Vacation Home Purchases Surged in 2014
With the way the country's economy has been going lately, many people were surprised to learn that 2014 actually saw a big increase in the number of vacation homes purchased. In fact, the sales of vacation homes in 2014 is the highest it has ever been since at least 2003. That's because it was 2003 when the National Association of Realtors began noting down vacation home purchases. Any surges before then were not tracked.
This surge for vacation homes is up 57.4 percent compared to 2013. Last year, there was an estimated 1.13 million in vacation home sales. These particular sales accounted for 21 percent of all transactions for the year. This is a number never seen before. The National Association of Realtors have stated that the amount of sales recorded shows that there was a huge amount of growth in this market, with numbers practically doubling the combined totals of 2012 and 2013.
With this surge in vacation homes, the affluent community has really been positively impacted. They have benefited greatly from the stock market's growth in recent times and thanks to this surge, it doesn't look like this growth will be slowing down anytime soon. This surge also shows that baby boomers are opting for purchasing second homes. That's because they are moving closer and closer to retirement and want a place to turn into their primary home in a couple of years.
There was a decrease, though, when it comes to vacation homes. The amount of home buyers who paid for their property with cash fell to 30 percent. In 2013, this number came in at 38 percent. Roughly half of the individuals who purchased a vacation home in 2013 with a mortgage financed under 70 percent of the sales price. The National Association of Realtors noted that the average vacation home buyer in 2013 had a median household income of $94,380.
In particular, vacation homes that were found on or by a beach accounted for 40 percent of the sales that were made. Countryside homes followed with 19 percent of sales. Homes by the mountains sold well too with 17 percent. People may have once thought of vacation homes being a thing of the past, especially with the way the economy has been going. However, with
one quick look at the states, it's apparent there is a surge and that home buying will only continue to increase.
Gennady Barsky is a real estate mogul and CFO of JetSmarter who hails from NYC.