Vacation Home Property Sales Surge
The American desire to own a second home as a vacation home is alive and well!
The National Association of Realtors analysis of U.S. Census Bureau data shows there are approximately 8 million vacation homes in the U.S. Their 2014 Investment and Vacation Home Buyers Survey shows vacation home sales improved substantially in 2013.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales:
“Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” he said. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”
Here are the key findings from the report:
- Vacation-Home sales rose 29.7 percent to 717,000 from 553,000 in 2012
- Sales accounted for 13% of all transactions last year, up from 11% in 2012
- The median price was $168,700, compared with $150,000 in 2012, reflecting a greater number of more expensive recreational property sales in 2013
- 42% of vacation homes purchased in 2013 were distressed homes (in foreclosure or short sale)
- The typical vacation-home buyer was 43 years old
- The median household income was $85,600
- Buyers plan to own their recreational property for a median of 6 years
- 33% said they were likely to purchase another vacation home within two years
- 82% of all second-home buyers said it was a good time to buy (compared with 67% of primary residence buyers)
Reasons for Purchasing
Lifestyle factors remain the primary motivation for vacation-home buyers:
- 87% want to use the property for vacations or as a family retreat
- 31% plan to use it as a primary residence in the future
- 28% wanted to diversify their investments or saw a good investment opportunity
- 23% plan to rent to others
- 41% of vacation homes purchased last year were in the South
- 28% in the West
- 18% in the Northeast
- 14% in the Midwest
The vacation homebuyer purchased a property that was a median distance of 180 miles from their primary residence (down from 435 in 2012)
- 46% were within 100 miles
- 34% were more than 500 miles
- 38% of vacation-home buyers paid cash in 2013
- The median down payment was 30%, up from 27% in 2012
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