The vacation home boom

Sales of vacation properties have soared the past five years, fueled by low interest rates, rising demand from retiring baby boomers, and a continuing interest in general for real estate as an investment.

A record 1.02 million vacation homes were sold in 2005, a little more than 12 percent* of all homes sold. That figure represents an increase of 16.9 percent over 2004. Economists have predicted that demand from baby boomers will continue to boost vacation-home sales for at least the next 10 years.

A 2006 survey of home owners throughout the western United States showed that owners of vacation homes fit one or more of the following profiles:

• Two-thirds of vacation home owners claim sole ownership of their property.

• More than 25 percent of owners of vacation homes own their getaway jointly with family or friends.
• While "boomers," those born between 1946 and 1962, continue to drive the vacation home market, a third of vacation home owners are under age 35.

Vacation homes are hot in the West

Once considered a luxury for the wealthy, vacation homes are now within the reach of many Americans. Over the past five years, western states have experienced some of the greatest home appreciation rates in the country. The tremendous increase in home values has made it possible for many people to use the equity in their primary residences to borrow money for vacation homes.

The vacation home survey, conducted by Windermere Real Estate, found that nearly one out of every six home owners in the West owns a vacation home as a second property.  For the majority of these people, their vacation homes aren’t pricey houses or condos in resort developments—their homes are smaller, less-expensive cottages and cabins that provide an escape from the bustle of everyday life.

The national median price for a vacation home in 2005* was $204,100.

Getaways closer to home

With fast-paced, activity-packed lifestyles, many people are opting for multiple, extended-weekend holidays in place of a two- or three-week vacations. This growing trend has translated into an increasing demand for vacation homes that are close to the home owner’s primary residence. The Windermere survey showed that 43 percent of vacation homes were within 100 miles of the owner’s primary residence.

Vacation homes aren’t just for aging boomers

As the Windermere survey found, a third of vacation home owners were under 35. And Windermere sales professionals report an increasing number of vacation home sales to young professionals and to young families. These buyers are looking for well-situated getaways they can escape to for three- or four-day mini-vacations at any time of the year.

When it comes to retirement, only 16 percent of survey participants said it was “very likely” that their vacation homes would become their primary homes in retirement.

Mixing business and pleasure

As the line between business and personal life continues to blur for many people, a growing number of vacation-home owners are spending nearly as much time at their weekend retreats as they are at their primary homes. Computers, faxes and cell phones allow those who have flexibility in their jobs to work almost anywhere, enabling these so-called “splitters” to transform what once may have been just a summer getaway into a true year-round second home.

More survey results

The Windermere survey also found that many vacation home owners share a number of other basic characteristics. For example, most vacation home owners have a vacation residence that is less than 200 miles from their primary home.

Other survey trends found in vacation home ownership are tabulated below:

Distance of vacation home from primary residence

Type of vacation home

Time spent at vacation home in the past year

Home rented when not in use

Likelihood the property will become their primary home when they retire

Have you been thinking about vacation property?

I have special training and knowledge to help you make the best, most-informed decision about what kind of vacation property will work best for you. I also can provide access to a number of resources to make it easier and less time-consuming to find the right property at the right price—plus information about pricing and financing options.

Whether you might be thinking locally or exploring other states, if I can't help you, I can connect you to other experts who can. Through years of experience as a real estate broker, I have developed professional contacts throughout many other parts of Oregon and several western states. Whether you're thinking about a cabin on the coast, a condo at Sun River, or a golf course home at PGA West in LaQuinta, Calif., I can make sure you get the help you need.

* Source:  National Association of Realtors®