Vacation home sales rise

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The Associated Press

updated 6:34 p.m. ET, Wed., March. 31, 2010

WASHINGTON - Vacation home sales recovered last year while investment property sales fell sharply, according to the National Association of Realtors.

Vacation home sales rose 7.9 percent to 553,000 from 513,000 in 2008, according to a recent survey by the trade association. Investment home sales fell 15.9 percent to 940,000 in 2009 from 1.12 million in 2008, the group said.

That bodes well in today's economy, as the country emerges from recession.

"The typical vacation home buyer is making a lifestyle choice," said National Association of Realtors Chief Economist Lawrence Yun in a statement. He added that nine out of 10 buyers say they intend to use the property for vacations or as a family retreat.

Investment buyers, on the other hand, primarily seek rental income, he said. Six out 10 investors plan to rent to others, Yun added.

The market share of homes purchased for investment was 17 percent in 2009, down from 21 percent in 2008, while the vacation home share rose a percentage point to 10 percent.

The total share of second homes declined from 30 percent of sales in 2008 to 27 percent last year, according to the survey, which covered existing and new home transactions in 2009.

"First-time buyers were at record levels in 2009 with fewer sales of second homes," Yun said.

The median transaction price of a vacation home was $169,000 in 2009, compared with $150,000 in 2008.

The survey also found that half of vacation homes purchased last year were in the South, 21 percent in the West, 17 percent in the Midwest and 12 percent in the Northeast. Seven out of 10 were detached single-family homes.

Meanwhile, the median investment property sold for $105,000 last year, down 2.8 percent from $108,000 in 2008.