Vacation, investment sales surge behind cash buyers

Sales of recent investment and vacation homes has skyrocketed with the combined market share rising to the highest level since 2005, according to the National Association of Realtors

NAR’s 2012 Investment and Vacation Home Buyers Survey, shows investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010.

“During the past year investors have been swooping into the market to take advantage of bargain home prices,” said Lawrence Yun, NAR chief economist “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

All-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers.

Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.