Who Buys Lake Homes?
Interest in lakefront property remains at an all time high. According to the “NAR 2016 Investment- and Vacation- Home Buyer’s Survey,” the sale of vacation homes in 2015 was around 920,000 - the second highest amount in nearly a decade. Conducted annually by the National Association of Realtors, the survey covers existing and new home transactions in 2015.
Sales estimates are based on a national online survey including responses from 2,000 + U.S. adults who purchased residential property in 2015. Although vacationhome sales are down from the peak level of 1.13 million in 2014, interest remains high for second homes.
“Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,” explained Lawrence Yun, NAR chief economist. “The expanding pool of buyers amidst a dwindling number of bargain-priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise.”
The median sales price of a vacation home was $ 192,000 in 2015, up 28 % from 2014. It should be pointed out that not all areas of the nation experienced such a steep jump. Buyer demand is particularly high in the south - most notably in several Florida markets.
Altogether, vacation-home sales accounted for 16 % of all transactions in 2015, the second highest share since the survey was first conducted in 2003. Owner-occupied purchases was 65% of the total; investment-home purchases accounted for the remaining 19%.
Characteristics of Vacation-Home Purchasers According to the survey:
• Vacation-home buyers purchased property that was a median distance of 200 miles away from their primary residence.
• Vacation-home buyers intend to own their property for a median of 7 years, up from 6 years in 2014.
• The median household income of a vacation-home buyer in 2015 was $103,700 ($94,380 in 2014).
• 58% of vacation-home purchases in 2015 were single- family homes. The remaining 42 % were condos, townhouses or row houses.
• 37 % of vacation-home buyers plan to use their property for vacations or family retreats. 16 % bought the vacation home for future retirement plans. 7 % purchased to generate income through renting the property (down from 11 % in 2014).
• 24% of vacation-home buyers (not primarily investment- home buyers) did or tried to rent their property in 2015 and plan to rent again this year. Vacation buyers are more likely to use a property manager or social media to rent their property. (Investment-home buyers are more likely to use a traditional real estate agency.)
• 38% of vacation-home buyers paid in cash for their second home (up from 30% in 2014). Of buyers who financed their purchase with a mortgage, over half ( 52% )
of vacation buyers financed less than 70 % of the purchase price.
Encouraged by increasing home prices and housing demand, more than 80 % of vacation-home buyers believe that now is a good time to purchase real estate.
Source: National Association of Realtors “2016 Investment- and Vacation-Home Buyer’s Survey,' conducted in March 2016. For additional information on NAR -
“The Voice For Real Estate' and the nation’s largest trade association - go to www.realtor. com.