Vacation-Home Sales Plummet 31%

More ugly Real Estate news:

Each year, the National Association of Realtors [NAR] puts out a survey of Investment and Vacation Home Buyers. As is their congenital compulsion, the trade group spun the data to somehow make it appear less negative: "Second-Home Sales Accounted For One-Third of Transactions in 2007".

As if Vacation Home "market share" is a significant statistic.

Puh-leeze.

The data point we are always interested in are the year over year, NSA, sales. In 2006, 1.07 million vacation homes were sold -- a record number. In 2007, second home sales had fallen 31% to 740,000, according to NAR data. The median price of a vacation home was $195,000 in 2007, down 2.5% from $200,000 in 2006.

2007 also saw speculators exiting the housing market: Homes bought purely for investment dropped 18% to 1.35 million last year, compared with 1.65 million in 2006. That is versus a 10% decline in primary-residence sales, (2007 = 4.34 million, down from 2006 = 4.82 million).

59% of vacation homes purchased in 2007 were detached single-family homes, 29% condos, 7% townhouses or rowhouses, and 5% other. In 2006, single family homes were 8% higher (67%) and condos 8% lower (21%). This suggests that some vacation home buyers are shifting towards purchasing smaller, less expensive properties. Perhaps the aforementioned decline in speculative purchases was also a factor in this shift.

Last, the typical vacation-home buyer in 2007 was 46 years old, had a median household income of $99,100, and purchased a property that was a median of 287 miles from their primary residence.

Sources:
Second-Home Sales Accounted For One-Third of Transactions in 2007
NAR, March 28, 2008

Vacation-Home Sales Plummet
Amy Hoak
WSJ, March 28, 2008

Comments

[Ames Tiedeman:]

This is the exact kind of action you see as you form a bottom. I suspect that by 2010 most of the country will be moving again with regard to housing.

2008 Mar 31 02:04 PM

[Kunst:]

2010. That's 21-32 months away. I'll just hold my breath.

2008 Mar 31 05:04 PM

[phdinsuntan...:]

call me when vacation homes falls 85%,
I want to buy a place on the beach...

2008 Apr 01 02:23 PM

[nyka:]

Lots of "meat" here for the knolwedgeable investor to digest. For all others, it's meaningless.

2008 Apr 01 06:59 PM

[petyaczar:]

Good little story, BUT

1)There is no "average" vacation home market, all such markets are local. Poughkeepsie lake manufactured homes may not be selling while Vail and Aspen Colorado homes are doing just fine.

2)The "Average" number is meaningless anyway since it is totally subordinated to the product mix of homes sold, the geographic mix of homes sold, and the new vs existing mix of homes sold.

3)The number of units sold may be of interest, but not as relevant as the average cost of homes sold, of a certain type,within a local
market, For example SKi in,ski out, 4 bedroom villas in Vail.

If the federales and the news hounds would just go do something else, this so called problem - which the federales created by the way - would disappear in about 12 months.

Finally, sombody go buy an "Economics of Idiots" book and give it to Chuckie Schumer and make sure he reads it - as well as looks at the pictures. That D/A piece of political hack doesn't know the first thing about economics. He should be deported back to lower Moronica from whenc he came.

IMO

2008 Apr 01 07:09 PM

[orlando vac...:]

We write about this on our blog a lot. Prices have plummeted....

Susan White...

2008 Dec 10 10:29 PM