Investors who can afford to make a foray into the vacation market are labeling conditions as “the perfect storm” at the moment – low mortgage rates, falling values and increased affordability – all of this is providing a growing number of opportunities for those in the market for a second home.
Last week, the National Association of Realtors said that a survey, first reported in MSNBC, showed sales of vacation homes had jumped by almost 7% during 2011. Why so many second home buyers? Well, at least 33% of those who responded when questioned in the NAR survey pointed to the low cost of real estate right now. Interestingly, of those who purchased a second home, a massive 91% say they plan to rent out their new property, with 71% saying that the potential income from rent was one of the biggest motivations for buying a vacation home.
Over the last few years, it’s possible that many of those interested in buying a second home were simply sitting on the fence, waiting for the right time to pounce and get the best possible deal. And it seems as if many have since decided that there’s no time quite like the present, according to industry experts.
Of those second home buyers, a growing number are buying in cash as well. According to the NAR survey, 42% of vacation homes purchased last year were fully paid for in cash.
In addition, buyers of vacation homes are not limiting themselves to the traditional beach resorts and ski resorts of old, according to NAR spokesman Walter Molony:
“Many are in lesser-well-known areas, places known mainly on a regional basis. Places such as Gatlinburg, Tenn.; Brown County, Ind.; and Williamsburg, Ky. are seeing growing attention from buyers in vacation-home purchases.”
Molony added that “name destination resorts” are only a small part of the picture in the vacation homes market, before speculating that many second-home owners would rather buy somewhere within easy reach of their primary home.