Vacation home sales improved in 2012, while investment purchases remained elevated for a second consecutive year. Favorable conditions are driving second-home sales, according to REALTOR® officials.
According to the National Association of REALTORS®' 2013 Investment and Vacation Home Buyers Survey, vacation-home sales rose 10 percent from 502,000 in 2011 to 553,000 in 2012. Investment-home sales declined 2 percent from 2011, but held steady at 1.2 million. Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from 2011. Investment sales accounted for 24 percent of all transactions in 2012, down from 27 percent in 2011, but still the second highest share since 2005.
The median vacation-home price was $150,000, compared with $121,300 in 2011. All-cash purchases remain common in both the investment- and vacation-home market: half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers. The median down payment for both investment- and vacation-home buyers who financed their purchase with a mortgage was 27 percent in 2012, the same as in the prior year.
Carolyn Miller, president of the Silicon Valley Association of REALTORS®, said it is a good sign that the vacation- and investment-home market is seeing much activity. "Activity in this sector of the market shows consumers have more confidence in the economy," said Miller.
The NAR report supports Miller's observations. Seventy-eight percent of all second-home buyers said it was a good time to buy, compared with 68 percent of primary residence buyers.
Investment-home buyers in 2012 had a median age of 45, and a median income of $85,700. Thirty-five percent of investment buyers purchased more than one property.
The typical vacation-home buyer was 47 years old and had a median household income of $92,100. Buyers plan to own their recreational property for a median of 10 years.
Before looking into purchasing vacation property in an area that is a distance from your primary residence or out of state, Miller suggests interviewing several REALTORS® before choosing a professional best suited to your needs. "Ask how many vacation home listings they have, how many years they've worked in the business and about any particular specialties," said Miller.
"A REALTOR® can help you determine how much you can afford and the personal and financial data you will need to apply for a loan. Additionally, a REALTOR® will be familiar with current real estate values, taxes, utility costs, municipal services and facilities and zoning laws that may affect your vacation property," said Miller.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.