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 7.9 million vacation homes in the U.S. Their 2013 Investment and Vacation Home Buyers Survey shows vacation home sales improved in 2012.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales:
“We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw.”
Here are the key findings from the report:
Raw Numbers
- Vacation-Home sales rose 10.1 percent to 553,000 from 502,000 in 2011
- Sales accounted for 11% of all transactions last year, unchanged from 2011
- The median price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012
- 35% of vacation homes purchased in 2012 were distressed homes
Buyer Profile
- The typical vacation-home buyer was 47 years old
- The median household income was $92,100
- Buyers plan to own their recreational property for a median of 10 years
- 29% said they were likely to purchase another vacation home within two years
- 78% of all second-home buyers said it was a good time to buy (compared with 68% of primary residence buyers)
Reasons for Purchasing
Lifestyle factors remain the primary motivation for vacation-home buyers:
- 80% want to use the property for vacations or as a family retreat
- 27% plan to use it as a primary residence in the future
- 23% plan to rent to others
- 23% wanted to diversify their investments or saw a good investment opportunity
Location
- 45% of vacation homes purchased last year were in the South
- 25% in the West
- 17% in the Northeast
- 12% in the Midwest
The vacation home buyer purchased a property that was a median distance of 435 miles from their primary residence
- 34% were within 100 miles
- 46% were more than 500 miles
Financing
- 46% of vacation-home buyers paid cash in 2012
- The median down payment was 27%, the same as in 2011
Tomorrow, we will cover the findings on investment properties.
