friend or relative to use.  Seven percent of investment homes purchased in 2013 had already been resold by the time of the survey and another 10 percent were planned for sale within a year. Overall, investment buyers plan to hold the property for a median of 5 years, down from 8 years in 2012.

The typical vacation-home buyer was 43 years old, had a median household income of $85,600 and purchased a property that was a median distance of 180 miles from his or her primary residence; 46 percent of vacation homes were within 100 miles and 34 percent were more than 500 miles. Investment-home buyers in 2013 had a median age of 42, earned $111,400 and bought a home that was relatively close to their primary residence - a median distance of 20 miles.

NAR conducted its 2014 Investment and Vacation Home Buyers Survey in March 2014 among buyers of about 2,203 homes purchased during 2013 from a representative panel of 2,008 U.S. households. The survey controlled for age and income, based on information from the larger 2013 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.  NAR's analysis of U.S. Census Bureau data shows there are 8.0 million vacation homes and 43.7 million investment units in the U.S., compared with 74.7 million owner-occupied homes.

For more information on this or owning a vacation home in Telluride, please contact Telluride Real Estate Corp. at 970-728-3111, www.telluriderealestatecorp.com or info@telluriderealestatecorp.com.

From The Telluride Watch: Telluride Tourism Up in 2013

Telluride Tourism Sees Growth in 2013

by Samuel Adams

Mar 12, 2014

TELLURIDE – Things are looking up for Telluride’s tourism industry, according to Matt Skinner, chief operating officer of the Colorado Flights Alliance, Michael Martelon, president and CEO of the Telluride Tourism Board, and Brad Larsen, director of sales and marketing at the Telluride Ski Resort.

The three gave presentations outlining the strength of the region’s tourism economy last week during TTB’s annual meeting at the Sheridan Opera House.

More people are flying to the region, said Skinner, who oversaw an increase in 10,000 seats sold in 2013, increasing total seats sold from 54,000 to 64,000. The increase, he added, was due in large part to the addition of Allegiant Air, a low-cost airline.

But he said his work is not done – CFA was working to secure more flights from large hubs like Dallas, Atlanta, Chicago and others.

“Our continuing mission is to add airline access to the Telluride and Montrose region,” Skinner said in an interview after the presentation. “We had a solid jump in seats and traffic, and we look forward to continuing that in the next couple of years.”

While CFA increased seats and passengers, more visitors are skiing this winter season, said Larsen during his presentation, who said that skier visits are up nine percent from last year, and Telski’s lodging options are seeing a 19 percent increase in occupancy.

On top of all that, last year’s combined winter and summer tourism revenue in Telluride and Mountain Village increased by $16.4 million compared with 2012, said Martelon.  

“I just report the numbers,” said Martelon during the presentation, which was packed with local realtors, business owners and elected officials. “We try to enhance the brand, but you’re responsible for that growth.”

Martelon pointed to an increase in revenues per available room, using RevPAR, a hospitality performance metric that he said reflects the overall health of the region’s tourism industry. RevPAR, he said, is calculated by multiplying a hotel’s average daily room rate by its occupancy percentage, which has been increasing in Telluride and Mountain Village since he joined TTB in 2011.

“RevPAR is one of many key metrics that we use to gauge the lodging performance in the region,” he said during the presentation. “Ultimately our organization is funded by the lodging community, so it’s imperative that we support their success. RevPAR is one way to measure that success.”

With Telluride’s improving tourism market, the towns of Telluride and Mountain Village have felt the buoyancy.

“We were 9.5 percent over what we budgeted for 2013 in sales tax revenues,” said Telluride Town Manager Greg Clifton, after the meeting, “and I think this is reflective of strong growth throughout the year, particularly during the summer months.”

Similarly, Mountain Village’s sales tax revenues are growing. The town saw an average growth of roughly 18 percent in the core winter months (Dec.-March) and summer season (June-Sept.), from 2011 through 2012 and 2012 through 2013, according to Martelon, who added March 2013 was the highest tax revenue month in Mountain Village’s history).

In addition to a healthier national economy, longstanding summer festivals that are growing in attendance and increased heritage tourism, Clifton attributes some of the town’s growth to TTB’s “remarkable” efforts to market the destination.

Last year, TTB, CFA and Telski announced a new combined marketing campaign to promote Telluride using digital media.

“The integrated approach and shared analytics between the three entities is a first [for all three of us], and I think it’s working to promote the destination,” Martelon said in an interview.

With the increase in skier visits and the town’s recovering tourism industry, Larsen implemented a survey method asking guests about their experience at the resort, another industry formula called the Net Promoter Score.

A “promoter” is a respondent that gives their experience at the resort a score of nine or ten (one being the least satisfied, ten being the most satisfied). A “passive” respondent, said Larsen, gives the resort a seven or eight, and “detractors” give the resort between a one through six.

“Our core net promoter score that our or organization looks at every day is the ‘Likelihood to Recommend’ [the resort to others] score,” said Larsen. “Our season-to-date score is now 81. This score is excellent.”

Telluride Included In The Top 10 Ski Resorts For Real Estate Investing As Reported By RealtyTrac

Based on factors such as distance from the nearest airport, median list price, unemployment rate, gross rent yield, rental vacancy rate and "pure awesomeness factor," RealtyTrac has ranked Telluride #10 in their rankings for "The Best Ski Resort Towns For Real Estate Investing."

For more information on Telluride real estate, please contact Telluride Real Estate Corp. at 970-728-3111, info@telluriderealestatecorp.com, or visit www.telluriderealestatecorp.com

Men's Fitness Names Telluride Best Ski Trip For Views

From Men's Fitness:

BEST FOR VIEWS

Telluride, CO

There are few authentic-feeling ski towns left, and Telluride is one of them. Located at the end of a box canyon, there’s only one road in and one road out. It has super-remote access to more than 2,000 acres of terrain, 127 trails, bowls, and several long four- to five-mile runs. It’s the kind of town where everyone knows everyone, and there’s a “free box” in the center where people can trade gear. After you’re done shredding the slopes, you can go to Brown Dog Pizza for a cheap slice and pint of Pabst, like a true Colorado native.

www.telluriderealestatecorp.com, info@telluriderealestatecorp.com, 970-728-3111.