NAR’s recently released 2017 Investment and Vacation Home Buyers Survey shows a 21% drop in homes purchased for vacation purposes and a 4.5% increase in investment purchases for 2016. Soaring home prices in many regions – chiefly the south and west – have made finding a vacation home more difficult as much of the inventory that would previously have been a prime target for vacation buyers has turned into primary residences or investment properties. Investors are also being drawn to a strong short-term rental market, crowding out vacation buyers and driving second home sales to its lowest percentage of the market since 2012 (12%). The most popular markets for vacation home purchases were the South and the West.
What Does this Mean For Cape Cod?
These trends reflect what we are seeing locally in the Cape Cod market, with limited inventory leading to a spike in home prices. While Cape Cod remains a strong second home market, rising prices are limiting mobility and influencing purchasing decisions.
- 44% of investors did or tried to rent their property in 2016
- 29% of vacation buyers did or tried to rent their property in 2016
- Vacation buyers typically earned $89,000 in 2016
- Investment buyers typically earned $82,000 in 2016
- Top two reasons for buying a vacation home:
- For use as a vacation home or family retreat (42%)
- Future retirement (18%)
- Top two reasons for buying an investment home:
- Generating income through renting (42%)
- Potential price appreciation (16%)
In addition, it is important to look at trends and where people are likely to buy based on the area where you are targeting them. Here is a snapshot of how far from their house a vacation and investment buyer is likely to purchase a home is:
Download the entire 2017 NAR Investment & Vacation Home Buyer’s Survey below.