Second Home Purchasers Accounted for 40% of Home Sales in 2005
“Fueled by baby boomers at the peak of their earning power, investors or those wanting a second or vacation house bought four out of every 10 homes sold last year, the National Association of Realtors reported yesterday�
This was reported in the San Diego Union-Tribune, which examines the impact of investor purchases of second homes in the San Diego area, one of the highest price housing markets in the nation.
The article quotes David Lereah, chief economist of the National Association of Realtors, as saying that baby boomers account for the surge in purchases of second homes. “To begin with, the baby-boom generation is driving second-home sales. They're at the optimum point in life when people become interested in second homes,� he said. “They're at the peak of their earnings, interest rates remain historically low, and boomers want to diversify investments.�
From the perspective of vacation rentals owners, this trend means that there are thousands of additional vacation rentals that will soon hit the markets. As the housing boom fades, many speculators will find it necessary to hold on to their properties for a long period of time rather than flip them for a quick gain.
The more financially astute among them will decide that the best way to hold on to properties in a desirable vacation area is to turn them into vacation rentals. This means that in many areas existing vacation rentals owners will face more competition. They will have to more aggressively market and promote their properties in ways that are explained in our Vacation Rentals Newsletter.
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