WASHINGTON (April 2, 2014) – Vacation home sales increased strongly in 2013, while investment buys fell below the elevated levels observed in the previous two years, according to the National Association of Realtors. NAR Chief Economist Lawrence Yun expected an improvement in the holiday home market. “Growth in the collateral markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to buy recreational property,” he said.
Yun said the pullback in investment activity is understandable. “Investment purchasers slowed their purchasing in 2013 because prices were increasing quickly along with the declining availability of discounted foreclosures over the course of the entire year,” he said. “In 2011 and 2012, investment property was a no-brainer because home prices acquired sharply over corrected during the downturn in many areas, creating great good buys that might be turned into profitable renting quickly.
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With a go back to more normal market conditions, traders will have to evaluate their purchases more carefully and do their research,” Sun added. All-cash buys remained fairly common in the investment- and vacation-home market: 46 percent of investment buyers paid cash in 2013, as did 38 percent of vacation-home purchasers. Of customers who financed their purchase with a mortgage, large down payments continued to be the norm in 2013. The median downpayment for investment buyers was 26 percent, while vacation-home buyers put 30 % down typically. Forty-seven percent of investment homes purchased in 2013 were distressed homes, as were 42 percent of vacation homes.
Lifestyle factors remain the primary motivation for vacation-home purchasers, while local rental income is the main element in investment purchases. 85,600 and purchased a house that was a median distance of 180 kilometers from his / her primary home; 46 percent of holiday homes were within 100 mls and 34 percent were more than 500 mls.
Five percent of vacation-home buyers acquired already resold their house, 12 months while another 9 percent plan to sell within a. “This reflects the 28 percent of recreational property buyers who said they purchased to diversify investments or saw a good investment opportunity,” Yun said. Forty-one percent of vacation homes purchased last year were in the South, 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest. 111,400 and bought a home that was relatively near to their primary residence – a median distance of 20 mls. Seven percent of homes purchased by investment customers this past year have been completely resold, calendar year and another ten percent are planning to be sold within a.
Thirty-eight percent of investment properties purchased last year were in the South, 25 % in the West, 18 percent in the Northeast and 19 percent in the Midwest. More than eight out of 10 second-home customers, both for holiday and investment homes, said it was a good time to buy. Approximately 43.4 million people in the U.S.