The number of people buying vacation and investment homes fell 30 percent last year, according to the National Association of Realtors.
But, those who are buying are doing so with cash – with more than four out of 10 investment buyers and more than three in 10 vacation home buyers coming to the table with money up front.
“We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” said Lawrence Yun, NAR chief economist, in a news release. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”
The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while an additional 9 percent were vacation homes, down from a 12 percent market share in 2007, according to NAR.
And as with the market for primary residences, second-home prices were also down significantly.
The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007.
The typical investment property cost $108,000 last year, which is 28 percent below the 2007 median of $150,000, according to NAR.
Among other findings:
– The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence.
– Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
– Twenty-six percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb and 8 percent in an urban area or central city.
– Twenty-eight percent of investment homes were purchased in a suburb, 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town and 6 percent in a resort area.
– Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or row houses and 7 percent other.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or row houses and 6 percent other.
The survey, conducted in March, includes answers from 1,924 usable responses.