Second Home Sales are Surging in the U.S.

I just read a report in The Wall Street Journal that says second home sales are surging in the U.S. thanks to expanding wealth, the stock market rally and restored confidence in the housing market. In fact, the National Association of Realtors (NAR) says the nation’s second or vacation-home sales jumped 30% last year to 717,000.
The last time we saw a surge like this in second home sales was in 2006 when vacation properties accounted for 14% of all sales. Today, homes acquired for part-time personal use are back up to 13%. Approximately 38% of those buyers paid in cash. Homes in foreclosures accounted for 42% of purchases by recreational buyers and 47% by investors. Buyers today said they plan to own their recreational property for a median of 6 years, down from 10 years in 2012. More than eight out of 10 second-home buyers, both for vacation and investment homes, said now is a good time to buy.
NAR Chief Economist Lawrence Yun said he expected an improvement in the vacation home market. “Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” he said. In 2011 and 2012, investment property was a no-brainer because home prices had sharply over corrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework,” he added.
About 28% percent of seasonal properties purchased were here in the West. Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
If you are looking to purchase a second home for vacation or investment in Santa Barbara, Montecito or Hope Ranch, please let me put my 20+ years in the industry to work on your behalf. Check out my website, then call me at 805.886.9378 or email me at Cristal@montecito-estate.com. I am here to help!