resortrealestate

Are you looking to own the most expensive resort real estate in the world?  If so you might want to head straight to Monaco.  Monaco has been confirmed as the destination with the most expensive real estate in the world.  Real estate in Monaco averages $68,000 per square meter, a 2.1% increase from 2008.  Clearly Monaco isn’t feeling the pinch felt elsewhere around the Globe.  If you are interested in looking at Global Resort Real Estate in countries like Monaco, you can actually start the search in your own backyard.  Companies like Sotheby’s and Christies Great Estates have access to listings around the world and can often find you the property you are looking for without having to even board a plane.  If you are on vacation in Vail Colorado for example, stop in to Sonnenalp Real Estate, an exclusive affiliate of Christies Great Estates.  A broker in their office can then access listings from around the world and connect you directly with a listing agent for a property you might be interested in.  As the old saying goes, “think globally, shop locally”.  Purchasing resort real estate is easier than ever with global networks like Christies and Sotheby’s, not to mention the advent of internet technology.

While there is no doubt that the housing market is in poor shape, it has improved slightly.  As they say, baby steps.  An article at Business Week states that “the housing market is in terrible shape, but several reports this week provide some reason for springtime optimism. The Commerce Dept. reported that new-home sales increased by 4.7% on a seasonally adjusted basis in February compared with January. Sales of used homes jumped 5.1% in February compared with the previous month’s seasonally adjusted rate, the National Association of Realtors reported. And the Mortgage Bankers Assn. said mortgage applications surged 32.2% for the week ended Mar. 20 over the previous week (though much of that activity was related to refinancing).”  The article goes on to quote Lisa Burns, vice-president at John Burns Real Estate Consulting , as saying “The market conditions have improved, but conditions are still fairly horrible…. Maybe it has moved from an F grade to a D-, but it’s moving in the right direction.”  Most students would take a D- over an F but we all have to agree the difference is small.  At this stage in real estate, however, small improvements are better than no improvements and if it takes baby steps to get the real estate market to improve let’s hope people start walking soon.

Mortgage rates through Thursday March 26th were 1% lower than they were a year ago and have well-surpassed the 30 year record low mark.  Mortgage rates were averaging 4.85% for a 30 year fixed mortgage yesterday, a testament to the fact that what the Goverment is doing is working for real estate.  Going hand-in-hand with the decrease in mortgage rates is the increase in home sales, up 5.5% last month.  The decrease in mortgage rates is tied directly to the Federal Reserve and its commitment to pushing money into the Treasury.  According to NAR (the National Asssociation of Realtors) “potential homebuyers are taking notice of these historically low mortgage rates. Both new and existing home sales rose 5 percent in February. First-time homebuyers accounted for half of all existing home sales.”  Clearly the decrease in mortgage rates, the decline in home values and tax incentives are working at getting people off of the sidelines and into real estate.

The Federal Reserve is doing its best to invigorate the housing market and its current plan is to invest an additional $750 billion into Fannie and Freddie.  The influx of cash into the mortgage market is expected to drop interest rates even further, making 30 year fixed rates to be 4.5% or possibly even lower.  This move by the Federal Reserve will make property less expensive and create a great deal of opportunity for those looking to invest in real estate .   According to a recent article by Kenneth Harney “rates in the mid-four percent range or lower could even put upward pressure on selling prices. That’s because when you lower the monthly cost of borrowing to buy a house, you make it more affordable, even at a slightly higher price.”  The Federal Reserve is doing what it can to revitalize the real estate market , let’s see if it builds the confidence that buyers need to jump in.

This move by the Federal Reserve will definitely affect resort real estate as well.  People looking to buy second homes will be in a great position, low housing values will be even lower in the long run with such low interest rates.  If you have been waiting for the right opportunity to purchase your vacation home now just might be the time.

A friend of mine was in Deer Valley last week staying in a ski-in/ski-out four bedroom home that was on the market 2 years ago for $2.5 million.  Today the same ski-in/ski-out house is on the market for $850,000, granted it’s a short sale but still, what a bargain!  What a drop in price!  People in other areas are complaining about 20% drops in price, this is nearly a 66% drop in price.  What does this mean?  To me it means if I had the money I think I’d be heading to Deer Valley.  Seriously though, this economy is tough and tough on everyone but for those who still have money and have always wanted a second home there couldn’t be a better time to look than now.  Real Estate is a good place to put your money and if you own your home, why not buy a second home in a place where you want to spend time?  Most people dream of having a second home at some point in their lives why not make the move while the market is at the lowest.

