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Vacation home sales took off last year. This could either be a sign of a new housing bubble, or just a show of confidence that the economy has improved, people have less debt and more job security, and they will risk the cost of owning a second home. Whatever the reason, the trend should give the overall housing market a lift — as if, based on other research, it needs one.
The National Association of Realtors issued its 2013 Investment and Vacation Home Buyers Survey. The bottom line take from the data covering: “existing- and new-home transactions in 2012, shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011.”
The new demand came at a price last year: “the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.”
Poor people have stopped selling their vacation homes. And the people who are selling homes need to and can rely on buyers who are very well off: “The typical vacation-home buyer was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence.”
So, add to the home price a long, expensive drive or airplane flight.
The focus of real estate purchasing has centered on homes people live in full time. Case-Shiller data measure the price activity in the top 20 metro markets by population. Home price and sales data nationwide are, by their nature, made up mostly of primary residences because these remain, by far, the majority of the inventory. But some group of buyers has begun to take what is a fairly long risk — spending six figures on homes that, during the recession, were hard to sell.
When risky behavior comes back into the market and the pace of the race for second homes spikes up, the recovery of housing has moved to another level. It will not take much of a new dip in housing for buyer’s remorse to set in, at least among these buyers.
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