The U. S. Sunbelt states have a well-known history of attracting large numbers of domestic and international tourists along the U. S. coastline.

Tourists have several available options when it comes to their choice of accommodations, ranging from hotels and motels to the luxury condominiums and resorts.  For families, providing accommodations over a extended vacation, hotels and resort daily rate cost become significant. A growing trend is to choose Short Term Vacation Rentals.

Short Term Vacation Rentals typically offer accommodation by the week or by the month and are generally located in the heart of vacation destinations which have access to local amenities and attractions like the beaches that line the coast of the Carolinas or the Gulf Coast as well as the vacation hot spots like Orlando’s Disneyland Resort or Galveston’s Moody Gardens.

Instead of renting a hotel room for mom and dad, a room for the kids and a room for the grand kids, the extended family rents a three or four bedroom vacation home.  When you do the math for three or four hotel rooms, diners out and add a collection of rental cars, it is easy to see how quickly the costs jump up and how attractive a $3,500 a week vacation home can become.

THE VACATION RENTAL MARKET

The future for Short Term Vacation Rentals is bright. 

The Recent Vacation Rental Management Association (VRMA) has compiled research that confirms that the vacation rental industry is in fact growing and becoming more professional and competitive as more and more products are brought online to provide more and more opportunities for vacationers find that vacation home for the family.

VRMA also reports that the inventory of short term vacation homes that are being offered for rent is increasing every year.  As more second homes are purchased, more short term leasing opportunities are being created.  Obviously a second home owner will not want to enter into a long term lease, so their only opportunity to benefit from owning a second home is to rent it for a short period of time.

There is data confirming the fact that more and more of the second homes are being purchased for use by homeowners and that these homes are also being rented out or used as investments.

As a result, there is a growing market of second homeowners that are seeking out properties that have quality vacation rental management firms that can provide rental services and property management in place.

When you research the second home and the Short Term Vacation home industry, it is pretty easy to confirm this trend.  Almost all of the data you will find will confirm that the inventory of short term rental homes is continuing to rise in many of the destination vacation real estate markets where second homes are being purchased.

VRMA also reports that the income from vacation rental operations is continuing to rise as the Short Term Vacation Property become a more recognized and sought after alternative.

MANAGED OWNERSHIP SOLUTION

Owning a well located, professionally managed, short term furnished vacation property provides an excellent opportunity for Canadians to enter into the US Real Estate market.  The fact that the lease term is short and that the stay is being compared to hotels and resorts increases rents to a point where properties can break even when they are only rented out half a year or so.

This is the ideal situation for a Canadian that would like to rent out their property in the summer in the high season and vacation down south in the winter avoiding the sleet and snow of our winters.  They will quite often be able to manage a scenario where they will be able to stay for a few months for free.

Central Showplace is featuring buying opportunities of short-term rental properties of two, three and four bedroom furnished condominiums and homes that are located in the heart of tourist hotspots and that are ideally suited for families who want to vacation together. 

Harold Green

Central Showplace

Sarasota Association of REALTORS Press Release:

*The following press release was sent to local media on April 16

The Sarasota real estate market saw sales rise to the highest level of the year in March 2009, besting the previous month by 33 percent. In addition, the median sales price for single family homes rose after steadily declining since late last year, indicating a potential sign of the bottoming of the local market.

The overall sales level of 481 was the highest since June 2008, and nearly equaled the level of 504 sales reported in March 2008. Of those sales, 353 were single family homes while 128 were condominiums.

The good news also extended to pending sales, which once again rose in March 2009 to 817. The last time pending sales climbed over 800 was in March 2006, when pending sales also were reported at 817. The total of 817 was 21 percent higher than the 679 pending sales reported in March 2008.

According to statistics from the Mid-Florida Regional MLS for members of the Sarasota Association of Realtors®, 645 single family homes and 175 condominiums went under contract in March 2009, compared to only 471 homes and 208 condos in March 2008.

