Vacation Home Buying Fizzling. RV's too?

[harryjr]

How many think this article from the Washington Post could be reprinted substituting "RV's and Boats" for "Vacation Homes"? Those monthly payments are going to start looking ugly when you're finding it hard to pay for gas and food.

https://www.washingtonpost.com/business/2022/05/04/pandemics-vacation-home-buying-frenzy-beginning-fizzle/

[way2roll]

Hot spots will always be hot spots and are relatively immune to rate increases. Those with cash and liquid enough to purchase high end vacation homes usually don't sweat a half a percent on rates if they carry loans at all. Many are taking advantage of the seller's market and selling homes, pocketing cash and holding out as long as they can until capital gains forces them to take the hit or reinvest in real estate. I think rate increases affect common, not vacation spot, home buyers. Those buying vacation homes aren't in that pool. Again, didn't read the article because I couldn't access it but I don't know that vacation hot spots have ever fizzled. To that point - if folks start having a fire sale in a year due to over extension, those with cash swoop in and pick them up. Continuing the pace of the the hot market.

In short, I disagree with the claim that vacation home buying is fizzling. Shame I can't read the data that supports this claim, but I live in an area like that, and it's sizzling, not fizzling.

[valhalla360]

Keep in mind, stuff you saw 2-3 months ago may no longer be valid. Yesterday was only the 2nd bump in interest rates and it hasn't had a chance to take effect. In fact, it may be causing people to finalize deals quickly before it does.

These luxury markets won't disappear entirely but don't be surprised if there is a big slow down. Some of this may take a few months to work thru the system.

Cash buyers are a limited portion of the market. Over the last couple years, they have been buoyed by govt handouts and a surging stock market. As those sources of cash dry up, there likely will be fewer cash buyers.

The biggest unknown is the boomer generation. They are retiring at near peak rate but many bumped that up over the last couple years and that often comes with plans for buying their retirement dream. So the question is, did the last 2 yrs clear out many of this years and next years potential retirees (and the big purchases) or will there still be enough retiring to keep the luxury markets going.

[valhalla360]

cptqueeg wrote:

valhalla360 wrote:
Following a particular model of boat and I've noticed some more realistic prices coming out in the last couple months

I'm not sure prices will crater but I wouldn't be surprised if things settle down to more realistic levels.

Trucks might hold out a bit longer simply due to the supply shortage and the fact they are used for other purposes.

I know where you can get a nice super yacht for 1/2 off so $350 million.

It's only got one spot for a helicopter so it might not meet your needs, however. You might have to send your helicopter to pick up your guests.

Just need to drop a few zeros. The ones I'm looking at are in the $30-50k range.

[RetiredRealtorR]

Well, I can tell you one place where vacation home buying is far from fizzling. Vacation homes are selling at a record pace here, most of them hit the MLS and are under contract within 24 - 36 hours, at sky-high prices, usually closing at a figure well above the listing price.

Personally I see some of the air being let out of this balloon, eventually, but for now it's full steam ahead, and there are plenty of cash buyers that are paying way too much for properties.

Now is definitely the time to sell, and NOT the time to buy. :C

[JoeH]

way2roll wrote:
Technically can't access or read the article - either link. But I can tell you I live in a resort area on the coast and homes don't stay on the market for more than a few days. And all of them are multi bids way over asking price. 2 houses in our neighborhood just sold in under a day and the numbers are about $200-300k over what the owners paid 2 years ago. Rentals are the same way.

Same in Fl.... houses in our neighborhood are typically sold first day or 2 at way over listing price and way over past sales price. A number of them are going to investors who set them up as AirBNB.

[John_Joey]

It won’t be too much longer people won’t feel so rich. The bottom 2/3rds are already there.

Good thing about living a long life, you can see the bullet coming.

[dodge_guy]

Yep! Noticing a lot more RVs up for sale. It was only a matter of time.

[Wade44]

wapiticountry wrote:
The vast majority are cash sales. The number of people who don’t bat an eye over a multi million dollar purchase are staggering.

So what is the number of those folks as a percentage of the US population? 0.01%? I am in fairly decent shape financially, but I am certain it's not a good time to drop a million cash on a slopeside 900 SF Condo in Loseyourass CO or somewhere as an investment LOL.

I sat in for one of my people last Friday 4-29 who was on Vaca, and hauled a semi load of cattle to the auction in PA from OH. When I passed a truck stop off of I-80 in the morning road fuel was $5.36. On the return trip 5 hours later it was $6.09. One year ago it was south of $4.00 at the same stop IIRC. This is not going to end well once these prices cycle through since just about everything you buy is on a truck at some point.

"I doubt there will be lines of sales on the courthouse steps any time soon."

You may be correct but folks jumping out windows may be a possibility.

I do not see how RV sales can not fizzle, two years ago the MSRP on the TT below, which is a run of the mill trailer which would be purchased by the average camper/RV'r in this country with average means was @ $40K +/-, it's now closer to $60K.

[wapiticountry]

bgum wrote:
At some point in the not too distant future I see a rash of short sales. A half point raise in interest will grow to a 3% raise as the economy cools. But I feel there won't be as many bargains as in the past.

I live in an area with a huge population of luxury second (and third, forth, fifth etc.) homes. The vast majority are cash sales. The number of people who don’t bat an eye over a multi million dollar purchase are staggering. Plus, anyone who has financed a home in the past decade.or so has a great fixed rate mortgage. They have locked in the payment and an increase in current mortgage rates won’t effect them at all. Finally there is a severe shortage of single family homes. Days on the market for listed homes are still at near record lows. I doubt there will be lines of sales on the courthouse steps any time soon.

[cptqueeg]

valhalla360 wrote:
Following a particular model of boat and I've noticed some more realistic prices coming out in the last couple months

I'm not sure prices will crater but I wouldn't be surprised if things settle down to more realistic levels.

Trucks might hold out a bit longer simply due to the supply shortage and the fact they are used for other purposes.

I know where you can get a nice super yacht for 1/2 off so $350 million.

It's only got one spot for a helicopter so it might not meet your needs, however. You might have to send your helicopter to pick up your guests.

[bgum]

At some point in the not too distant future I see a rash of short sales. A half point raise in interest will grow to a 3% raise as the economy cools. But I feel there won't be as many bargains as in the past.

[way2roll]

Technically can't access or read the article - either link. But I can tell you I live in a resort area on the coast and homes don't stay on the market for more than a few days. And all of them are multi bids way over asking price. 2 houses in our neighborhood just sold in under a day and the numbers are about $200-300k over what the owners paid 2 years ago. Rentals are the same way.

[cptqueeg]

harryjr wrote:

RedRollingRoadblock wrote:
WaPo is behind a paywall.

Try this one: https://www.theday.com/business/20220504/pandemics-vacation-home-buying-frenzy-beginning-to-fizzle

This article fails to consider the lack of availability of homes/2nd homes. You can't buy what is not available.

[Crowe]

With a 1/2% increase in interest rates you will see a decrease in large expenditures overall.

[valhalla360]

Following a particular model of boat and I've noticed some more realistic prices coming out in the last couple months

I'm not sure prices will crater but I wouldn't be surprised if things settle down to more realistic levels.

Trucks might hold out a bit longer simply due to the supply shortage and the fact they are used for other purposes.