You know you've made it when you not only have a primary residence, but a second one to use as a place to relax in during vacation. Last year, a significant percentage of Americans achieved dual homeowner status as vacation home sales were robust, according to a newly released home sales update.
Owner-occupied vacation home purchases rose by double-digits in 2015, according to the National Association of Realtors. More specifically, sales increased nearly 16 percent to 3.7 million, up from 3.2 million the previous year. That's the highest total in eight years, just shy of 3.9 million in 2007.
"Vacation homes are not only bought for regular use, but also as an investment, where mortgage owners decide to rent out the residence to people who are on vacation themselves. These investment purchases increased last year as well, only to a smaller extent at 7 percent, totaling 1.1 million," NAR reported.
On the whole, however, when including owner-occupied and investment homes, sales actually fell in 2015 by just over 18 percent on a year-over-year basis.
Second-highest sales level since 2006
Lawrence Yun, NAR chief economist, said that the overall slip doesn't detract from the fact that vacation sales are at their highest levels in a decade, largely stemming from retirees who have exited the workforce and are now living out their golden years.
"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," Yun explained. "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."
Indeed, among vacation homes exclusively, high demand and low volume pushed the median price to $192,000, up by almost 30 percent from 2014, the report said. The asking price for investment homes also rose by double-digits at over 15 percent, putting the median at $143,500.
Nearly half of vacation sales in South
As you might expect, the South saw the greatest amount of mortgage activity, seeing as how the weather tends to be warmer than the North or parts of the West. This was particularly evident in Florida, home to several destination hotspots like Miami, Ft. Lauderdale and Orlando.
Over one-fourth of housing markets in the country are made up of residences worth more today than ever before, according to estimates from home listings website Zillow. Many of these markets are in the South, including Texas and Tennessee.
Almost half of all vacation home buys in 2015 were in the South, according to NAR's Investment and Vacation Home Buyers Survey. Specifically, 47 percent were in this region of the country, up from 41 percent in 2014. The remainder were in the West at 25 percent, the Northeast at 15 percent and Midwest at 13 percent, all unchanged from year-ago levels.
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