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Vacation Homes are Booming

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One of the many possible joys of retirement is owning a vacation home. It’s nice being able to look for a place to live where you actually want to spend your free time, as opposed to targeting the best school zone. But don’t worry, the kids will visit. Here in the LA Times we get a glimpse of the recovering vacation home market. These buyers tend to have money.

 

The market for a place at the lake is hopping.

Sales of vacation homes jumped nearly 30% in 2013, the National Assn. of Realtors reported Wednesday, and second-home purchases made up their biggest share of the housing market since 2006.

“Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” said Lawrence Yun, NAR’s chief economist, though he noted that vacation home sales remain one-third below their peak in 2006.

There were an estimated 717,000 vacation homes purchased last year, according to NAR, up from 553,000 in 2012. The median price of these homes was $168,700, up 12.5% from the year prior. They were most likely to be located in the South — home to 41% of vacation homes — followed by the West at 28%, 18% in the Northeast and 14% in the Midwest.

And NAR found signs that more people are treating vacation homes at least in part as an investment. The median buyer surveyed plans to own the house for six years, down from 10 years in the 2012 survey, and 5% of vacation home buyers have already sold their newly bought house, with 9% planning to sell it this year.

NAR also found that investor purchases of homes fell 8.5%, in large part due to higher prices in much of the country. That figure does not include institutional investor purchases, which have also fallen sharply.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.