March Roundup: Record New Home Prices; More Free Credit Reports; Hot Second Home Markets; Furnished Second Homes Recommended For Investors
by Broderick Perkins
What Rising Rates? New home sales rose by the greatest margin in four years and prices reached record highs in February. New home purchases rose 9.4 percent to an annualized sales rate of 1.226 million and the median price increased 9.6 percent, the largest February gain since February 1993, according to the Commerce Department. Economists previously predicted new home sales would reach only a 1.15 million annualized sales rate in February after January's 1.106 million annualized pace. The median price for new homes was $230,700 nationwide in February, the department said. The run on new homes was sparked by slightly higher interest rates which remain in the affordable six percent range. More Free Credit Reports On March 1, consumers in 12 Midwestern states joined those in 13 Western states to gain free access, under federal law, to their credit reports. The Midwestern states were Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. The Western states are Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. One free credit report, each year, from each of three credit reporting agencies -- Equifax, Experian and TransUnion -- is among the many provisions of the Fair and Accurate Credit Transactions Act (FACTA), enacted Dec. 4, 2003, to amend the Fair Credit Reporting Act (FCRA). The rollout strategy, designed to prevent overloading the system, moves to the South on June 1, 2005, and finally to Eastern states and U.S. territories by Sept. 1, 2005. Under the new law, credit reports are available online at AnnualCreditReport.com, by phone at (877) 322-8228 or by writing Annual Credit Report Service, P.O.Box 105281, Atlanta, GA 30348-5281. Consumer advocates recommend obtaining your credit report once or twice a year -- more often if you are credit active, say, because you plan to buy a home or refinance your mortgage soon. Top Second Home Spots It wasn't Florida, California, Nevada, or even Arizona that topped EscapeHomes.com's monthly Second Home Market Index; which charts the nation's top ten second home markets. Myrtle Beach, SC at number one and South Padre Island, TX at number two were at the top of the heap, followed by Naples, FL; Holden Beach, NC; Ocean City, NJ; Las Vegas, NV; San Diego, CA; Park City, UT; Orlando, FL and Santa Fe, NM. The results were based on more than 200,000 property searches made on the EscapeHomes web site, during the month of February, 2005. Myrtle Beach actually moved up from the number four spot in January. New to the list in February were Ocean City, NJ; San Diego, CA; and Santa Fe, NM. Investors comprised 62 percent of the Myrtle Beach home seekers, while 18 percent were looking for a vacation home, 15 percent wanted retirement properties, and five percent were planning to relocate, EscapeHomes.com reported. Business Boost: Furnished Second Homes Buying a second home as an investment also means buying a business and more and more often, that means buying a business that's ready to go. Kiplinger Magazine reports that furnished second homes are increasingly common because investors want to hit the ground running without wasting time setting up shop. Appreciation maybe be expected, but cash flow from rental income isn't as guaranteed and investors need to quickly put their property in front of travelers or other renters looking for fully furnished accommodations, Kiplinger reports. Kiplinger's Katy Marquardt reminds sellers that lenders likely won't lump the house and furnishings into the appraised value, but sellers can factor in the price of the furnishings, perhaps unofficially, or as a separate sale. Marquardt says an itemized list of the furnishings is also helpful when calculating depreciation. |
