The National Assn of Realtors has released figures that show vacation home sales recovered somewhat in 2009, but investment sales fell off sharply. 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, while investment-home sales fell 15.9 percent to 940,000 in 2009 from 1.12 million in 2008.
NAR Chief Economist Lawrence Yun said, “The typical vacation-home buyer is making a lifestyle choice, with 9 out of 10 saying they intend to use the property for vacations or as a family retreat. Investment buyers primarily seek rental income, with 6 in 10 planning to rent to others, although 1 in 5 wants a family member, friend or relative to use the home.” 26 percent of vacation-home buyers and 8 percent of investment buyers intend to use the property as a primary residence in the future.
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, while half of investment buyers paid cash. Fairly similar ratios for each group indicated portfolio diversification or good investment opportunities were factors in the purchase decision.
The typical US 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. 3 out of 4 were married couples.
Investment-home buyers last year had a median age of 45, earned $87,200, and bought a home that was relatively close to their primary residence – a median distance of 24 miles. Roughly one in four investment buyers purchased more than one property in 2009.
While these statistics are from buyers in the US, the trends can be carried forward to offshore properties. The Baby Boomers are not just an economic factor in the USA. 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.”