Vacation Homes - 4/11/14
The vacation home is making a comeback. Thanks in large measure to a surging stock market, Americans with discretionary spending power are increasingly looking for opportunities in the market for second or third homes. Vacation properties accounted for 13 percent of all sales last year, the highest level since 2006 when the share was 14 percent according to the National Association of Realtors.
As reported by Bloomberg, approximately 38 percent of vacation home buyers paid with cash in 2013. Many of these properties were classified as distressed properties, meaning that the previous owner likely ran into financial difficulties that resulted in foreclosure or some form of forced sale. Distressed homes including foreclosures accounted for 42 percent of purchases by recreational buyers last year. The typical vacation home buyer was 43 years old with a household income approaching $86,000.
The property is a median distance of 180 miles from the primary residence, or roughly the distance from Baltimore to Deep Creek Lake in Western Maryland or Ocean City on Maryland’s Eastern Shore.
The U.S. is home to 8 million vacation homes according to a recent analysis of Census Bureau data.