The sale of second homes, including vacation and investment properties fell to 33 percent of all transactions in 2007, down from 36 percent a year earlier, according to a report from the National Association of Realtors.
The market share for investment properties was 21 percent, down from 22 percent in 2006, while vacation homes made up 12 percent of sales, a two percent decline from a year earlier.
Vacation-home sales dropped 30.6 percent to 740,000 last year from a record 1.07 million in 2006, while investment-home sales fell 18.1 percent to 1.35 million last year from 1.65 million, according to NAR’s annual Investment and Vacation Home Buyers Survey.
The financing of vacation homes and investment properties became increasingly difficult over the last year and change with options like 100% financing disappearing, forcing many would-be speculators out of the market.
The median price of a vacation home last year was $195,000, down 2.5 percent from $200,000 in 2006, while the average investment property had a price tag of $150,000, unchanged from 2006.
Fifty-nine percent of vacation homes purchased in 2007 were detached single-family homes, 29 percent were condos, 7 percent townhouses or rowhouses, and 5 percent other.
Sixty-one percent of investment homes purchased in 2007 were detached single-family homes, 20 percent were condos, 11 percent townhouses or rowhouses, and 8 percent other.
Roughly two thirds of vacation home buyers and 71 percent of investment home buyers purchased existing homes, with the remainder purchasing new homes.
Nearly one in four investment properties purchased last year were in the Northeast, 19 percent in the Midwest, 38 percent in the South and 21 percent in the West.
Interestingly, eight in 10 second-home buyers consider now a good time to invest in real estate, and 44 percent of vacation-home buyers and 57 percent of investment buyers said they were likely to purchase another property within two years.