Sales of vacation homes plunged last year, but purchases of investment properties jumped, according to the National Association of Realtors’ 2017 Investment and Vacation Home Buyers Survey.
Vacation home purchases last year fell to 721,000, down 21.6 percent from 2015’s 920,000 sales and the lowest level since 2013’s 717,000 sales, NAR said Tuesday.
Investment sales in 2016 rose to 1.14 million homes, up 4.5 percent from 1.09 million in 2015.
A lack of inventory drove up median sales prices. The median price of a vacation home price was $200,000, up 4.2 percent from 2015’s $192,000. The median price of an investment home sales reached $155,000, up 8 percent from 2015’s $143,500.
With home prices steadily rising, an increasing share of second-home buyers financed their purchase last year. The share of vacation buyers who paid fully in cash diminished to 28 percent (38 percent in 2015), while cash purchases by investors decreased to 35 percent from 39 percent in 2015 and 41 percent in 2014.
NAR’s survey didn’t break out sales by state or metro area, but it said the South is the most popular destination for buyers of vacation homes. The findings are based on a survey of 2,099 people who bought real estate in 2016.