I was recently interviewed by a report with Imann news about my involvement in the second home market here in Central Florida. The article was published this morning and i wanted to share it with everyone.

Published on Inman News (http://www.inman.com)
Foreign buyers fuel second-home sales, while U.S. buyers hold back
By Glenn_Roberts
Created 03/31/2008

Sales of vacation properties fell 30.6 percent in 2007 compared to the prior
year, with investment-property purchases down 18.1 percent, according to an
Investment and Vacation Home Buyers Survey [1] report released by the
National Association of Realtors.

Total sales of new and resale homes used as primary residences, by
comparison, dropped 10 percent from 2006 to 2007, survey results revealed.

Based on responses from 1,965 second-home buyers, the survey concludes that
investment-property purchases accounted for 21 percent of total home sales
in 2007, down from 22 percent in 2006; while purchases of vacation
properties accounted for 12 percent of all home sales in 2007, down from 14
percent in 2006. The survey was conducted this month and controlled for age
and income.

Real estate professionals tell Inman News that foreign buyers are taking
advantage of lopsided currency values against the U.S. dollar in some market
areas and are propping up second-home sales while many U.S. buyers are
taking a wait-and-see approach. Markets with luxury properties can be more
immune to the slowdown in second-home sales, real estate professionals also
report.

Total sales [2] of resale homes, including sales of single-family homes and
condos and co-ops, dropped 12.8 percent from 2006 to 2007, NAR has reported
[3], to 6.48 million. And sales of new single-family homes dropped 26.4
percent year-over-year in 2007, falling to 774,000.

There were an estimated 740,000 sales of vacation properties, 1.35 million
sales of investment properties and 4.34 million sales of primary residences
in 2007, according to the survey.

The median sales price of vacation properties was estimated at $195,000 in
2007, down 2.5 percent from a year earlier, while the median sales price of
investment properties remained flat at $150,000 compared to the prior year,
according to the survey. By comparison, the median U.S. resale home price
was $218,900 in 2007, down 1.4 percent compared to 2006. And the median U.S.
new-home price was $247,300 in 2007, up 0.3 percent compared to the prior
year.

In last year's second-home survey [4], NAR reported that vacation-home sales
grew 4.7 percent in 2006 to a record 1.07 million, while investment-home
sales fell 28.9 percent to 1.65 million. That followed a record 2.32 million
investment-home purchases in 2005 [5].

Second-home purchases represented an estimated 40 percent share of total
home sales in 2005, compared with 36 percent in 2004 and 2006, and 33
percent in 2007.

Heather Joubran, a Realtor for RE/MAX Central Realty in Lake Mary, Fla., an
Orlando suburb, said U.S. residents have definitely scaled back on
second-home purchases in the Orlando area, but buyers from the United
Kingdom, Eastern Europe and Central America "are gobbling up second homes at
a pretty substantial rate."

Some of the foreign buyers are particularly eyeing foreclosure properties,
and coupled with the power of their currencies against the U.S. dollar,
"they are picking them up for pennies on the dollar," she said. Finding
properties for half the price that they were originally listed at is not
uncommon these days, she said.

While U.S. buyers of second homes may view the properties as an eventual
retirement home, foreign buyers more typically are looking to rent out the
properties for a profit. Foreign buyers are more likely to engage in cash
transactions than U.S. buyers, she said.

While Joubran said that sales in the Orlando market are not substantially
off from last year's sales, the inventory is huge. There is an estimated
34-month supply of for-sale home inventory, she said, which means that it
could take nearly three years to exhaust the current supply of homes given
the sales rate and large number of properties on the market.

The high inventory and foreclosure rates in the region "hasn't helped our
pricing," she said. That has made U.S. buyers particularly reluctant.

"They just won't make a commitment; they are stuck on the fence," she said,
adding that they are worried about what will happen if they buy now and the
prices drop further. "Nobody can time (the bottom) in real estate." There
are deals aplenty, though, she said, citing examples of properties that had
earlier sold for $350,000 now reduced to $200,000.

In the Miami area, home prices have dropped about 20 percent, but they may
still be highly inflated due in part to rampant speculation and incidents of
fraud, said Jack McCabe, of McCabe Research and Consulting, a real estate
consulting firm based in southeast Florida.

The influx of foreign buyers -- which he expects to rise in the coming
months, may lead to an overall statistical increase in sales in that market
area. And while real estate agents may cheer such numbers, McCabe said that
they may actually reflect a "false bottom" for the market, as U.S. buyers
are not lining up to return to the market. "The international buyers
definitely are the largest buyer segment right now in Florida."

Out-of-state residents who typically flock to vacation-home markets in
Florida may have much bigger worries these days -- like job losses and a
tough economy, McCabe said. Florida has been a popular second-home
destination for Manhattanites, and that may dry up a bit with the current
crises on Wall Street, he said. "I think we're definitely going to see a
continued decline in sales to Northeasterners, to New Yorkers -- especially
to those in Manhattan. This is the year that Main Street catches up with
Wall Street."

