Vacation Home Sales Soar to Record High

An annual survey of residential home buyers by the National Association of Realtors shows that vacation home sales boomed in 2014 to above the most recent peak level in 2006.

NAR’s 2015 Investment and Vacation Home Buyers Survey covered existing and new home transactions in 2014. Vacation home sales catapulted to an estimated 1.13 million in 2014, the highest amount since the survey began in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013. The results of the survey were released in April.

Vacation homes are defined as recreational properties purchased primarily for the buyer’s or buyer family’s personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.

Lawrence Yun, National Association of Realtors chief economist, said vacation sales showed astonishing growth, nearly doubling the combined total of the previous two years. “Affluent households have greatly benefitted 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,” Yun said. “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.”

Vacation home sales accounted for 21 percent of all transactions in 2014, the highest market share since the survey was first conducted.

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 farther away (200 miles) than a year ago (180 miles). Buyers plan to own their property for a median of six years, unchanged from 2013.

Although a majority, 54 percent, of vacation buyers bought a single-family home, the share of those buying a condo, 27 percent, or townhouse or row house, 18 percent, increased from the previous year. Forty percent of vacation buyers purchased in a beach area, 19 percent purchased in the country and 17 percent purchased a vacation home in the mountains.

One-third of vacation buyers plan to use their property for vacations or a family retreat, 19 percent plan to convert their vacation home into a primary residence in the future, and 13 percent bought for potential price appreciation. Forty-six percent of vacation homes purchased in 2014 were in the South, 25 percent in the West, 15 percent in the Northeast and 14 percent in the Midwest.

The National Association of Realtors 2015 Investment and Vacation Home Buyers Survey was conducted in March and surveyed a sample of adults who had purchased any type of residential real estate during 2014. The survey sample was drawn from a representative panel of US adults monitored and maintained by an established survey research firm. A total of 1,971 qualified adults responded to the survey. Consumers were sampled to meet age and income quotas representative of all home buyers drawn from the NAR 2014 Profile of Home Buyers and Sellers.

The National Association of Realtors is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.