AUSTIN, Texas, March 29, 2012 /PRNewswire/ — In a sign of an emerging recovery in the real estate market, sales of vacation homes in 2011 reached a four-year high, powered by the lowest median sales price in eight years, low mortgage rates, and the desire for a family retreat, according to proprietary research commissioned by HomeAway, Inc. as part of the National Association of Realtor’s (NAR) 2012 Investment and Vacation Home Buyers Survey®.
The research found 33 percent of vacation home buyers purchased a vacation property last year primarily because of low real estate prices, while another 30 percent cited the desire for a family retreat. And 2011 proved an opportune time to buy, according to the NAR survey, with the median sales prices for vacation properties at $121,300, putting ownership within greater reach of more consumers.
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:
“The purchase of vacation homes is moving back into the mainstream for a greater number of Americans who are attracted by low prices, rental income potential, and use as a retreat for busy families to get together every year,” says Brian Sharples, chief executive officer of HomeAway. “Although sales of vacation homes are not as high as historic levels, they are clearly showing signs of a sustained recovery.”
According to the NAR survey, 82 percent of buyers believe now is a good time to purchase real estate, and 39 percent say they are somewhat or very likely to buy vacation property within the next two years.
Vacation Home Owners Believe Rental Income Can Help Offset Mortgage on Second Home
Nearly all (91%) vacation home buyers say they plan to rent their property within the next 12 months to either long-term or short-term renters or a combination of the two. Of those buyers, 71 percent cited rental income potential as a factor in their purchase decision and nearly three-quarters (74.5%) of buyers believe they will make enough rental income to cover at least half of their mortgage.
According to Sharples, HomeAway research conducted in Q4 of 2011 of 4,905 owners listing their vacation homes on HomeAway’s U.S. sites show that 70 percent generate enough rental income to cover half or more of their mortgage, and 51 percent cover at least three-fourths of their mortgage.
Of those buyers intending to rent their property, about 40 percent plan to make their vacation homes available for rent between one and eight weeks over the course of the next year; 32 percent plan to rent their properties between nine and 26 weeks per year; and 27 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 majority (70%) of people who plan to rent their property to short-term renters say they’ll rent the home to vacationers, while 37 percent plan to rent to business travelers and 24 percent plan to rent to other tenants, such as college students or people relocating to the area.
|By the Numbers: Highlights from the NAR 2012 Investment and Vacation Home Buyers Survey|
|502,000 – Number of vacation homes sold in 2011 $121,300 – The median sales price of a vacation home in 2011, down 19% from 2010
38 – Percentage of vacation home buyers under the age of 45 $88,600 – Median household income of vacation home buyers
42 – Percentage of vacation home buyers who paid cash for their property
69 – Percentage of vacation home buyers who plan to own their property more than six years
33 – Percentage of vacation home buyers saying they are very or somewhat likely to buy another property within the next two years