Cotton Report Survey Reveals an Increase in Demand for Real Estate, especially for Vacation Homes. By Lindsay Gabrielski, Associate Web Editor
The recent findings of the third annual cotton report indicate that a return of consumer confidence is awakening the real estate market after several years of stalemate. The cotton report polls over 800 participants, from a number of states as well as Canada, Europe and Latin America on housing preferences, price levels, etc. in order to reveal real estate market trends. This yearÂ’s cotton report shows positive changes in consumer confidence and buyer mentality, which will hopefully encourage growth in the real estate market for the remainder of the year.
According to the results of the survey, buyers are far more confident about purchasing a home or entering the market than they were in 2009. In 2009, respondents specify a need for a 50% reduction in prices in order to re-enter the market, this year the median response was a 20% reduction. The number of consumerÂ’s looking to purchase a home within six months also increased from 4% to 25%. These responses indicate that housing prices are adjusting to meet consumer expectations. This adjustment represents a movement of prices toward an equilibrium level, bringing buyers and sellers together and ideally allowing the real estate market to function at its full potential. Evidence of this equilibrium is also present in the poll for reasons for staying out of the real estate market. Those who cited Â“canÂ’t sell my homeÂ” dropped 40% from 2010 and those who cited Â“waiting for better pricingÂ” dropped 41%. This indicates the sellers are seeing demand return to the market and that buyers are seeing realistic price levels. As the real estate market becomes less volatile the environment for putting a house on the market becomes far more appealing and potential buyers are more willing to enter the market.
One especially exciting finding for OceanHome readers reveals an ample increase in the number of homebuyers in the market for a vacation home. The cotton report shows a remarkable 36% of those considering real estate purchases were seeking vacation homes, versus only 4% in 2010. (See Fig. 1.) An increase in the number of buyers who cited geographic relocation as their reason for moving also supports this trend. Perhaps it was an a number of people reading OceanHome Magazine acting on their desire for oceanfront living, or just the harsh winter, but the Vacation Home Market is certainly experiencing a rebound in popularity!
It will take time to see the long term effects of these positive trends on the market, but for now the findings of the cotton report support continued improvement in the real estate market– especially for vacation homes!