NAR 2013 Investment And Vacation Home Buyers Survey
Vacation home sales improved in 2012, while investment purchases remained elevated for a second consecutive year, according to the NationalAssociation of Realtors.
Washington –NAR’s 2013 Investment and Vacation Home Buyers Survey, covering existing-and new-home transactions in 2012, shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011. Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011.
Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from 2011, while the portion of investment sales was 24 percent in 2012, down from 27 percent in 2011, marking the second highest share since 2005.
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,” he said.
Yun notes an ongoing investor presence. “Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” he said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
The median investment-home price was $115,000 in 2012, up 15.0 percent from $100,000 in 2011, while the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
Buyers listed many reasons buyers for purchasing a vacation home: 80 percent want to use the property for vacations or as a family retreat, 27 percent plan to use it as a primary residence in the future, 23 percent plan to rent to others and 23 percent wanted to diversify their investments or saw a good investment opportunity.
Fifty-five percent of investment buyers said they purchased for rental income, 30 percent wanted to diversify their investments or saw a good investment opportunity, and 20 percent wanted to use the home for vacations or as a family retreat.
Eleven percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.
Approximately 42.8 million people in the U.S. are ages 50-59 – a group that dominated second-home sales in the middle part of the past decade and established records. An additional 43.1 million people are 40-49 years old, which is the prime age for current buyers, while another 40.1 million are 30-39.
NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 43.7 million investment units in the U.S., compared with 75.2 million owner-occupied homes.
NAR’s 2013 Investment and Vacation Home Buyers Survey, conducted in March 2013, includes answers from 2,326 usable responses about homes purchased during 2012. The survey controlled for age and income, based on information from the larger 2012 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
The full 2013 Investment and Vacation Home Buyers Survey can be ordered online at www.realtor.org/prodser.nsf/Research.