With a jump in sales of nearly 30 percent nationwide, vacation homes are changing hands at a healthy rate, says the National Association of Realtors.
Sales jumped to an estimated 717,000 last year from 553,000 in 2012, according to the association’s newest report on vacation and investment properties that was released this morning.
On the other hand, the national association says that investment home sales fell 8.5 percent to 1.10 million in 2013 from 1.21 million in 2012. Owner-occupied purchases rose 13.1 percent to 3.70 million last year from 3.27 million in 2012.
Shown above is a particularly enticing Putnam County home that is an example of a perfect vacation or weekend home. At 14 Par Court in Kent within the Sedgewood Club, it has its own swimming pool and use of community golf, tennis and boating. The house is marketed at $2,950,000 and had been rented by a hip-hop star Damon Dash.
And there are signs that the vacation home market will continue to be strong.
“Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” NAR Chief Economist Lawrence Yun said in a press release. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”
Vacation-home sales accounted for 13 percent of all transactions last year, their highest market share since 2006, while the portion of investment sales fell to 20 percent in 2013 from 24 percent in 2012.
And Yun noted that many of these vacation homes are concluded in all-cash purchases.
Of buyers who financed their purchase with a mortgage, large down payments continued to be the norm in 2013.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
The typical vacation-home buyer was 43 years old, had a median household income of $85,600 and purchased a property that was a median distance of 180 miles from his or her primary residence; 46 percent of vacation homes were within 100 miles and 34 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 6 years, down from 10 years in 2012.
Here is the regional breakdown of where vacation homes were purchased last year: Forty-one percent in the South, 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest.
The U.S. Census Bureau data shows there are 8 million vacation homes and 43.7 million investment units in the U.S., compared with 74.7 million owner-occupied homes.