Pending sales have now exceeded the 500 level for the 15th consecutive month, and the statistic bodes well for the next two or three months, when many of these pendings will become closed sales. Pending sales reflect contracts executed by buyers and sellers during the month. The report continues to reflect a steady, strong pattern, and indicates buyers are more active in the Sarasota market even in the face of difficult economic times.

“We believe the current climate of historically low interest rates, major incentives for first-time homebuyers, and the many other government programs designed to stabilize the economy and the housing industry is all having a very positive impact,” said 2009 SAR President Bill Geller. “Every downturn is followed by an upturn - we know this to be true historically. We’ve been through a difficult time in the real estate industry, and hopefully we are seeing the beginnings of a new, dynamic era.”

The recently enacted first-time homebuyers’ tax credit of $8,000 will likely continue to boost sales this year, Geller said. Those who meet eligibility requirements and purchase a home this year prior to Dec. 1 are eligible for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid.

The median sale price for single family homes rose to $152,125 in March 2009 from $142,000 in February 2009 - a 7 percent increase. The median sales price for condominiums fell to $166,750 in March 2009 from $198,000 in February 2009, for a 15 percent drop.

The median price of all single family homes sold in the last 12 months was $217,000, compared to a median of $299,900 for the 12 months ending in March 2008. For condominiums sold in the last 12 months, the median sales price was $256,000, compared to last year’s figure of $295,000.

Another important market tracker - the absorption rate of properties on the market - continues to track lower than last year at this time for both single family homes and condominiums, as inventories have declined. Absorption rate is the number of months it would take to sell the entire remaining listed inventory in a particular category, based upon the sales for that particular month.

For March 2009, the absorption rate for single family homes stood at 17.1 months, compared to 24.1 months the previous month and 25.1 months in March 2008. For condominiums, the absorption rate was at 21.2 months, lower than the 28.5 months in the previous month, and much lower than the 34.1 months reported in March 2008.

*A 12-month rolling median price is not as susceptible to the volatility that can occur within any particular month, which sometimes results in drastic statistical swings up or down from one month to the next.

Download the full report

A U.S. real estate investment expo held in Beijing, China April 10th - 12th had a great turn out as Chinese buyers took advantage of the discounted U.S. real estate. The Chinese economy is far less affected by the current crisis compared to the U.S. combined with the high savings rate of Chinese households, puts the Chinese buyers in a great investment position. Chinese buyers flocked to the expo to finds ways to take advantage of the situation and buy discounted U.S. real estate.

Exhibitors showcases new developments from all over the U.S. as well as discounted resale and government auction solutions. Central Showplace interviewed buyers show particularly strong interest in Florida and Texas. One Texas developer used China’s own Yao Ming to draw crowds of attention and making front page of a local newspaper.

The three-day event concentrated on investment potential of U.S. real estate. Despite the strong Chinese economy buyers were interested in diversifying investments. While other were drawn by the investment U.S. green card opportunities available though the EB5 program. Investors say this is a great time to participate in an investment immigration U.S. green card because the underlying property is so heavily discounted.

More images from the China-USA real estate expo visit our photo gallery

The frenzy is consistent with comments by Lawrence Yun, National Association of Realtors chief economist, “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”

Many analysts believe that the U.S. government plans are starting to turn around the U.S. real estate market. “Over time, lower mortgage rates should help to improve conditions in the housing market, whose persistent weakness has had a major impact on economic and financial conditions more broadly,” Bernake said.

Forecast by the mortgage bankers’ group raised its 2009 home-loan originations by $800 billion to $2.78 trillion last month. Refinancing will increase to $1.96 trillion in 2009 and purchase originations will total $821 billion. This is evidenced by a surge of refinancing and low interest rates sent homeowners to apply for new loans.

For foreign investors the interest shown by the Chinese buyers is definitely a sign that this is the right time to take advantage of the U.S. real estate discounts.

