Vacation homes flourished in the US market last year while investment purchases dipped, according to the National Association of Realtors (NAR).
Vacation home sales surged nearly 30% year-on-year to 2013, according to the NAR’s 2014 Investment and Vacation Home Buyers Survey, totalling an estimated 717,000. They accounted for 13% of all transactions last year, the highest since 2006.
Meanwhile, Investment-home sales took a turn for the worse, dropped 8.5% to around 1.1million. They accounted for 20% of transactions in 2013, compared to 24% in 2012.
NAR Chief Economist Lawrence Yun noted that conditions were right for a vacation home comeback: “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.”
He added that the dip in investment sales was also to be expected, saying that the ‘bargains’ of 2011 and 2012 had elevated investment properties. “With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework,” he said.