There’s no doubt that the economic crisis facing many countries has taken its toll on the housing market. Residential home sales are at a 50-year low. The number of winter home purchases is even worse. Too many people are finding themselves in financial trouble due to job loss, overextended credit cards or stock crashes. The number of foreclosures is at a 70-year high in the United States alone. Jobs are at a minimum, while job seekers are lining up for interviews for even the simplest of jobs. The housing market isn’t likely to show an increase in sales until the economy begins to show promise.

In Florida alone, the housing market has seen a drastic negative impact over the last few years. In 2005 home sales increased by 23 to 27 percent across the board. All counties reported at least minor increases in home sales. Only three years later, in the first half of 2008, Florida reported a 54 percent decline in home sales over the previous year. The first quarter of 2009 saw a 30 percent decline in sales as compared to last year’s totals. If the first quarter is the first building block, it offers a bleak outlook for the remainder of the year.

Over in Europe in February, the Balearic Islands reported a lower unemployment rate than other Spanish regions. The Balearics are a major hot spot for vacation properties and winter homes. Millions of people take holidays in Majorca, Ibiza and Menorca every yeat. Forecasters project between 0.2 and 0.5 percent economic growth in the Balearic Islands for 2009. While this doesn’t seem like a lot of economic growth, it overshadows the negative impacts of the economy in other parts of the world.

Buying a Vacation or Winter Home
What do Florida and the Balearic Islands have in common? Besides fun, sun and sand they share commonalities in vacation properties and winter homes.
In the United States and Canada, many elderly retire to Florida or buy a winter home there. Northern winters can be brutal for elderly people with limited income to heat their home. The current economic situation makes it even more difficult for those living on a fixed income to afford to purchase a winter home or to travel the distance if they do own one.

Like Americans and Canadians buy winter homes in Florida, Europeans often purchase winter homes on the Balearic Islands or the Canary Islands. In the Balearics, Majorca is the most popular residential island, with Menorca and Ibiza following close behind, with plenty of airlines who have Menorca flights on offer.

The most popular residential island of the Canaries is Lanzarote with Fuerteventura a close second. Low cost airfares makes it a little more convenient for Europeans living on a fixed income, but money is still an issue world-wide.

The Balearic Islands, Canary Islands, Florida and other locations that are considered “vacation hot spots” are ideal places to buy investment property. Why? It’s simple, people cherish their yearly vacation. Several recent polls have shown that even in a poor economic situation, consumers would cut back on unnecessary items to afford one vacation per year. Intelligent investors who purchased investment property in a hot spot have the opportunity to make a lucrative income but still offer great deals on accommodation for others.

Tags: buying home, credit cards, economic crisis, florida, holiday home, home sales, housing market, Islands, residential, stock crashes