Vacation Home Sales Continued To Rise in 2012, With Median Sales Price Up For the First Time Since 2009, According to New Research from HomeAway and National Association of Realtors
Buyers Attracted by Potential for Rental Income and Price Appreciation, and Skew Younger
AUSTIN, Texas, April 2, 2013 – The market for vacation home sales in 2012 showed continued signs of strength, with a 10% increase in sales from the prior year and a 24% increase in the median sales price, the first rise in three years, according to the 2013 Investment and Vacation Home Buyers Survey by the National Association of Realtors® (NAR).
As part of the survey, proprietary research commissioned by HomeAway, Inc. revealed 38% of vacation home buyers purchased a vacation property in 2012 primarily because of low real estate prices, which has grown 5 percentage points from 2011, while another 28% cited the desire for a family retreat.
According to the NAR survey, the median sales price rose last year for the first time since 2009, from $121,300 in 2012 to $150,000 in 2013, and the median buyer’s age was 47, with more buyers under age 45 entering the market.
The survey also shows rental income still holds significant appeal for buyers of vacation homes. For nearly eight in 10 buyers (76%) rental income influenced their decision to buy last year, a 5 percentage point increase from 2011, and nearly all (92%) vacation home buyers plan to rent their property within the next 12 months to either long-term or short-term renters or a combination of the two. Approximately 60% of buyers believe they’ll make enough rental income to cover at least half of their mortgage.
Other vacation home buyers cited the following factors as the most important reason to take the plunge into vacation home ownership last year, according to the HomeAway® portion of the research:
- For future retirement (12%)
- Low mortgage rates (11%)
- Potential for price appreciation (7%)
- Other (4%)
“Although vacation homes prices are starting to rise, the cost is still incredibly affordable compared with prices 10 years ago,” says Brian Sharples, chief executive officer of HomeAway. “At the same time, the interest in vacation rentals by travelers in the United States remains strong, and the speed and ease with which owners can list and rent a home online has never been more favorable, making it the perfect time to consider the purchase of a vacation home.”
According to the NAR survey, 78% of vacation home buyers believe now is a good time to purchase real estate, and 27% say they purchased a vacation home in 2012 to use as a principal residence in the future, typically after retirement. Nearly half (46%) of buyers paid cash for their vacation homes last year, while slightly more than half took out a mortgage.
Of those buyers intending to rent their property, about 31 percent plan to make their vacation homes available for rent between one and eight weeks over the course of the next year; 36 percent plan to rent their properties between nine and 26 weeks per year; and 33 percent plan to rent their homes between 27 and 52 weeks per year.
Buyers aren’t limiting themselves to proximity to their primary homes when purchasing vacation homes. Nearly half (46%) of owners purchased vacation homes more than 500 miles from their primary residence.
About the National Association of Realtors 2013 Investment and Vacation Home Buyers Survey:
NAR’s 2013 Investment and Vacation Home Buyers Survey, conducted in March 2013, includes answers from 2,326 usable responses about homes purchased in the United States during 2012. The survey controlled for age and income, based on information from the larger 2012 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents. As a subset of the survey, HomeAway, Inc. commissions proprietary questions from the portion of the respondents who have purchased vacation homes and investment homes.
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