Vacation and Investment Property Sales Strong Despite Market Troubles

Hundreds of thousands of American homeowners may be in desperate straits, facing crippling rate resets or worse, foreclosure, but others continued to purchase vacation homes and investment properties at a healthy rate.

According to a study released late last month by the National Association of Realtors® (NAR) such second-home sales declined with the overall market in 2007, but second home sales still accounted for 33 percent of all new and existing home sales. The combination of these two sales accounted for 36 percent of the total in 2006.

21 percent of all homes purchased in 2007 were for investment purposes compared to 22 percent the year before. An additional 12 percent of the home purchases were vacation homes, down from 14 percent in 2006.

In terms of numbers, the Investment and Vacation Home Buyers Survey showed that the total number of primary sales declined 10 percent to 4.34 million in 2007 from 4.82 million the year before. Vacation home sales dropped 30.6 to 740,000 from what had been a record-setting 1.07 million homes in 2006. Investment property sales accounted for 1.35 million transactions compared to 1.65 million in 2006, a drop of 18.1 percent.

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