More images from the China-USA real estate expo visit our photo gallery

Pulte Homes Inc. is buying Centex Corp. for $1.3 billion in stock in a deal that will create the largest U.S. homebuilder. This will give Pulte a large holding of land in Texas and the Carolinas, two of the most resilient real estate markets, and a presence in 29 states.

This purchase supports the buzz that the housing recovery is right around the corner. After a rise in existing and new home sales in February, and a increase in mortgage applications for actual home purchases, the sentiment is clearly improving.

This positions Pulte to be the leading survivor company amongst the big homebuilders in the U.S. Despite the fact that they are taking on Centex’s less healthy balance sheet, this still leaves Pulte with well over three billion dollars in cash.

“We’re not here to necessarily call a bottom of the industry. We do think we’re close to that, and we think this combination provides an accelerated return to profitability which frankly is very important as public companies to return to profitability for our shareholders.” Said Richard Dugas, Pulte’s CEO.

Palm Beach County home prices continued to fall in February, but sales spiked as bargain hunters snapped up foreclosures and short sales, the Florida Association of Realtors.

The median price of a single-family home in Palm Beach County was $228,100, down 34 percent from a year ago. However, 532 homes sold during the month, up 33 percent from a year ago.

Buyers are targeting lower-priced homes that sell for far less than they fetched in 2005 and 2006. “Bargain properties are selling, but expensive Palm Beach County’s homes attract few buyers”, said Steven Presson, an agent at Corcoran Group Real Estate in Palm Beach.

President Barack Obama said he is “very confident” the administration’s plan to purchase toxic assets from banks will unlock credit markets and that there already are signs of a thaw in the housing market. “This is one more element that is going to be absolutely critical in getting credit flowing again,” said the president and added the plan’s primary purpose is “stabilizing the financial system so that banks are lending again, the secondary markets are working again.”

Geithner announced a public-private partnership plan to purchase as much as $1 trillion in devalued real-estate assets and other securities, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds.

Market Response

Investors gave a overwhelming endorsement to the initiative as bank shares rose, led by Citigroup Inc. and Bank of America Corp., after the Treasury announcement.

The Dow, up 241 at 8017 in the past week, was up 21 percent in the past four weeks, its best move of that duration since May, 1933. It was also the Dow’s first close above 8,000 in two months. The S&P 500 rose 26 points, or 3.3 percent for the week, to 842. The Nasdaq rose 76 points, or 5 percent to 1621.

Investors last week poured money into the financials, which were best performers with a 6.4 percent gains, but they also bought consumer discretionary stocks, which gained 6.3 percent. Defensive issues were the worst performers, with health care down 1.6 percent and consumer staples down a slight 0.1 percent.

Real Estate markets follow the reponse?

The enthusiasm in the stock market seems to have begun spilling over to real estate. Real estate stocks have also seen significant gains over the pass weeks, as investors are betting on a real estate turn around.

“Prices are so low, we’re starting to see that,” says Marc Savitt, a realtor there for a quarter of a century. “In our area, you’re at the bottom.”

Savitt, is the president of the National Association Of Mortgage Brokers, and may seem a little overly optimistic. But he is hardly alone in sensing a long-awaited bottom in the real estate market.

The National Association of Realtors reports that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million during February 2009, from 4.49 million units in January.

It was the largest monthly sales jump since July 2003, first-time buyers accounted for about half of all transactions. The median price of existing homes in the West was $204,600 in February, 5.1 percent below January and 30.3 percent below the February 2008 figure.

Lawrence Yun, the National Association of Realtor’s chief economist, said first-time buyers accounted for half of all U.S. home sales in February, especially in the lower price ranges.

“Because entry-level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he said in a statement. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

“If January was a disaster for housing, February may be the rebound month,” wrote Joel Naroff, president of Naroff Economic Advisors. The sales figures don’t yet reflect the new $8,000 tax credit designed to lure even more first-time buyers into the market, should help early summer sales, but how much will depend on the overall condition of the U.S. economy.

