Just the word “weekend” is wonderful. It conjures up a whole list of possibilities other than work. Sleeping in for some, others rise early getting into their favorite hobby at the crack of dawn. Staying up late with friends and family. Kicking back. Add “Get Away” and it gets even better. Owning the place for your weekend getaway is sweet. Now is a great time to consider getting a place "up north".
Second-Home Sales Accounted For One-Third of Transactions in 2007. One out of every three homes in the United States today was bought as a second home. We're in the midst of a second-home ownership boom, fueled by such factors as the shrinking American family, older and wealthier households, and new technologies for working from home.
And now you're thinking about taking the plunge. Maybe you're looking for an alternative to other investments and will rent or resell the house. Or maybe a cabin by your favorite lake or river is calling to you. And if you're thinking ahead toward retirement, you may want to find a manageable, well-located home now.
The combined total of vacation- and investment-home sales declined with the overall market in 2007, but still accounted for 33 percent of all existing- and new-home sales, which is close to historic norms, according to the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said the findings suggest different cycles for each of the sectors over the past two years. “Investment-home sales declined sharply in 2006 as speculators disappeared, leaving the market to serious buyers, with the pattern continuing in 2007,” he said. “Vacation-home sales rose to a new record in 2006 because there was a pent-up demand from buyers who couldn’t find a property as a result of tight supplies in preceding years.”
Yun said lifestyle factors and strong demographics remain positive for the vacation home market. “Investment considerations are secondary for vacation-home buyers, so there is some dormant underlying demand,” he said. “A peak of population is moving through the prime years for buying recreational property. It is welcoming to see investment sales returning to pre-boom sales activity.”
Curious About Your Fellow Second-Home Buyers? NAR’s 2007 Investment and Vacation Home Buyers Survey revealed the following information:
The median price of a vacation home was $195,000 in 2007, down 2.5 percent from $200,000 in 2006.
Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent condos, 7 percent townhouses or rowhouses, and 5 percent other.
Sixty-five percent of vacation home buyers and 71 percent of investment home buyers purchased existing homes, while the remainder purchased new homes.
The typical vacation-home buyer in 2007 was 46 years old, had a median household income of $99,100, and purchased a property that was a median of 287 miles from their primary residence.
Most second-home owners are married couples; 83% of vacation-home owners, and 75% of investment-home owners.
In listing the reasons for purchasing a vacation home, 84 percent of buyers wanted to use the home for vacation or as a family retreat; 30 percent to use as a primary residence in the future; 26 percent to diversify investments; 25 percent to rent to others; 16 percent for the tax benefits; 14 percent for use by a family member, friend or relative; and 6 percent because they had extra money to spend.
Vacation-home buyers plan to keep their property for a median of 10 years; 38 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of four years, with 29 percent planning to keep for six years or more. However, 10 percent of investment buyers plan to sell in one year or less.
Buyers must be enjoying the second-home experience. 21% of vacation-home owners go on to buy one or more additional vacation homes, and 34% of investment-home owners go on to buy additional investment properties.
Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 59 percent of primary residence buyers. Forty-four percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years.
NAR’s 2007 Investment and Vacation Home Buyers Survey, conducted in March 2008, includes answers from 1,965 usable responses. The survey controlled for age and income, based on information from the larger 2007 National Association of Realtors® Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
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