There is good news for people who own second homes, refinancing for second homes and rental property has also become a priority of the efforts to turn the housing market around.  Where previously second homes and rental properties had been excluded from the refinancing package being passed by the new administration, last week that changed.  This is positive news for Resort Real Estate.  An article by Kenneth R. Harney at Realty Times stated that “Small-scale real estate investors got a pleasant surprise last week when Fannie Mae and Freddie Mac said they’d refinance potentially thousands of mortgages on rental and second homes as part of the Obama administration’s massive housing relief effort.”  This is great news considering that refinancing was going to focus on principal residences only prior to the announcement last week.  If your mortgage is held with Fannie or Freddie then this refinancing is potentially available to you.  If your payments have been on time you are eligible.  Looking into refinancing your second home or rental property just might be worth it and could potentially put some money back in your pocket. The good news is that Resort Real Estate is no longer exempt from getting assistance.

Desirable resort areas across the globe have been hot places to invest in realty forever but in recent years many areas were becoming so pricey that the invest opportunity didn’t appear as enticing.  Many resort areas priced out the average investor.  Today’s economy has created a great climate for investing in a second home .  Not only have home prices come down but so have mortgage rates.  If you still have your job and are unsure about investing in the stock market you may want to consider investing in real estate, specifically resort real estate .  Areas around the globe have been popular destinations and are now becoming popular investments.  According to a recent article at PropertyWire.com some Caribbean homes have dropped in price by a half million dollars or more.  Think about your favorite vacation mecca , whether it be a ski resort or a beach spot, and consider buying the home you want to escape to.

While legislation that has been proposed or passed thus far has been meant to stimulate the housing market, the latest proposal is questionable.  The latest plan of the new administration is a proposed mortgage interest deduction , which would cap all deductions at a 28% rate.  The plan is to reduce the mortgage write-off and it is causing a stir.  Many believe that the plan will affect people who make more money and who own higher-end real estate.  That brings up resort real estate because many people who own second homes are in the higher tax bracket, those who will be affected by the proposed plan.

Those that are against the plan believe that it will deter people from purchasing more expensive real estate. The National Association of Realtors (NAR), while they have supported the new administrations housing stimulus package thus far, is wholeheartedly against reducing the amount of mortgage interest that a person can write off.   NAR president, Charles McMillan sent a letter to President Obama stating his dissatisfaction with the new proposal.  In the letter McMillan said, “There is never a good time to propose something that undermines the basic foundation of homeownership, but given our current housing crisis, this has to be the worst possible time.” He went further to say, “The tax deduction of interest paid on mortgages is both a powerful incentive for homeownership and one of the simplest provisions in the tax code. It should not be targeted for change.”

In today’s economic climate, where every step possible is being taken to boost the economy and the housing market, no one wants to see a step taken backwards.  NAR would like to urge Obama’s administration to continue putting incentives in place and leave the tax write-off where it is for the time being.  Should this plan pass it could have an adverse effect on vacation real estate investing .

A few factors are making vacation real estate a smart decision .
- Mortgage rates are low
- Home prices are down
- Stock market is volatile
- Real estate has always, historically, rebounded
- Renting out your vacation home can help you pay for your investment
- Gone are the days of paying asking price or getting in a bidding war

If there is an area that you have always had your eye on now is a great time to consider buying your vacation dream home, especially when renting it out can help pay for it, if not more than pay for it.  In many areas of Hawaii prices are down 25%, in some resort areas of California prices have dropped nearly 50%.  Many ski resort areas may not be showing significant drops in listed prices but that doesn’t mean you won’t be paying less than you would have a year or two ago.
Vacation areas will always be in demand, whether it be for rentals or for purchasing.  Resort real estate is a great investment especially when traditional stock investments are so volatile.  If you thought you may have been priced out of your dream vacation home now is a great time to take another look.

Ski Towns across the country have proven to be great investments over the years, not to mention fantastic places to spend time.  Towns like Aspen and Vail in Colorado have real estate that has traditionally done nothing but go up in value.  With world class skiing out the door, real estate prices really have no where to go but up as these towns remain desirable destinations for people from across the globe.  Typically space is limited and the valleys in mountain towns only have so much land to build on.  As developments expand further and further away from the core of a ski village the property within that town core becomes that much more valuable.

Another aspect that these fabulous mountain towns have to offer is summer.  Summer offers a plethora of activities, from hiking and biking to horseback riding and camping.  A healthy lifestyle mixed with fine dining and great shopping.  There is often a great deal of cultural offerings as well.  Vail offers an amazing variety of culture as well with Bravo , an offering of classical music, and the Vail International Dance Festival , which hold events at both the outdoor amphitheater in Vail and the Vilar Center in Beaver Creek.

Take advantage of lower home prices and low mortgage rates and consider purchasing ski resort real estate , there couldn’t be a better time to buy.  While resort real estate may have been out of your reach a few years ago, it may not be today.  With a large inventory and people needing to sell the buyer is in the position to name his price!