U.S. Federal Reserve Chairman Ben S. Bernanke is delivering record low mortgage rates and a refinancing boom that’s putting cash in home owners pockets and helping to stabilize house prices.

Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78 percent, Freddie Mac said yesterday in a statement. The rates are the lowest in records dating back to 1971. This has helped mortgage applications in the U.S. rise for the fourth straight week as a decline in borrowing costs spurred homeowners to refinance, and new home sales rose in February. The Fed’s effort to bring down fixed rates may give consumers as much as $25 billion, said Mark Zandi, chief economist of Moody’s Economy.com.

Cheaper Home Prices

Cheaper financing may also help to turnaround the housing market. Sales of previously owned homes rose 5.1 percent to 4.72 million at an annualized pace in February from the prior month as low mortgage rates spurred demand. The National Association of Realtors affordability index rose to a record in January, due to lower home values and mortgage rates. NAR said in a March 23 report, the median U.S. home price fell to $165,400, down 28 percent from its 2006 high.

Bernanke cited lower mortgage rates in testimony in February as evidence that Fed policies were working. He said the decline in financing costs caused by the central bank’s purchases of mortgage-backed securities this would help ease the financial strain on homeowners.

Improving U.S. Housing Market

“Over time, lower mortgage rates should help to improve conditions in the housing market, whose persistent weakness has had a major impact on economic and financial conditions more broadly,” Bernake said.

Forecast by the mortgage bankers’ group raised its 2009 home-loan originations by $800 billion to $2.78 trillion last month. Refinancing will increase to $1.96 trillion in 2009 and purchase originations will total $821 billion. This is evidenced by a surge of refinancing and low interest rates sent homeowners to apply for new loans.

“We have seen evidence that home sales are bottoming,” said Jim O’Sullivan, senior economist with UBS Securities LLC, in Stamford, Connecticut. “This should be positive.”

ORLANDO, Fla., March 23, 2009 /PRNewswire via COMTEX/ —-Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors. February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.

Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.

Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors(R: 31.39, -0.18, -0.57%) (NAR: undefined, undefined, undefined%) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.

Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”

NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.

In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.

Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in February 2009 to February 2008 based on Realtor transactions; the other compares the volume of existing, condominium sales and median sales prices in February 2009 to February 2008 based on Realtor transactions.

The Florida Association of Realtors, the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 125,000 members in 67 boards/associations.

SOURCE Florida Association of Realtors

While clearly no one has a crystal ball with definitive answers there does seem to be some general focus around:

1)   The market will hit bottom when the psychology of homebuyers becomes positive, optimism improves, and people are willing to stick their necks out again.  While some areas such as New York are on a decline, clearing other harder hit areas show signs of optimism as Florida’s existing Home, Condo sales rose in February 2009 and other indications that March figures may reflect the same.

2)   The market will hit bottom when employment turns around. While unemployment is clearly still a big problem the pace as definitely slowed.

3)   The market will hit bottom when credit loosens and businesses can borrow for working capital, expansion, and long term plans. This is clearly an issue between banks protecting there capital during uncertain times mixed with capitalization issues with many of the major banks. All indications are this is yet to be resolved.

4)   The market will hit bottom when the stock market turns around and consumers see a positive trend. While many believe the current market rally in March and April may not last, most analyst agree we are in the mist of a bottoming process and many indicators show that Americans are optimistic that despite corrections that may occur in this rally, that the market will generally have a positive grown over the course of the year.

5)   Finally, the market will hit bottom when government stimulus programs begins to work. This will bring back consumer confidence, which will then reduce unemployment, re-capitalize the banks, loosen credit, and bring the stock market back.

It is obvious that all of these problems are interrelated and feed upon each other. But they are all symptoms - the outward manifestations of the problems - and not the causes or the cures. What is scary is the speed at which these symptoms appear to turn around in the pass month once people seem to have developed a sense of optimism in the market.

It seems many buyers are not waiting to find out when the real estate market will hit bottom and have begun buying.