| Many people looking for a wise real estate | | | | in their prime buying ages. Buyers purchased |
| investment usually purchase second homes in | | | | second homes as recreational properties for |
| another place where they can vacation from | | | | personal use with investment as a secondary |
| time to time with their loved ones. The baby | | | | reason. Real estate experts say it does not |
| boomers comprise this segment of real estate | | | | necessarily follow that those who buy |
| buyers which in turn drives the growth of the | | | | multiple vacation properties are the wealthy |
| vacation real estate market. But although a | | | | people. This small but growing segment of the |
| real estate group has reported a plunge in | | | | market are usually those nearing their |
| 2006, the demand for vacation homes remains | | | | retirement, making a good living and have |
| strong this 2007. | | | | more control over their work schedule that |
| | | | they have extra time to spend at their |
| The National Association of Realtors (NAR) | | | | vacation homes. Apart from recreation, some |
| revealed that the sales of second homes for | | | | of them earn short-term income by renting out |
| investment went down by 28.9 percent in 2006. | | | | their second or third homes. |
| The figure was down from 2.32 million | | | | |
| vacation homes sold in 2005 during the peak | | | | As for the price, the median rate of a |
| of the so-called "five-year housing boom" to | | | | vacation home in 2006 was down two percent |
| 1.65 million. NAR, however, made it clear | | | | from $204,100 in 2005 to $200,000 in 2006. |
| that the drop was not due to the general | | | | The typical investment home also sold lower |
| housing slump last year because vacation | | | | at $150,000 compared to the $183,500 in 2005. |
| homes soared by 4.7 percent to a record 1.07 | | | | |
| million units compared to 1.02 million sales | | | | NAR studies |
| in 2005. | | | | |
| | | | The second home segment of the housing market |
| NAR further said that based on its survey, 22 | | | | is actually bigger than expected making up |
| percent of all homes bought in 2006 were | | | | one-third of the market, according to the |
| meant for investment and the figure was down | | | | NAR. Two NAR studies have confirmed that |
| from a 28 percent market share in 2005. The | | | | indeed this market is growing based on the |
| number of vacation homes purchased, though, | | | | number of purchases made in 2003 and 2004. In |
| went up from 12 percent in 2005 to 14 percent | | | | 2004 alone, 36 percent or a total of 2.82 |
| of the total market for new and existing | | | | million of homes bought were second homes |
| homes. | | | | while in 2003, the total was only 2.42 |
| | | | million. Investment was the main purpose of |
| Vacation home buyers | | | | the purchases (23 percent) while only 13 |
| | | | percent were for vacation reasons. |
| The typical buyers of vacation homes in 2006 | | | | |
| were those aged 44 and had a median household | | | | NAR's studies on second homes were based on |
| income of $102,000. The vacation homes | | | | two surveys done between middle of 2003 and |
| preferred were at a mid-point of 215 miles | | | | middle of 2004. Census Bureau statistics in |
| from the homeowners' primary residence. NAR | | | | 2003 showed there were 43.8 million second |
| said the demographics were favorable for | | | | homes in the U.S., 6.6 million vacation homes |
| sales of vacation homes with most consumers | | | | and 37.2 million investment properties. |