NAR: 2nd-Home Sales Set Records in '05

Sales of vacation and investment homes hit record highs last year and together accounted for nearly 40% of residential transactions, according to the National Association of Realtors.In an annual report based on two surveys, the NAR said 27.7% of all homes purchased in 2005 were investment properties and 12.2% were vacation homes. Vacation-home sales rose 16.9% to a record 1.02 million units last year from a downwardly revised 872,000 in 2004, the NAR reported. Investment-home sales climbed 15.7% to a record 2.32 million from an upwardly revised 2.00 million. NAR chief economist David Lereah cited several factors that made 2005 so favorable for the second-home market. "To begin with, the baby boom generation is driving second-home sales," he said. "They're at the optimum point in life when people become interested in second homes, they're at the peak of their earnings, interest rates remain historically low, and boomers want to diversify investments." The association can be found online at http://www.realtor.org.