More Buyers See Opportunity in Vacation Homes

Some buyers are calling the vacation-home market the “perfect storm,” — falling home values, low mortgage rates, and increased affordability — which is prompting more opportunity in the second-home market.
The National Association of REALTORS® reported last week that vacation home sales increased 7 percent in 2011 over the prior year. Of those surveyed, 33 percent of the vacation home owners surveyed say they purchased a home because of the low real estate prices. Also, 91 percent reported they plan to rent out their second home purchase in the next year. Seventy-one percent say the higher rental income potential from investment properties helped motivate their purchase.
Many second home owners may have been sitting on the sideline, waiting for the perfect time to pounce on bargain prices, but are seeing that time as now, housing experts say. And more buyers are making all-cash purchases, too: 42 percent of vacacation-home buyers paid cash for their home, according to the NAR survey.
Vacation home buyers are also looking past popular beach or ski resorts to make their purchase, says Walter Molony, spokesman for the National Association of REALTORS®. "Many are in lesser-well-known areas, places known mainly on a regional basis,” says Molony, adding that places such as Gatlinburg, Tenn.; Brown County, Ind.; and Williamsburg, Ky. are seeing more attention from buyers in vacation-home purchases.
“Name destination resorts are only a component of the picture,” Molony told MSNBC.com. “Most people want to be within an easy drive of their [vacation] home.”
Source: “‘Perfect Storm’ Encourages Sales of Vacation Homes,” MSNBC.com (April 4, 2012)