Most of the coverage of the National Association of Realtors’ latest vacation home study focused on the modest increase in the number of sales from 2008 to 2009. And certainly it was good news that 7.9 percent more vacation homes were sold in the U.S., even though any comparison to 2008, the Pit of Darkness, is largely irrelevant. It would have been big news if there wasn’t an increase.
The real news from the study, the big takeaway, was not the numbers, but what the survey revealed about the mindset of U.S. buyers.
According to the survey of 1,930 buyers, while vacation homes purchased increased, the number of investment sales decreased by 15.9 percent. Only one in four vacation-home buyers plan to rent their properties, the study found.
“The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat,” said NAR economist Dr. Lawrence Yun in a statement.
To a degree, some of those buyers undoubtedly told a little white lie. They may have checked the lifestyle box to explain their purchase, but down the road they certainly see the property as a good investment, too. By pulling the trigger, they were indicating that it is a good time to sink money into property, rather than other investments, in their opinion.
In essence, these buyers are saying that they see a second home as a good investment for the long term, something they can use for vacations now, and maybe make a few bucks when the market jumps. They may not plan to rent, but that doesn’t mean they ignored the investment implications.
More than anything, the study shows a changing attitude toward second homes, perhaps bringing the U.S. more in line with the U.K. and Europe, where second homes are an engrained part of the culture. The typical age of a second home buyer was 46, the study found, part of a movement toward younger buyers.
“Historically, people become interested in buying a second home in their mid 40s,” Yun said. “The large number of people who are now in their 30s and 40s will dominate the second-home market in the coming decade.”
