As we’ve stated in previous articles, Americans are purchasing vacation real estate, second homes and recreational property at a more rapid rate than in recent years. From Minnesota to Southern Florida, Americans are once again pursuing vacation property while the conditions are right. Several market factors can help explain this strong demand and trends point to a continued increase in discretionary real estate spending in the near future.
We know a mix of growth in equity markets, pent-up demand, stronger consumer confidence in the real estate market, stronger consumer personal financial health, historically low mortgage rates and more realistic pricing have driven this resurgence in vacation real estate purchases, but who is buying this property?
According to a recent National Association of Realtors survey, the following information describes these vacation or second-home buyers:
- Their average age is 43 years old
- Their median household income was $85,600
- 33% said they were likely to purchase another vacation home within two years
- More than 8 out of 10 second-home buyers said it was a good time to buy
Our analysts have been tracking similar statistics to the NAR report about who is buying these properties, but we have spotted unique characteristics of the recreational property buyer. Our recreational real estate buyers are typically cash buyers and able to put down more than 30% on these transactions or pay 100% cash. That said, United Country Real Estate has a strategic partnership with one of the strongest land finance groups in the U.S., and has also been able to help more buyers secure land and second-home financing if needed.
Additionally, auctions play a large part in real estate transactions in the rural areas of America, and recreational property is no exception. “Using the blended model of auctions and traditional real estate services gives us a marketing advantage that other brokerages simply can’t offer,” said Mike Jones, president of United Country Auction Services. “This process provides an incredibly transparent transaction, which when properly marketed, reveals the true market value of a property. Being able to leverage both traditional and auction marketing methods gives our national network of brokers, agents and auctioneers the competitive edge needed in today’s ever-changing vacation, second home, recreational and land marketplace.”
As the leader since 1925 in lifestyle, small city and town, country and lifestyle real estate nationwide, United Country Real Estate is predicting continued stability, strength and growth in non-urban real estate. These markets were more stable during the recession and have rebounded strongly over the last few years. Stop by our office and we can discuss what trends we are seeing in the property you own or are interested in considering in the future.