Vacation Homes

Vacation homes: a booming trend
JIM BUCHTA
Minneapolis Star Tribune
Last update: May 26, 2007 – 10:17 AM

While primary home sales fell 4.1 percent last year, according to the National Association of Realtors, sales of vacation homes rose 4.7 percent to a record 1.07 million. They represented 14 percent of all real estate purchases, up from a 12 percent share in 2005.

What's driving that trend? Leisure-seeking baby boomers, who were younger and wealthier last year.

"The rise in vacation-home sales is based on strong demographic and lifestyle factors, with only modest interest in renting their properties to others," according to David Lereah, NAR's chief economist.

Here's a snapshot of the characteristics of 2006 second-home buyers and their purchases.

WHO ARE THEY?

Median age in 2006: 44

Median age in 2005: 52

Median household income 2006: $102,200

Median household income 2005: $82,800

Marital status: 78 percent married

WHERE ARE THEY?

Distance from primary residence: 215 miles

Closer than 100 miles: 42 percent

More than 500 miles: 32 percent

Rural areas: 29 percent

Resorts: 24 percent

Suburb: 22 percent

Urban area or central city: 10 percent

WHAT'S NEARBY?

Close to an ocean, river or lake: 66 percent

Close to recreational or sporting activities: 39 percent

Close to vacation or resort areas: 38 percent

Close to mountains or other natural attractions: 31 percent

THE DRAW

Beach, lake or water sports: 57 percent

Boating: 38 percent

Hunting/fishing: 32 percent

Golf: 21 percent

Biking, hiking or horseback riding: 20 percent

Ski/winter recreation: 17 percent

Tennis: 9 percent

WHAT ARE THEY BUYING?

Detached single-family house: 67 percent

Condos: 21 percent

Town houses/row houses: 8 percent

Other: 4 percent

New construction: 44 percent

WHY DID THEY BUY IT?

Family retreat: 79 percent

Diversify investments: 34 percent

Primary residence in future: 28 percent

Tax benefits: 25 percent

Use by family member, friend or relative: 22 percent

Extra money to spend: 21 percent

To rent: 18 percent

HOW MUCH DID THEY PAY?

Median price 2006: $200,000

Median price: 2005: $204,100

Paid cash: 25 percent

HOW MANY DO THEY HAVE?

One vacation home: 86 percent

Two homes: 12 percent

Three or more: 2 percent

55 percent said they were likely to purchase another one within two years.


JIM BUCHTA