The vast majority of Americans don’t have or can’t afford vacation homes, particularly as the overall housing market is still in recovery mode in most regions.
However, vacation home purchases have surged to become a significant slice of the recovery, for example some people are looking into places like Marco Island Condos For Sale. With others looking for their vacation homes somewhere in the countryside of the United states, an example of this can be those looking for a make an investment and looking into places like wisconsin lake properties for sale. Sales of vacation properties made up 21 percent of all home sales last year at an estimated 1.13 million, the highest level since 2003 and a 57 percent increase from 2013, according to a new report from the National Association of Realtors.
The typical second-home buyer had a median household income of $94,380, with 58 percent having two income earners. The NAR found that 48 percent financed less than 70 percent of the purchase price.
The typical vacation-home buyer in 2014 had a higher median household income ($94,380) than those in 2013 ($85,600) and purchased a property that was further away (median distance of 200 miles) than a year ago (180 miles). Buyers plan to own their property for a median of 6 years, unchanged from 2013.
Forty-five percent of vacation homes and 44 percent of investment homes purchased in 2014 were distressed properties – either a home in foreclosure or a short sale. In 2013, 42 percent of vacation homes and 47 percent of investment home purchases were distressed.
“Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment,” said Lawrence Yun, NAR chief economist. “Furthermore, last year’s impressive increase also reflects long-term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years.”
Despite the demand, the median sales price of both vacation and investment homes declined in 2014. The median vacation home price was $150,000, down 11.1 percent from $168,700 in 2013. The median investment-home sales price was $125,000, down 3.8 percent from $130,000 a year ago.
Investment-home sales in 2014 decreased 7.4 percent to an estimated 1.02 million in 2014 from 1.10 million in 2013, an indication that fewer bargain properties are available on the market as inventories overall have tightened. Owner-occupied purchases fell 12.8 percent to 3.23 million last year from 3.70 million in 2013. The sales estimates are based on responses from nearly 2,000 U.S. adults who purchased a residential property in 2014, and exclude institutional investment activity, the NAR said. Despite an overall declining market, there are still fantastic properties to be found, as long as you can negotiate a favorable vacation home mortgage
then don’t be dissuaded from expanding your property portfolio.
“Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals,” says Yun.