Vacation-home sales jumped 29.7% to an estimated 717,000 last year, from 553,000 in 2012. The trend shows no sign of slowing, according to NAR Chief Economist Lawrence Yun.
“Growth in the equity markets has greatly benefited high-net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” he said. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”
Vacation-home sales accounted for 13% of all transactions last year, their highest market share since 2006, while the portion of investment sales fell to 20% in 2013 from 24% in 2012.
Unlike investment buyers, lifestyle factors remain the primary motivation for vacation-home buyers. The typical vacation-home buyer was 43 years old, had a median household income of $85,600, and purchased a property that was a median distance of 180 miles from his or her primary residence; 46% of vacation homes were within 100 miles and 34% were more than 500 miles. Buyers plan to own their recreational property for a median of six years, down from 10 years in 2012.
5% of vacation home buyers have already resold their property, while another 9% plan to sell within a year.
“This reflects the 28% of recreational property buyers who said they purchased to diversify investments or saw a good investment opportunity,” Yun said.
41% of vacation homes purchased last year were in the South, 28% in the West, 18% in the Northeast and 14 percent in the Midwest.