Second Home Sales Surged in 2011 by 65%, Vaca Home Sales Up by 7%

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It had to happen sooner or later, especially with prices slashed and dashed by 40 to almost 60% in some markets. But sales of second homes, some vacation, most investment, shot up in 2011. The combined sales of vaca and investment homes was at the highest it has been in this country since 2005. The NAR says purchases of investment homes rose by more than 64%. Buyers rushed in to take advantage of those slashed prices and low finance rates, when, that is, they could obtain financing. Meantime, sales of vacation homes were up 7 percent.

National Association of Realtors chief economist Lawrence Yun said that investors have been swooping into the market to take advantage of bargain home prices, and the lure of rising rental income has beat out cash sitting idle in banks earning very little interest.

And get this: 41 percent of investment buyers purchased more than one property. Almost half of the investment home buyers paid cash for their purchases in 2011, as did more than 40 percent of vacation home buyers. While the second home purchases were up, sales of owner-occupied houses dropped by 15.5 percent in the U.S. in 2011 from 2010 as more people chose to lease rather than buy.

And at last week’s Urban Land Institute conference, we were told to get ready for creative options in the second home market: more fractionals and sharing, which is not only cheaper but greener and a wiser use of resources. Coming up: my field trip to Calistoga Ranch, one of the best fractional ownership opportunities in the world.

 

 

 

But median prices for vacation homes continued to fall by another 19.1 percent for the year.

 

Candy Evans

Candy Evans

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