Palm Springs Area Second Home Sales Update
Sales of second homes or vacation homes rose 57% in the U.S. last year compared to 2013 according to The National Association of Realtors (NAR). During 2014, 1.3 million vacation homes were sold which is a new record.
And according to this NAR survey, vacation homes accounted for 27% of all real estate transactions last year. The survey also found that 85% of vacation homebuyers think that now is a good time to invest in real estate.
These trends appear to parallel what we are experiencing here in the Palm Springs real estate market. 2014 was a record year for Sheri Dettman & Associates, and so far 2015 is tracking well ahead of last year.
Several Reasons Second Home Sales Are Strong
Baby boomers remain a driving force behind second home sales. Many boomers have enjoyed a six-year market rally, and some of these boomers are now taking some of those gains out of the market and investing in second homes.
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Many of our current boomer clients also tell us that as they move closer to retirement they are investing in second homes that they’ll later make their primary residence.
Desert Buyers Taking Advantage Of Today’s Low Interest Rates
In past years, we saw a mix of about 50/50 cash versus loan purchases. This year however we’re seeing more buyers taking advantage of today’s low-interest rates and conserving cash. That said, many mortgage experts expect interest rates to start rising sooner rather than later.
Canadian Buyers Coming Back Into The Palm Springs Market
As the Canadian Dollar retreated against the U.S. dollar last year, we experienced a pullback in second home purchases by Canadians. U.S. homebuyers, especially from within the State of California stepped up in large numbers to keep our market growing.
Now however we’re starting to see a lot of Canadian buyers jumping back into the Palm Springs area market, and in all price segments from affordable to luxury. We have also seen quite a few Canadians with existing Palm Springs area homes trading up this year.