Vacation Home Sales Not Affected By Real Estate Slump
It looks like people are more concerned about their vacation rather than their investments. According to a recent report published by a real estate trade group, there has not been any decline in the sales of vacation homes while there has been a significant decrease in the sales of second homes purchased as investment properties. As per the figures from National Association of Realtors, the sales of second homes have gone down 28.9 percent in 2006. At the same time, the 1.07 million units of vacation homes were sold, which is an increase of 4.7 percent. In 2005, around 1.02 million units of vacation homes were sold.
David Lereah, who is the chief economist at the NAR, is not surprised at the situation. According to him, the main reason for the fall in the second home sales is due to speculators who have deserted the market. The sales of new and existing homes which were at their peak for a period of five consecutive years till 2005 have suddenly started falling in 2006.
David cites demographic forces as the prime reason for an increase in the vacation home sales during the slump period. According to him, most buyers are more interested in buying a personal recreational property. For these consumers who are in their prime buying age, investment seems to be a secondary option. As per the survey report of National Association of Realtors, the average age of a vacation home buyer in 2006 was 44 and was earning a median household income of $102,000. The median price of a vacation home in 2006 was $200,000.
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