2012 Vacation Home Sales Up, Investment Dips but Stays Elevated, Prices Rise

2012 Vacation Home Sales Up, Investment Dips but Stays Elevated, Prices Rise
WASHINGTON (April 2, 2013) - Vacation home sales improved in 2012, while investment purchases remained elevated for a
second consecutive year, according to the National Association of Realtors®.

NAR's 2013 Investment and Vacation Home Buyers Survey,* covering existing- and new-home transactions in 2012, shows
vacation-home sales rose 10.1 percent to 553,000 from502,000 in 2011. Investment-home sales declined 2.1 percent to 1.21 million from1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from2.79 million in 2011.

Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from2011, while the portion of
investment sales was 24 percent in 2012, down from27 percent in 2011, marking the second highest share since 2005.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales. "We had a strong stock
market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational
property is also a big draw," he said.

Yun notes an ongoing investor presence. "Investors have been very active in the market over the past two years, attracted
mostly by discounted foreclosures that could be quickly turned into profitable rentals," he said. "With rising prices and
limited inventory, notably in the low price ranges, investors are likely to step back in coming years."
The median investment-home price was $115,000 in 2012, up 15.0 percent from$100,000 in 2011, while 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.

All-cash purchases remain common in the investment- and vacation-home market: half of investment buyers paid cash in
2012, as did 46 percent of vacation-home buyers. Forty-seven percent of investment homes purchased in 2012 were
distressed homes, as were 35 percent of vacation homes.

Of buyers who financed their purchase with a mortgage in 2012, large downpayments remain typical. The median
downpayment for both investment- and vacation-home buyers was 27 percent, the same as in 2011.
Investment-home buyers in 2012 had a median age of 45, earned $85,700 and bought a home that was relatively close to their primary residence - a median distance of 21 miles, although 29 percent were more than 100 miles away. Thirty-five percent of investment buyers purchased more than one property.

"Property flipping modestly increased in in 2012," Yun said. "However, this isn't flipping in the sense of what took place
during the housing boom. Rather, investors generally are renovating and improving properties before placing themback on
the market to resell at a profit." 

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