The stats below are from the 2016 NAR Vacation Home Buyers Survey
In 2016 the share of buyers who purchased a primary home rose for the 3rd year to 70% from 65%. The share of vacation home buyers dropped for the 3rd straight year to 12% from 16%. FYI, the decline puts the share at the historical average for the data collected since 2003. The share of investment buyers remained at 19% for the 3rd straight year. Vacation / investment home buyers buy for different reasons than primary home buyers. 42% of vacation home buyers plan to use their property for vacations or family retreat, 18% plan to convert their vacation home to their into their primary residence in the future for retirement, and 12% bought because of low real estate prices and the buyer found a good deal. 37% of investment property buyers purchased the home to generate income through renting the property, 16% purchased for potential price appreciation, and 15% because of low real estate prices and they found a good deal.
The share of vacation buyers and investors who purchased a short sale or foreclosure in 2016 remained higher than among primary residence home buyers. Over 35 percent of vacation / investment home buyers purchased a distressed sale. The median vacation home purchase price was $200,000 for 2016, compared to $192,000 in 2015. Investors’ medium priced property was $155,000, up from $143,500. Thirty-six percent of investors and 29% of vacation home buyers paid cash for their purchase. When financing their purchase over 45 percent of buyers financed less than 70%.
Vacation buyers, 25% purchased in a resort, 25% in a rural area and 21% in a small town. Thirty-six percent purchased in a beach area, 21% purchased on a lakefront and 20% purchased a vacation home in the country. The median square feet of a primary residence was 1,900 sq. ft. while the median square feet of an investment property was 1,500 and a vacation home was 1,460. The typical vacation home was 200 miles from the buyers’ primary residence, while the typical investor property was 20 miles from their primary residence. Among vacation buyers, 18% plan to own their home for future retirement.
Investors are most likely to rent their properties as short term rentals. Among vacation buyers, 29% did or tried to rent their property in 2016 and plan to rent their property in 2017. Among investors, 44% did the same. Investors plan on renting their properties 365 days (long and short term rentals), while vacation buyers plan to rent their properties for 30 days. Even some primary home buyers (11%) will try to rent their properties in 2017 for a medium of 3 days.
Buyers of vacation homes, and investment properties were active in the market despite the hurdles they may face with tight financing. More than 80% of vacation buyers reported that now is a good time to purchase real estate. Twenty-eight percent of investment buyers are very likely to buy another investment property, and 16% of investment buyers are very likely to purchase a vacation property in the next two years. Similarly, 23% of vacation buyers are likely to purchase an investment property and 21% are very likely to purchase another vacation property in the next two years. Among primary residence buyers, 6% are very likely to buy an investment property and 4% are very likely to buy a vacation property in the next two years.
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