According to an annual report from the National Association of Realtors, sales of vacation homes rose significantly in 2013 as growth in stock markets provided wealthier families with discretionary cash to spend on second and third vacation homes.
Vacation-home sales rose 29.7 percent to an estimated 717,000 in 2013 from 553,000 in 2012. The vacation home sector accounted for 13 percent of all real estate transactions last year, NAR said in its 2014 Investment and Vacation Home Buyers Survey.
“Growth in the equity markets has greatly benefited high net worth households, thereby providing the wherewithal and confidence to purchase recreational property,” said NAR Chief Economist Lawrence Yun in a statement. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”
“In 2011 and 2012, investment property was a no-brainer because home prices had sharply overcorrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals,” Yun said. “With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework.”