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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:
Raw Numbers
§ 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)
Buyer Profile
§ 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
Location
§ 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
Financing
§ 38% of vacation-home buyers paid cash in 2013
§ The median down payment was 30%, up from 27%
in 2012
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