More than half a million vacation homes were purchased last year, fueled by low real estate prices, attractive mortgage rates and the potential for price appreciation according to research done by the National Association of REALTORS for HomeAway.
Low prices lure buyers…
Source: HomeAway
The research found 38% of vacation home buyers decided to purchase a vacation property last year primarily because of low real estate prices. And 2010 proved a good year to buy, according to the NAR survey. Median sales prices for vacation properties dropped 11.2 percent from $169,000 in 2009 to $150,000 in 2010.
Other vacation home buyers cited the following factors as the most important reason to take the plunge into vacation home ownership last year, according to HomeAway® research:
- Wanted a personal family retreat (27%)
- Potential for price appreciation (12%)
- Low mortgage rates (11%)
- Other (13%)
“Vacation homes are more attainable than ever for consumers of all ages, thanks to attractive prices and the fact that people can rent them to travelers to help offset the costs,” says Brian Sharples, chief executive officer of HomeAway. “As the NAR report shows, about four in 10 buyers last year were under the age of 45.”
Vacation Home Owners Believe Rental Income Can Help Offset Mortgage on Second Home
Although few vacation home buyers cited rental income as the most important factor in their decision to buy last year, about seven in 10 buyers (69%) said it influenced their decision.
In fact, nearly all (94%) of vacation home buyers say they do plan to rent their property within the next 12 months to either long-term or short-term renters or a combination of the two, and 60 percent of buyers believe they’ll make enough rental income to cover at least half of their mortgage.
Of those buyers, about 44 percent plan to make their vacation homes available for rent between one and eight weeks over the course of the next year; 42 percent plan to rent their properties between nine and 26 weeks per year; and 15 percent plan to rent their homes between 27 and 52 weeks per year.
Vacation home buyers are willing to rent their property to more than one type of guest. The vast majority (74 percent) of people who plan to rent their property to short-term renters say they’ll rent the home to vacationers, while 36 percent plan to rent to business travelers and 23 percent plan to rent to other tenants, such as college students or people who are relocating to the area.
To see the complete survey results click here.
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