Sales of Vacation Homes Climbed Last Year
AUSTIN, Texas -- The market for vacation home in 2012 showed continued signs of strength as measured by sales, with a 10% increase in sales from the year before and a 24% increase in the median sales price. This was the first increase in three years.
The primary reason for buying a vacation property last year, cited by 38% of respondents in a survey by the National Association of Realtors, was low real estate prices, which has grown 5% from 2011. Another 28% cited the desire for a family retreat.
The median sales price rose for the first time since 2009, to $150,000 in2012 from $121,300 in 2011, and the median buyer's age was 47, with more buyers younger than 45 entering the market.
The survey also shows that rental income remains a significant reason to buy a vacation home. For 76% of buyers, rental income influenced their decision to buy last year, a 5% increase from 2011, and 92% of vacation home buyers plan to rent their property within the next 12 months to long-term renters, short-term renters or a combination of the two. Approximately 60% of buyers believe they'll earn rental income suffficient to cover at least half of their mortgage payments.
Other vacation home buyers cited these factors as the most important reason to take the plunge into vacation home ownership last year:
- For future retirement, 12%.
- Low mortgage rates, 11%.
- Potential for price appreciation, 7%.
Fully 78% of vacation home buyers believe now is a good time to purchase real estate and 27% say they purchased a vacation home in 2012 to use as a principal residence in the future, typically after retirement. Nearly half (46%) paid cash while slightly more than half took out a mortgage.
Of those buyers intending to rent their properties, about 31% plan to make their vacation homes available for rent between one and eight weeks over the course of the next year; 36% plan to rent their properties between nine and 26 weeks per year; and 33% plan to rent their homes between 27 and 52 weeks per year.
Buyers aren't limiting themselves to proximity to their primary homes when purchasing vacation homes; 46% purchased vacation homes more than 500 miles from their primary residence.
Among survey highlights by the numbers:
- 553,000: Number of vacation homes sold in 2012.
- $150,000: Median sales price of a vacation home in 2012, 24% higher than 2011.
- 46: Percentage of vacation home buyers under age 45, up from 38% in 2011.
- $92,100: Median household income of vacation home buyers.
- 46: Percentage who paid cash for their properties.
- 46: Percentage who plan to own their property more than six years.
- 29: Percentage who say they are very or somewhat likely to buy another property within the next two years.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.