Vacation Home Sales Up In 2009
Vacation-home sales recovered in 2009 according to the National Association of Realtors.
NAR’s 2010 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2009, shows vacation-home sales rose 7.9 percent to 553,000 last year from 513,000 in 2008. Primary residence sales rose 7.1 percent to 4.04 million in 2009 from 3.77 million in 2008.
NAR Chief Economist Lawrence Yun said, The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat, he said. Investment buyers primarily seek rental income, with six in 10 planning to rent to others, although one in five wants a family member, friend or relative to use the home.
Only one in four vacation-home buyers plan to rent their properties to others, while one in five investment buyers plan to use their homes for vacations or as a family retreat. However, 26 percent of vacation-home buyers and 8 percent of investment buyers intend to use the property as a primary residence in the future.Â The market share of homes purchased vacation-homes rose a percentage point to 10 percent. .
The median transaction price of a vacation home was $169,000 in 2009, compared with $150,000 in 2008. â€œThe higher vacation home price may reflect increased sales in higher priced markets, particularly in areas of Florida and California where prices became highly attractive for buyers over the past year,Yun said.
Half of vacation homes purchased last year were in the South, 21 percent in the West, 17 percent in the Midwest and 12 percent in the Northeast. Seven out of 10 were detached single-family homes.
Similar to 2008, cash factored strongly in the second-home market: three out of 10 vacation-home buyers in 2009 paid cash for their properties. Fairly similar ratios for each group indicated portfolio diversification or good investment opportunities were factors in the purchase decision.
The typical vacation-home buyer in 2009 was 46 years old, had a median household income of $87,500, and purchased a property that was a median distance of 348 miles from their primary residence; 34 percent were within 100 miles and 40 percent were more than 500 miles.
Three out of four second-home buyers were married couples.
Demographically, the long-term demand for second homes looks favorable because large numbers of people are in the prime years for buying a second home. Historically, people become interested in buying a second home in their mid 40s,Yun said.The large number of people who are now in their 30s and 40s will dominate the second-home market in the coming decade with a strong underlying demand, although sales in a given year will vary depending on the economy. Mortgage lending for second homes was extraordinarily tight in 2009 but it is likely to ease a bit in 2010.
Currently, 40.1 million people in the U.S. are ages 50-59 a group that dominated sales in the first part of the past decade and established records for second-home sales. An additional 44.4 million people are now in the primary buying demographic of 40-49 years old, and another 40.6 million are 30-39. Vacation-home buyers plan to keep their property for a median of 16 years while investment buyers plan to hold their property for a median of 12 years.
NAR’s 2010 Investment and Vacation Home Buyers Survey, conducted in March 2009, includes answers from 1,930 usable responses. The survey controlled for age and income, based on information from the larger 2009 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.