U.S. vacation-home sales jumped in 2013, making up the biggest market share in seven years, as the surging stock market gave affluent Americans a confidence boost.
Vacation properties accounted for 13 percent of all sales, the highest level since 2006, when the share was 14 percent, the National Association of Realtors reported today. The portion of investment sales, excluding purchases by institutional investors, fell to 20 percent from 24 percent in 2012 as prices rose and the supply of foreclosures dwindled.
"Growth in the equity markets has greatly benefited high- net-worth households, thereby providing the wherewithal and confidence to purchase recreational property," Lawrence Yun, the Realtors group's chief economist, said in a statement.
The Standard & Poor's 500 index, which reached an all-time high yesterday, was up 179 percent from its 12-year low in March 2009. Vacation-home sales rose 30 percent last year to 717,000, while investment-home sales fell 8.5 percent to about 1.1 million transactions, the Realtors group said.
Sales of seasonal properties are down about a third from the 2006 peak of 1.07 million.
About 38 percent of vacation-home buyers paid with cash in 2013, compared with 46 percent of investment buyers, according to the report. Distressed homes, including foreclosures, accounted for 42 percent of purchases by recreational buyers and 47 percent by investors.
The typical vacation-home buyer was 43 years old with a household income of $85,600, and the property was a median distance of 180 miles (290 kilometers) from the primary residence, the Realtors group said. About 41 percent of seasonal properties purchased last year were in the South, followed by 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest.
The U.S. has 8 million vacation homes and 43.7 million investment units, compared with 74.7 million owner-occupied units, according to an analysis of Census Bureau data by the Realtors group.