Published in: Unique Homes Magazine
Written by: Ken Weingartner
The vacation home market enjoyed a record 2006 and forecasts point toward a sunny future.
According to the National Association of Realtors, a record 1.07 million vacation homes were purchased last year, an increase of 4.7 percent from the 1.02 million sold in 2005. According to NAR's data, the typical vacation home buyer was 44 years old with a median income of $102,200 and bought property a median distance of 215 miles from their primary residence. One-fourth of the buyers paid cash.
"The demographics favor vacation home sales because large numbers of buyers are in prime buying ages, and buyers want recreation property for personal use," said David Lereah, NAR's chief economist.
A study released in May by the American Affluence Research Center determined the potential existed for the purchasing of 1.1 million homes over the next 12 months by the wealthiest 10 percent of Americans. Nearly 6 percent of respondents, representing 11.2 million households, planned to purchase a vacation home, compared to 4 percent planning to purchase a primary residence.
One result, labeled as "surprising," was that 60 percent of the target market for private residence and destination clubs expressed being unfamiliar with either concept.
Vacation and investment home sales accounted for 36 percent of all existing and new residential transactions in 2006.
"You can't lump second home sales in with overall home sales; they really are two separate and distinct markets," author/analyst Christine Karpinski said. "So don't let the doom-and-gloom sayers discourage you, and don't let a sluggish real estate market in your area do so, either. You're on a whole different playing field."
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