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US holiday home sales soared in 2014, annual report shows
Holiday home sales in the United States soared 57.4% in 2014 to above their most recent peak level in 2006, while investment purchases fell for the fourth straight year, new data shows. The annual survey by the National Association of Realtors reveals that holiday home sales increased to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Investment home sales in 2014 decreased 7.4% to an estimated 1.02 million from 1.10 million in 2013. Owner occupied purchases fell 12.8% to 3.23 million last year from 3.7 million in 2013. Lawrence Yun, NAR chief economist, described the holiday sales market as having seen astonishing growth, nearly doubling the combined total of the previous two years. ‘Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment,’ he said. ‘Furthermore, last year’s impressive increase also reflects long term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years,’ he added. Overall holiday home sales accounted for 21% of all transactions in 2014, their highest market share since the survey was first conducted. The portion of investment sales fell to 19% compared to 20% in 2013 and owner occupied purchases declined to 60% from 67% in 2013. ‘Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals,’ said Yun. The median sales price of both holiday and investment homes declined in 2014. The median holiday home price was $150,000, down 11.1% from $168,700 in 2013. The median investment home sales price was $125,000, down 3.8% from $130,000 a year ago. According to Yun, the decrease in vacation and investment sales prices is likely due to the increase in holiday and investment buyers purchasing condos and townhouses, which contributed to a decline in the median size of 200 square feet for both. Additionally, the rise in holiday home buyers purchasing distressed properties and buying in the South, where home prices are often lower, contributed to the overall decline in the sales price of vacation homes. The share of holiday home buyers who paid in cash fell to 30% from 38% in 2013. Investment buyers who paid in cash decreased to 41% from 46% a year ago. Of buyers who financed their purchase with a mortgage, nearly half, 48%, of holiday home buyers and 41% of investment buyers financed less than 70% of the purchase price. The data also shows that 45% holiday homes and 44% of investment homes purchased in 2014 were distressed properties, either… Continue reading
Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows. While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture. Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank. It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research. The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%. Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas. In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore. ‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out. Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index. The biggest rises in residential prices have been seen within a 10 minute walk of Bond Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher… Continue reading
Surveyors reveal the damage caused to Victorian and Edwardian houses in the UK
There are over four million Victorian and Edwardian houses in the UK and many are crying out for some serious care and repair work, according to chartered surveyors. Buildings of Victorian and Edwardian age account for a disproportionately high number of the 'essential repairs' listed in mortgage valuations and survey reports, says the Royal Institution of Chartered Surveyors. One cause of problems arising today can be traced back to the Victorian builders who were not always averse to taking shortcuts and skimping on materials, with the result that ‘inherent defects’ developed in later life. Experienced surveyors will know how to identify common problems like damp, timber decay, and structural movement. But they will also know when not to worry, when apparent defects are not significant, according to a RICS qualified chartered surveyor Ian Rock. He pointed out that large numbers of homes of this era have suffered from a long term lack of maintenance. Worse, many old buildings have been subjected to inappropriate repair work, leading to a loss of valuable original features. ‘In some cases well intentioned repairs have had the effect of exacerbating the problems that they set out to solve. Works such as re-pointing and rendering in modern cement based materials, the use of plastic paints and the retrospective application of unnecessary damp proof treatments can all be detrimental to the health of such buildings, in time leading to accelerated decay and irreparable damage,’ he explained. The most inappropriate works commonly carried out on traditional buildings include replacing original good quality sash windows with inappropriate modern aluminium or PVC-U casements and stripping out original period doors. There is also unnecessarily injecting chemical damp proof courses or injecting them incompetently, and re-plastering or rendering main walls with cement based materials rather than traditional lime, thereby trapping damp in the walls. Damp, rot and beetle infestation is encouraged by blocking ventilation to floors and roofs, and by allowing high ground levels such as flower beds to build up against external walls. Removal of chimney breasts or load bearing internal spine walls without providing adequate support to the remaining masonry above can also cause damage. Others are neglecting badly eroded mortar joints to external masonry, allowing damp to penetrate and frost damage to occur and re-pointing walls with cement mortar that prevents walls from ‘breathing’, and re-pointing in visually dominant ‘show off’ styles such as protruding ‘weather struck’ pointing. RICS also points to botched repairs to flashings to stacks and roofs with short life materials such as self-adhesive tapes or mortar fillets and a failure to provide enhanced structural support to roof structures where original lightweight slate coverings have been replaced with heavier concrete tiles. Damage can also be caused to these old buildings by not lining old flues before lighting fires or using appliances, and failing to cap and ventilate disused flues as well as weakening floor joists with excessive cutting for cable and pipe runs. ‘RICS members have a pivotal role to… Continue reading
