Research: Second-Home Market Snapshot
Survey shows that second-home buyers tend to be more confident about today's housing market.
May 1, 2009
Sales of vacation homes dropped 30.8 percent last year, while investment-home sales fell 17.2 percent, according to the 2009 NATIONAL ASSOCIATION OF REALTORS®' Investment and Vacation Home Buyers Survey. By comparison, sales of primary residences saw a milder drop of 13.2 percent in 2008.
Second homes accounted for 30 percent of all home transactions last year, down from 33 percent in 2007 and 40 percent in 2005—the peak year for home speculation. "We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases," says NAR Chief Economist Lawrence Yun. He noted that a steady share of investment-home sales came from buyers who took advantage of deeply discounted prices.
Despite the sales drop-off, Yun says fundamental demand for second homes remains favorable because a large segment of the population is in the prime age group for buying a vacation or investment property. Most people become interested in buying a second home in their 40s, Yun says, and there are currently 44.8 million people in the United States between the ages of 40 and 49. Another 40.7 million are between 30 and 39.
Survey shows that second-home buyers tend to be more confident about today’s housing market: 80 percent of respondents said now is a good time to buy, compared with 71 percent of primary-residence buyers.
Here’s a look at some other data from the survey.
9 percent of 2008 home buyers identified their purchases as primarily a vacation property.
- Median price: $150,000, down 23.1% from 2007
- Location: Small town (26%), resort area (23%), rural area (23%), suburb (20%), urban area (8%)
- Distance from primary residence: Median of 316 miles.
- Buyer profile: 46 years old, married, with household income of $97,200
- Reason for buying: Use for vacation or family retreat (89%); diversify investments (27%); rent to others (27%); use as primary residence in the future (26%); for use by a family member, friend, or relative (17%)
21 percent of 2008 home buyers identified their purchase as primarily an investment.
- Median Price: $108,000, down 28% from 2007
- Location: Suburb (28%), rural area (23%), small town (22%), urban area (20%),resort area (6%)
- Distance from primary residence: Median of 19 miles
- Buyer profile: 47 years old, married, with household income of $85,000
- Reason for buying: Provide rental income (58%); diversify investments (38%); for use by a family member, friend, or relative (19%); use for vacation or family retreat (15%)
Updated: June 20, 2018