South Padre Island Real Estate Blog
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The
reason for the decline in the second-home market in 2006 was due to a
big decline in investment-home sales despite a great year for vacation
properties.
Second-home sales accounted for 36% of all home sales in 2006, down from 40% in 2005 according to NAR. Investment-homes dropped 28.9% while vacation home sales rose 4.7%. When it comes to market share, 22% of all homes purchased last year were for investment and 14% were vacation homes. NAR's research showed the typical vacation home buyer in 2006 was approximately 44 years old, had a median income of $102,200 and purchased their vacation home property in a median range of 215 miles from their primary residence. Vacation home sales are still expected to be brisk due to the fact that there are large numbers of buyers in their prime buying ages and they want recreational property for their own personal use. Investment is becoming a secondary consideration. A large group of buyers in the 40-49 year old range will continue to drive the vacation home market in the coming ten years. 79% of the buyers say they want the property to use as a family retreat; 34% to use as an investment; 28% to use as a primary residence in the future. Most vacation homes are being purchased in rural areas. Vacation home buyers plan to keep the property for at least 10 years and see it as an investment. The investment buyers last year were approximately 39 and had an average income of $90,250. The properties were bought close to their primary residences. Suburbs seemed to be where most buyers were looking while most of the activity was in the South. 32% of the buyers actually paid cash for their purchases. Most investment buyers plan to hold their property for approximately 5 years and then sell. The average price of a vacation home in 2006 was $200,000, down from the previous $204,100 in 2005. Some other interesting statistics include... New homes make up large share of the market. Most buyers are married. Most used Real Estate Agents. Buyers have a rosy market outlook. Most Buyers had more than two homes. Courtesy of Realtor Magazine Online. |
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We
made it through another Spring Break which was actually very quiet here
on the Island. There were not a lot of spring breakers this year. The
Island really was not congested with traffic as we have seen in
previous years.
The medians have been completed with Palm Trees and lights down the middle of Padre Blvd. I am hoping they will decide to finish the project all the way down the boulevard. It really looks great. We heard from the Chief Economist for Stewart Title Company several days ago regarding the sale of real estate and how the market was doing. It was his opinion, and I tend to agree, that even though the market may be down in other areas it doesn't seem to affect the real estate market here on South Padre Island. Properties are still selling and still appreciating. It was also interesting to note that 79% of all buyers are now using the web while looking for real estate and particularly in places like South Padre Island, TX, where we sell a number of second homes or vacation homes. He also went on to say that 29% of all that are looking on the web saw the property that they end up purchasing on the websites of various real estate agencies and companies. Only 5% of the total buyers are looking for their real estate needs through the newspaper. He feels that the economy is strong right now and that is what will continue to control the real estate market whether here on South Padre Island or in other areas of the country. Real estate has always been a very good investment, normally appreciating in value through the years. Many of the baby boomers feel that it is safer to put their money into a second home or vacation home such as South Padre Island, TX has to offer than it is to put it into the stock market. |
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Well,
finally the sun is back and what a glorious day. Real estate on South
Padre Island has been rather slow the past month or so. The weather may
have had something to do with that.
Condominium and home sales have been sluggish as we move into our Spring market. The inventory of real estate for sale on South Padre Island is good for those looking to buy a vacation home. TXDOT is nearly done with the medians and palm trees, so if you have not been to the Island recently...what a difference you will see. They have moved along rapidly and there really have been only a couple of days where the traffic was a bit backed up. But, I believe it has been well worth it. Everyone is gearing up for spring break which will be here in a couple of weeks and a lot of our Winter Texans are thinking about heading back to the North. From the weather reports, I think I might consider staying another month if I were still a Winter Texan. Sounds like lots of snow and very cold weather. Let me hear from you if you have questions or comments about the South Padre Island area. |
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As
we begin this new year here on South Padre Island, I will try to keep
you informed of what is happening in the real estate industry. Our
market area covers condos, townhouses, homes, lots and acreage here on
South Padre Island. As well, townhomes and golf homes in the South
Padre Island Golf Community.
2006 was a great year for real estate on South Padre Island. Interest rates remained low and a lot of new construction began. Along with the larger condo projects there are a number of smaller complexes on the Island. In the next couple of weeks, I will be posting what our average appreciation was on South Padre Island this past year along with the past performance in 2004 and 2005. As we begin this year, let me invite you to join my blog and/or ask questions as we move forward in 2007. |
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