More consumers are seeking the relaxation of getting away, as vacation-home sales rose 10.1% to 553,000 in 2012 from 502,000 in 2011, according to data from the National Association of Realtors.
When surveyed, buyers listed a number of reasons for purchasing a vacation home: 80% plan to utilize the property for vacations or family retreats, 27% intend to use it as a primary residence in the future, 23% hope to rent it to others and 23% saw the home as a good investment opportunity.
Conversely, investment-home sales dropped 2.1% to 1.21 million last year from 1.23 million in 2011. However, investment-home sales lingered well under a million during the market downturn, according to NAR.
Vacation-home sales equaled 11% of total transactions in 2012, which remained unchanged from 2011. The portion of investment sales, on the other hand, totaled only 24% in 2012, down from 27% in 2011.
“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,” said NAR Chief Economist Lawrence Yun.
With the buzz of an investor-driven housing recovery going around, Yun agrees that investor presence continues to thrive.
“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,” Yun said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
In 2012, the median investment-home price was $115,000, a 15% jump from $100,000 in 2011. Median vacation-home prices saw an even greater increase, hitting $150,000 compared with $121,300 in 2011. This represents a greater number of more expensive recreational property sales in 2012, NAR notes.
In 2012 the median price for a condo sold in Provincetown was $399K, up 11% from 2011. The median price for a single family home sold was $800K, up 40% from 2011.
Investment-home buyers had a median age of 45, earned $85,700 and purchased a home that was considerably close to their primary residence. Of the investment buyers, 35% purchased more than one property.
“Property flipping modestly increased in in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.”