Investment, Must Reads, Property, Vacation homes & real estate

Vacation Homes- Low Sales, High Prices

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Vacation Homes- Low Sales, High Prices

Within the past year, vacation home sales have declined. With political change in the air within the US, realtors have mentioned that buyers are wary of an economy which has created a hesitation to invest in a vacation home.

According to the National Association of Realtors (NAR) sales of vacation homes in 2015 was 920,000 falling 18.5 percent from 2014 figures. The median price of vacation homes sold in 2015 was $192,000 which was a 28 percent increase from 2014. The main cause pointed out by the NAR was there is an expanding pool of buyers while there was a decline in lower priced properties, this resulted in a tighter supply and fewer sales. The unstable markets in the last half of the 2015 would more than likely have seized the would-be buyers’ available cash.

The lower-end of vacation home sales is still pretty strong but the higher end of the market (properties over $1,000,000) tends to sit for a while because the supply of those properties is quite strong right now. A rule of thumb the housing market goes by is a 6 month supply is considered as balanced. Currently the supply of low-end inventory is around the 2 to 3 month supply, this can also be reflected in the domestic housing markets lack of overall supply. The strongest price appreciation was most notable in Florida. The appreciation was mainly for single-family homes although many parts of Florida is currently experiencing a condominium glut.

Vacation homes sales in 2015 was 16 percent for all property tractions in the U.S, this is 21 percent lower than 2014. Cash purchases were made more in 2015 and had a higher median household income than 2014.

According to the NAR over a third of the buyers purchased their house as a vacation home(37 percent), a portion purchased a house for future retirement plans (16 percent) and only a smatter purchased as a vacation rental investment(7 percent, down 4 percent from 2014). 

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