Morning Briefing: Americans bought fewer vacation homes last year

by Steve Randall07 Apr 2016
Americans bought fewer vacation homes last year
New figures from the National Association of Realtors reveals that purchases of vacation homes in 2015 fell by 18.5 per cent. The drop to an estimated 920,000 followed the 2014 peak of 1.13 million and covered existing and new homes.

Despite the drop, vacation home sales were still at their second highest level since 2006.  "Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,” said NAR chief economist Lawrence Yun.

Meanwhile, investment home sales increased by 7 per cent to an estimated 1.09 million in 2015. Owner-occupied purchases jumped 15.9 per cent to 3.74 million last year from 3.23 million in 2014.

The median vacation home price was $192,000, up 28.0 per cent from $150,000 in 2014. The median investment-home sales price was $143,500, up 15.3 percent from $124,500 a year ago.  
Commercial real estate set to decline says report
The volume of commercial real estate transactions in the US is set to decline over the next three years according to the Urban Land Institute (ULI) Center for Capital Markets and Real Estate.

The decline follows 6 years of growth in the commercial market and levels in the next three years will only be surpassed by 2015 and 2007.

The figures are based on a survey of 48 top economists and analysts and also reveal that Issuance of commercial mortgage-backed securities is expected to decline in 2016 to $85 billion and then return to $100 billion in both 2017 and 2018.

Other findings include an expectation that vacancy rates and rents will continue to improve over the next three years and prices are set to grow, but at a slower pace than the 5-year average of 5.8 per cent.

Single-family housing starts are projected to increase from 714,600 units in 2015 to 900,000 units in 2018, remaining below the 20-year annual average.
Insurer reveals costliest homeowner claims
Insurance firm Travelers has revealed the most common and costliest claims made by homeowners. The report, based on US home insurance claims from 2009-2015, shows that exterior wind damage is the most frequent cause of a claim (25 per cent) followed by non-weather related water damage (19 per cent), hail (15 per cent), weather-related water damage (11 per cent) and theft (6 per cent).

“Any number of things can go wrong with a home, and it’s impossible to predict them all,” said Pat Gee, Senior Vice President, Personal Insurance Claim, Travelers. “But if consumers focus on these particularly common risks and take preventive steps and perform routine maintenance, it may help lessen the likelihood of damage.”

Fire cause the most expensive claims and were often caused by appliances being misused or failing, electrical problems or cooking.