Sales of investment and vacation homes jumped in 2011, with the combined market share rising to the highest level since 2005, according to the National Association of Realtors (NAR).
NAR's 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged 64.5% to 1.23 million last year, up from 749,000 in 2010. Vacation-home sales rose 7% to 502,000 in 2011, up from 469,000 in 2010. However, owner-occupied purchases fell 15.5% to 2.78 million.
Vacation-home sales accounted for 11% of all transactions last year, representing a 1% increase from 2010, while the portion of investment sales jumped to 27% in 2011 from 17% in 2010.
‘During the past year, investors have been swooping into the market to take advantage of bargain home prices,’ says Lawrence Yun, NAR's chief economist. ‘Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.’