Vacation home sales declined by more than 30 percent in 2007 and home sales to investors fell more than 18 percent from the previous year, according to a report issued Friday by the NATIONAL ASSOCIATION OF REALTORS®.
MAKING SENSE OF THE STORY FOR CONSUMERS:
- Sales of primary residences dropped 10 percent nationally over the same period, so it is no surprise that second-home and investment purchases, which tend to be discretionary, would fall as well.
- Second home and investment property buyers also have faced the same disruption in the mortgage market that buyers of primary residences have faced. Mortgage credit tightened across the board during the last six months of 2007, creating a significant barrier to the completion of second- and investment-home sales.
- Despite the decline in sales, the median price of investment properties remained unchanged at $150,000 and vacation home prices fell by only 2.5 percent from 2006 figures to a median price of $195,000.
- Even with a softening in second/investment home sales, buyers remain optimistic: 80 percent of those surveyed by NAR in 2007 said they considered it a good time to invest in real estate.
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