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June 2017   Volume 43, Number 6      
 

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Purchases of Vacation Homes Declined for Second Straight Year in 2016

In 2016, purchases of vacation homes declined for the second straight year, as price growth and financial uncertainty crippled demand, the National Association of Realtors (NAR) reported in its 2017 Investor and Vacation Home Buyer Survey.

Yet investment home sales increased over the same period with more investors turning to financing and choosing to rent out more of their properties on a short-term basis.

Vacation home sales in 2016 declined by 21.6 percent from 2015 to 721,000, according to the survey. That followed a 2015 year-over-year drop of 18.5 percent, meaning that vacation home sales have declined by 36 percent in the last two years.

“With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year.” said NAR Chief Economist Lawrence Yun in a statement.

Financial market volatility also hurt vacation home sales as some affluent households opted not to buy or delayed plans until after the election.

However, the decline in vacation homebuyer demand did not impact home prices. Anemic housing supply drove up prices for vacation and investment homes in 2016 to levels that had not been seen in roughly a decade. The median vacation home price rose to $200,000, an increase of 4.2 percent from 2015 and the highest since 2006.

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In this issue:

Virtual Reality Shakes Up Real Estate

All-cash Chinese Buyers Disappearing From U.S. Real Estate Markets

Consumer Confidence Falls after Record High

Immigrant Households Impact Success of Real Estate Market

Multifamily Construction Loans Are Getting Harder for Developers to Find

Survey NAR Survey Finds Increase in Consumer Confidence in the Midwest and Rural Areas

Purchases of Vacation Homes Declined for Second Straight Year in 2016

Rising Home Prices Drive Up Homeowner Debt

The 10 States Investing the Most in Commercial Real Estate

How Sellers Can Avoid the Downsides of Hot Real Estate Markets


 


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