Sales of vacation homes rose sharply in 2012 on a year-over-year basis, the National Association of Realtors (NAR) revealed in a recent report.
According to the NAR, national sales of vacation homes increased from 502,000 in 2011 to 553,000 in 2012. This 51,000 increase represents a 10.1 percent yearly increase in vacation-home sales.
“We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes,” Lawrence Yun, NAR Chief Economist, said in a statement. “Attractively priced recreational property is also a big draw.”
Despite the year-over-year increase of vacation-home sales, investment-home sales dropped slightly in the same time frame. Sales of investment homes dipped from 1.23 million in 2011 to 1.21 million in 2012, a 2.1 percent decrease.
The overall share of sales considered investment-home sales dropped of 27 percent in 2011 to 24 percent in 2012. The share of sales considered vacation-home sales stayed even year-over-year at 11 percent.
“Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” Yun said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
According to the NAR, prices for both vacation-home properties and investment-home prices showed large yearly increases.
The median price for vacation homes rose 24 percent year-over-year, from $121,300 in 2011 to $150,000 in 2012. Additionally, the median investment-home price rose 15.0 percent – from $100,000 in 2011 to $115,000 in 2012.
Regionally, the South led the way in both categories. For vacation homes, 45 percent of 2012 sales came in the South, while 36 percent on investment-home sales occurred in that region.
The West came in second place in share of vacation-home sales at 25 percent, followed by the Northeast (17 percent) and the Midwest (12 percent).
The West also took a 28 percent share of investment-home sales, followed by the Northeast (20 percent) and the Midwest (16 percent).