Second-Home Market Share Declines

Purchases of second homes accounted for 33% of all home sales in 2007, down from 36% the previous year, according to the National Association of Realtors. Sales of vacation homes fell 30.6% to 740,000 in 2007 from a record 1.07 million in 2006. The median price of a vacation home fell 2.5% to $195,000. At the same time, sales of investment properties declined 18.1% to 1.35 million last year. The median price of an investment house was unchanged, at $150,000. NAR chief economist Lawrence Yun said the numbers suggest that the two sectors have undergone different cycles in the past two years. "Investment home sales declined sharply in 2006 as speculators disappeared, leaving the market to serious buyers, with the pattern continuing in 2007," he said. "Vacation home sales rose to a new record in 2006 because there was a pent-up demand from buyers who couldn't find a property as a result of tight supplies in preceding years." The NAR can be found online at http://www.realtor.org.