Second-home buyers are among the throngs of upset condo buyers who are now
signing on to lawsuits in an effort to withdraw from their initial deposits
that they placed on the units when the market was booming. And some lenders
have essentially "blacklisted some condo buildings for mortgage loans
because of declining market values," he said.

McCabe said that until prices drop more in Florida, he expects U.S.
second-home buyers may look abroad to developments in Costa Rica, Belize or
Mexico, he said. "I see a lot more opportunity for second homes that are out
of the country."

In Summit County, Colo., a popular ski destination, Realtor Joanne Hanson
said that the second-home market is still going strong for properties at the
high end and low end of the market, though there has been slowing in sales
for mid-range properties.

Most of the buyers that Hanson works with are in-state buyers from the
Denver and Colorado Springs market areas, she said, as Summit County is
within driving distance.

She said that she just closed a sale on a $2.3 million property. And at the
other end of the price spectrum, she recently listed a condo for $359,000
that has had five showings in the past two days.

While total transactions are down, the numbers have more to do with a
decline in inventory than a decline in buyers, she said.

The July through October sales will truly show how the market is faring this
year, she said, as those are typically the most active sales months in the
region.

"I'm counseling sellers to be realistic when they price -- not to get too
ambitious in how much money they get," she said. There are typically a small
share of foreclosures in the market area, and foreclosures haven't
(increased) much in her market area, she also said. But she has seen more
owners motivated to sell their second homes in the area because the housing
markets where their primary residences are located aren't faring so well,
she said -- "they need to cash out."

According to the NAR survey, the median age of vacation-home buyers is 46,
compared with 42 for investment-property buyers and 38 for purchasers of
primary residences. And the median income for vacation-home buyers is
$99,100, compared with $92,900 for investment-property purchasers and
$71,700 for buyers of primary residences.

Fifty-nine percent of vacation homes purchased in 2007 were detached
single-family homes, 29 percent condos, 7 percent townhouses or row houses,
and 5 percent were other types of homes. In 2006, single-family homes
accounted for 67 percent of vacation-home sales, while condos were 21
percent, NAR reported in the survey results.

Sixty-one percent of investment homes purchased in 2007 were detached
single-family homes; 20 percent were condos; 11 percent were townhouses or
row houses; and 8 percent were other. Twenty-eight percent of vacation-home
buyers paid cash for their property, and 35 percent of investment buyers
paid cash for their properties.

Lawrence Yun, NAR chief economist, noted in a statement that "second homes
are discretionary purchases and there is a natural tendency to pull back
from big-ticket items in periods of uncertainty." Another factor, he said,
"is the disruption in the mortgage market, with a significant tightening of
credit during the second half of 2007. Some buyers simply adopted a
wait-and-see attitude."

According to the report, 84 percent of buyers stated that they wanted to use
the home for vacation or as a family retreat; 30 percent to use as a primary
residence in the future; 26 percent to diversify investments; 25 percent to
rent to others; 16 percent for the tax benefits; 14 percent for use by a
family member, friend or relative; and 6 percent because they had extra
money to spend.

Nineteen percent of vacation homes purchased last year were in the
Northeast, 16 percent in the Midwest, 41 percent in the South and 24 percent
in the West, the report revealed. Thirty percent of vacation homes were
purchased in rural areas, 20 percent in resorts, 20 percent in a suburb, and
14 percent in an urban area or central city.

When asked about the most important reasons for their purchase of an
investment home, 51 percent said to provide rental income; 39 percent to
diversify investments; 21 percent to use for vacations or as a family
retreat; 16 percent for use by a family member, friend or relative; 11
percent for tax benefits; 10 percent to use as a primary residence in the
future; and 4 percent because they had extra money to spend, according to
the report.

Twenty-three percent of investment properties bought last year were in the
Northeast, 19 percent in the Midwest, 38 percent in the South and 21 percent
in the West; 39 percent were purchased in a suburb, 20 percent in an urban
or central city area, 21 percent in a small town, 15 percent in a rural
area, and 5 percent in a resort area.

Vacation-home buyers plan to hold onto the property for a median of 10
years, while 38 percent plan to keep it for 11 or more years. Investment
buyers plan to hold their property for a median of four years, with 29
percent planning to keep for six years or more and 10 percent planning to
sell in a year or less.

Also, the report found that 80 percent of second-home buyers consider it a
good time to invest in real estate, compared with 59 percent of buyers of
primary residences, and 44 percent of vacation-home buyers and 57 percent of
investment buyers said they were likely to purchase another property within
two years.

For information on buying or selling in Central Florida, Orange County and Seminole County, new construction or Relocation services contact your Lake Mary Real Estate Agent Heather Joubran @ 407-810-6304 or hjoubran@remax.net Seminole County consists of Lake Mary, Sanford, Heathrow, Longwood, Altamonte springs, Winter Springs, Oviedo. Orange County consists of Orlando, Downtown Orlando, Baldwin Park, Windermere, Apopka, Winter Park, Maitland, Disney, UCF, East Orlando, Lake Nona. I can help you with all your housing needs from Luxury Homes to First Time Home Buyers.

I have successfully helped over 100+ families buy or sell real estate.