US vacation-home sales tumble from record as bargains dry up

[BOSTON] Sales of US vacation homes tumbled last year from record levels as buyers were held back by tight inventory and turbulence in financial markets.

An estimated 920,000 vacation properties changed hands, down almost 19 per cent from a high in 2014, according to a survey released Wednesday from the National Association of Realtors. By comparison, sales of primary owner-occupied homes jumped 16 per cent to 3.74 million, the highest level since 2007, the group said.

Second-home buyers - often baby boomers at or close to retirement - are competing for a dwindling number of properties, driving up prices and limiting transactions, said Lawrence Yun, chief economist of the Realtors group. Stock- market gyrations in the second half of the year also may have unsettled would-be purchasers.

"Tight supply and higher prices gave pause to some vacation-home buyers, as well as wobbles in the stock market," Yun said in an interview. "There were far fewer bargains to be had." The median sales price of vacation properties jumped 28 per cent to US$192,000, with the strongest appreciation in several Florida markets. Rising prices probably squeezed out less affluent households, the Realtors said.

The median household income for vacation-home buyers rose to US$103,700 from US$94,380 in 2014.

The Realtors characterize vacation homes as recreational property primarily purchased for personal use. The homes accounted for 16 per cent of all transactions in 2015, down from 21 per cent a year earlier. It was the second-highest share since the survey was first conducted in 2003.

Sales of investment properties - those purchased to rent to others - climbed 7 per cent in 2015 to 1.09 million homes. The portion of investment home purchases was unchanged from a year earlier at 19 per cent.

The Realtors' data are based a survey conducted in March of a sample of households that had purchased homes in 2015. The group received responses from more than 2,000 adults.

BLOOMBERG