Sales of vacation and investment homes in the United States fell 22% last year, according to the National Association of Realtors. Second home sales comprised 30% of the entire housing market, down from a peak of 40% in 2005.
"The vacation home market really was driven by the availability of debt," said Daniel Alpert, managing director of Westwood Capital LLC, a New York-based investment bank. "Folks were able to pick up vacation homes with very little money down and substantial loans. Given the absence of mortgage money for primary homes, one can imagine that there's no mortgage money for vacation homes."
Just 9% of sales last year were for vacation homes, down from 12% in 2007, NAR said. Proportionally, investment properties held steady at 21%
Wealth and age are strong factors in second home sales. Nearly half of vacation home buyers and two-fifths of investment home buyers had a household income of more than US$100,000. The median age for vacation home buyers was 46, nine years older than buyers of primary homes.
Overall, second home sales dropped from about 2.09 million in 2007 to 1.63 million last year. Vacation home sales dropped 31% to 512,000, while sales of investment properties fell 17% to 1.12 million.
NAR said that the median sales price of vacation homes fell to $150,000. Sales prices of investment properties dropped to $108,000.
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