WASHINGTON DC – People of the right age, with available extra income, who discovered right-priced properties were the forces behind improving sales of vacation homes and recreational real estate during 2012, the National Association of Realtors (NAR) reported last week (April 2, 2013).
The NAR said its 2013 Investment and Vacation Home Buyers Survey showed vacation-home sales rose 10.1 percent last year to 553,000, from 502,000 in 2011. Vacation-home sales accounted for 11 percent of all real estate transactions last year, unchanged from 2011. And the trend may continue, according to association Chief Economist Lawrence Yun, who said favorable conditions were still 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,” Yun said.
The median vacation-home price was $150,000, compared with $121,300 in 2011. That reflected what the NAR reported was “a greater number of more expensive recreational property sales in 2012.” All-cash purchases remain common in the recreation market: 46 percent of vacation-home buyers paid cash in 2012. Thirty-five percent of vacation homes were considered distressed properties.
Who was active in the market? The NAR survey reported the typical vacation-home buyers were 47 years old, and had a median household income of $92,100. They purchased property that was a median distance of 435 miles from their primary residence, although 34 percent of vacation homes were within 100 miles and 46 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.
Lifestyle factors remain the primary motivation for vacation-home buyers, the NAR said. Among reasons buyers listed for purchasing a vacation home, 80 percent wanted to use the property for vacations or as a family retreat, 27 percent planned to use it as a primary residence in the future, 23 percent expected to rent to others, and 23 percent considered it a good investment opportunity.
The survey was conducted in March 2013.