Vacation home sales hit new high in 2014

Vacation home sales hit a new high in 2014, up 57.4 percent from the 717,000 sold in 2013.

According to the National Association of Realtor®’s (NAR) 2015 Investment and Vacation Home Buyers Survey, which covered both existing and new-home transactions for 2014, an estimated 1.13 million vacation homes were sold last year, the highest amount since NAR created the survey in 2003. Previously, the peak level was hit in 2006. Of all transactions, vacation homes accounted for 21 percent of sales in 2014.

NAR chief economist Lawrence Yun said in a statement: “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. 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.”

According to the survey, the typical vacation-home buyer in 2014 had a higher median household income of nearly $10,000 than in 2013, rising from $85,600 to $94,380. Vacation-home owners also purchased further away from 2013, with an average distance of 200 miles, up from 180 miles. One statistic that hasn’t changed is how long purchasers plan to own their property, with respondents answering six years for both 2013 and 2014.

Although the national average has risen, it may not have hit here in Pennsylvania yet. “When we travel to the NAR meetings and swap stories with second home agents, the majority of resort market places went through their inventory in about six months,” said Realtor® Adrienne “Abe” Wagner of Berkshire Hathaway HomeServices The Preferred Realty.

“Everything has a cycle, we haven’t seen ours recover yet. It is very important to note that economics plays a huge part in the second home marketplace. Many resort areas saw incredible price reductions and when the cycle began to turn the bargain hunters took advantage. Great inventory and historic low interest rates seldom happen at the same time,” she said.

In other news, investment purchases fell for the fourth year in a row. Those sales decreased 7.4 percent dropping from 1.10 sales to about 102.million. The percentage of investment sales fell from 20 percent in 2013 to 19 percent.

Owner-occupied purchases also dropped, falling 12.8 percent. In 2013, sales were 3.7 million, and in 2014, sales decreased to 3.23 million. The percentage of owner-occupied purchases decreased from 67 percent in 2013 to 60 percent.