Vacation Homes Sales Highest Ever in 2014

Sales of vacation homes reached record-highs in 2014 while investment purchases fell for the fourth straight year, according to an annual survey of residential homebuyers released by the National Association of Realtors® (NAR). NAR's 2015 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2014, revealed vacation-home sales catapulted to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013. Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida, said that sales of vacation homes remain steady on the Emerald Coast.

“There’s always been a great deal of interest in vacation homes in this area and a lot of it stems from tourism,” he said. “People travel to this area for vacation and end up wanting to move here, either year-around or just during the winter season. Whether it’s a vacation home for personal use or investors interested in rentals, it’s thriving here.”

Investment-home sales in 2014 declined 7.4 percent to an estimated 1.02 million in 2014 from 1.10 million in 2013. Owner-occupied purchases fell 12.8 percent to 3.23 million last year from 3.70 million in 2013. The sales estimates are based on responses from nearly 2,000 U.S. adults who purchased a residential property in 2014, and exclude institutional investment activity. Vacation-home sales accounted for 21 percent of all transactions in 2014, their highest market share since the survey was first conducted. The portion of investment sales fell to 19 percent (20 percent in 2013); owner-occupied purchases declined to 60 percent (67 percent in 2013).

“As the economy continues to improve, there continues to be a strong demand for vacation homes and vacation rentals,” Barrett added. “The rise in home prices are giving buyers the assurance that vacation homes are a lucrative long-term investment. Baby boomers are also getting closer to retirement age and considering buying vacation homes with the intent of converting them into a primary residence in several years.”

The median sales price of both vacation and investment homes declined in 2014. The median vacation home price was $150,000, down 11.1 percent from $168,700 in 2013. The median investment-home sales price was $125,000, down 3.8 percent from $130,000 a year ago.