Vacation-Home Sales Plummet 31%
More ugly Real Estate news:
Each year, the National Association of Realtors (NAR) puts out a survey of Investment and Vacation Home Buyers. As is their congenital compulsion, the trade group spun the data to somehow make it appear less negative: "Second-Home Sales Accounted For One-Third of Transactions in 2007".
As if Vacation Home "market share" is a significant statistic.
Puh-leeze.
The data point we are always interested in are the year over year, NSA, sales. In 2006, 1.07 million vacation homes were sold -- a record number. In 2007, second home sales had fallen 31% to 740,000, according to NAR data. The median price of a vacation home was $195,000 in 2007, down 2.5% from $200,000 in 2006.
2007 also saw speculators exiting the housing market: Homes bought purely for investment dropped 18% to 1.35 million last year, compared with 1.65 million in 2006. That is versus a 10% decline in primary-residence sales, (2007 = 4.34 million, down from 2006 = 4.82 million)
59% of vacation homes purchased in 2007 were detached single-family homes, 29% condos, 7% townhouses or rowhouses, and 5% other. In 2006, single family homes were 8% higher (67%) and condos 8% lower (21%). This suggests that some vacation home buyers are shifting towards purchasing smaller, less expensive properties. Perhaps the aforementioned decline in speculative purchases was also a factor in this shift.
Lastly, the typical vacation-home buyer in 2007 was 46 years old, had a median household income of $99,100, and purchased a property that was a median of 287 miles from their primary residence.
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Sources:
Second-Home Sales Accounted For One-Third of Transactions in 2007
NAR, March 28, 2008
http://www.realtor.org/press_room/news_releases/2008/second_home_sales_accounted_for_one_third.html
Vacation-Home Sales Plummet
Amy Hoak
WSJ, March 28, 2008
http://blogs.wsj.com/economics/2008/03/28/vacation-home-sales-plummet/
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Saturday, March 29, 2008 | 06:38 AM | Permalink
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Comments
Here on Cape Cod, a major vacation home locale, the real estate market is moribund. In our small town, the local assessor said she had not seen a building lot change title in over a year and home sales are way down, inventory way up (except for water-view). Example: new non-water-view 5-bedroom spec house on the market for > 2 years. Original asking: 1.4 million; last year reduced to 999k; now "pre-foreclosure price" - 750k.
Posted by: mind | Mar 29, 2008 6:52:38 AM
I wonder how many of the "second homes" were condos in Miami...
There was probably a bit of speculation going on in what are classified as vacation homes.
Posted by: SRQ | Mar 29, 2008 8:46:04 AM
Why don't you just, "pull up a chair and sit on the floor!" Uncle Hub...it was wise old guys like my uncle that made me realise early, people just love to try to live beyond their means...
Posted by: JustinTheSkeptic | Mar 29, 2008 9:03:38 AM
That's a long way to travel every other weekend, what with the price of fuel.
Posted by: Old Ari | Mar 29, 2008 9:08:10 AM
I'm guessing it's harder to get a mortgage for this type of purchase.
Posted by: Mel | Mar 29, 2008 11:04:06 AM
To make up the tax shortfall from declining sales, California legislators have introduced a bill to levee property taxes on tents, cardboard boxes, and the 1968 VW van.
Posted by: Winston Munn | Mar 29, 2008 11:27:05 AM
Hubby's car is in the shop and we have one of those big Chrysler boats as a rental. You could sleep six in that thing. I joked next time we vacation we should just rent one and sleep in it.
Posted by: donna | Mar 29, 2008 1:00:16 PM
I remember when you had to be rich to afford a vacation home. In the past few years, you could just take out a subprime loan & live beyond your means.
Posted by: David | Mar 31, 2008 9:24:49 AM
This article raises a good question:
How many of the reported ~3.5 million excess homes built over the past decade were boomers getting ready for retirement versus speculators?
The answer could have a meaningful impact on the timing of the recovery. Or is this just wishful thinking?
Thoughts?
Thanks, K3
Posted by: K3 | Mar 31, 2008 2:26:36 PM
RE the vacation home: For this new year of 2008--is there capital gains tax forgiveness on vacation homes sales like there is for stocks? If someone has a camp in NYS and lives in, say, FLA, there would be a 15% capital gains tax on gain plus, I think, 7.7% NYS tax because you are an out of state resident. Then the real estate agent fee--don't forget that. Ouch. But no one has been able to answer the question about the gains forgiveness for a 2008 sale.
Posted by: lond | Apr 15, 2008 10:07:02 PM
