Tags: Vacation | home | sales | NAR

NAR: Vacation Home Sales Soared Last Year

By    |   Friday, 04 April 2014 11:22 AM

Vacation home sales are on the rise, as wealthy households benefit from the torrid stock market rally and appreciating home prices spark enthusiasm about the housing market.

Sales of second homes for part-time, personal use leaped 30 percent in 2013 to 717,000 homes, according to the National Association of Realtors (NAR).

To be sure, the overall level still trails the 1.1 million total of 2006, The Wall Street Journal reports. But it reflects a shift in attitude about the residential real estate market, where bearishness prevailed just 2 ½ years ago.

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Vacation home sales accounted for 13 percent of all transactions last year, their highest market share since 2006, according to the NAR. In addition, the median vacation home price was $168,700, up 12.5 percent from $150,000 in 2012, and 38 percent of vacation homebuyers paid with cash.

Economists tell The Journal that sentiment was affected by last year's surge in stock and housing prices. The S&P 500 Index jumped 29.6 percent in 2013, and the S&P/Case-Shiller index of home prices in 20 cities advanced 13.4 percent.

"The housing market is in full-blown recovery mode," Joseph LaVorgna, chief U.S. economist for Deutsche Bank, tells The Journal. "People are much more confident in the sector as a long-term investment [as shown by] their decision to purchase an extraordinarily discretionary item, a second home."

As for the stock market, "growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property," said Lawrence Yun, NAR's chief economist.

"However, vacation-home sales are still about one-third below the peak activity seen in 2006."

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Vacation home sales are on the rise, as wealthy households benefit from the torrid stock market rally and appreciating home prices spark enthusiasm about the housing market.
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2014-22-04
Friday, 04 April 2014 11:22 AM
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