Second Homes Now Mainstream
Why Have One House When You Can Have Two?
Vacation houses and rentals accounted for more than a third of home sales in 2004, study finds.
By Sarah Max, CNN/Money senior writer
Where The Second Homes Are Located
According to a study released by the National Association of Realtors on Tuesday, second homes accounted for more than a third of residential real estate transactions in 2004.
Second homes typically fall under the category of vacation home or rental property, though many owners of vacation homes also rent out their property.
Still, about 23 percent of houses bought last year fell into the category of investment property, meaning that owners use the house primarily as a rental property. The number of sales in this segment increased 14 percent last year.
Vacation homes used primarily by the owners represented 13 percent of transactions last year, with the number of sales in this segment increasing nearly 20 percent.
“Our definition of second homes has changed with the buyer shift toward investment property,” said the NAR’s chief economist David Lereah. “In examining Census data to determine the number of investment units, we see that second homes are a much larger share than the conventional mind-set of them being mostly vacation homes.”
This is the first time anyone has come up with a methodology for capturing a representative market share for vacation and investment homes, he said.
Who’s Buying What?
The typical person buying investment rental property is 47 years old and earned about $86,000 in 2003, according to the NAR, while the typical vacation-home buyer is 55 years old and earned $71,000.
