OBX Blue Associate Broker Interviewed by Foreclosure News Report

Congratulations to Outer Banks Blue Associate Broker Catherine Brown Strachan who was recently interviewed by the editors of “Foreclosure News Report” on the subject of “Vacation home Investors Flourishing in today’s Frugal Economy.” Excerpts of the Report, dated March, 2010 is as follows:

With the U.S. Housing Market struggling and recessionary fears lingering, one slice of the real estate industry is presenting great opportunities for investors: the vacation rental market. From the Sun Belt to the ski slopes, there are plenty of distressed seaside chalets and mountain dwellings waiting for buyers.

Entrepreneurs say they see pockets of opportunity for profit over the next few years for those who invest wisely in vacation homes as investment properties. “This is a great business,” said Caesar Guyot, a California mortgage broker and real estate investor. “People are being more frugal with their money now. Instead of renting a hotel room, vacationers are becoming part of the local fabric by renting a vacation home.”

Last year, 16 million adult Americans rented a vacation home, condo or villa and 29 percent of those travelers reserved it online, according to Forrester Research in Cambridge, Mass. And the online rental segment is expected to grow.

To be competitive in the vacation home market, amenities are more important than ever, according to vacation home expert Christine Karpinski, author of books on the subject, and director of the owner community at vacation home rental website HomeAway.com. “The average vacation rental generates $30,000 to $35,000 in annual income,” said Karpinski, a serial vacation homeowner who started buying vacation rental properties in 1996, purchasing a condo in Destin, Fla. “HomeAway has more listings in Destin than any other market in the United States. It’s the number one vacation destination on our website.”

Homeaway lists over 430,000 paid listings on several websites, including VRBO.com and CyberRentals.com.

In Florida’s Panhandle, the powdery sugar-white sands and clear, warm, blue-green waters of the Gulf of Mexico between Pensacola and Panama City Beach lures thousands of vacation home buyers every year. This part of Florida’s Emerald Coast draws a wide range of part-time residents, including many from southern states, but also from the Midwest, Canada and California. Vacation homebuyers and investors have started to deplete the inventory of bank-owned properties in northwest Florida, according to Thomas Williams, broker and chief operating officer at Pelican Real Estate in Panama City Beach, Fla., one of the largest locally owned real estate companies in the region. “Our condo inventory has shrunk by half,” said Williams. “This area is booming. The average hold time is less than three weeks for REO’s sometimes it’s less than three hours. If the property is on 30-A, as fast as it hits the market, it’s gone.” Highway 30-a is a scenic 20-mile beachfront stretch of upscale developments like Seaside, a New Urbanist community known for its pastel-colored houses set behind white picket fences on immaculate brick-paved streets. Williams said vacation buyers can purchase luxury rentals along this stretch that command premium prices year round.

The average summer rental rate is $4,000 a week at Outer Banks Blue Realty Services of Kitty Hawk, N.C., says Catherine Strachan, a broker whose company manages 200 vacation-home rentals. “Our season is from Memorial Day to Labor Day and draws Northeasterners from New York, New Jersey, Delaware, Maryland, Pennsylvania, and Virginia,” said Strachan. “This is an awesome market. Regardless of market conditions there is always a demand for rentals.”

According to Strachan, prices in the region are down from the height of the sales levels of 2000. She advises buyers to generate at least 10% gross rental income, which is arrived by dividing the purchase price by gross annual rents. She said the upper part of the region, from the northern towns of Corolla and Duck, are ideal vacation rental markets. Another factor that makes the outer Banks a desirable vacation rental investment spot is that there are fewer condominiums in the region and the market is dominated by single family homes.

Experts say many vacation destinations are experiencing the dare before the dawn and there is going to be a short window of opportunity for smart investors to jump in and make their future fortunes. For the first time in years, home prices have slipped enough in some regions for the math to work, including the Outer Banks of North Carolina. Karpinski said “This is a perfect time to buy a vacation home,” she said, nothing that prices are at 2002 levels in some vacation destinations. “In a few years prices will rise and you will kick yourself for not buying now.”

For more information on bank-owned, short sale, or any other Outer Banks property for sale, please be sure to contact Catherine or Donna or Charlie in Outer Banks Blue’s sales department. They can be reached at 866-976-9619 or via e-mail catherine@outerbanksblue.com, donna@outerbanksblue.com, or Charlie@outerbanksblue.com

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OBX Blue Associate Broker Interviewed by Foreclosure News Report

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