Vacation Home Sales on the Rise and Closer to Home
Central Oregon has long been a premier vacation destination and by extension a desirable location to own a vacation home. The climate and abundant outdoor activities have been drawing vacationers for decades. In the late 1960′s and ’70s the construction of Sunriver, Seventh Mountain, and Black Butte Resorts provided the perfect platforms for people to buy vacation homes. These vacation communities were so successful that others such as Eagle Crest, Brasada, Pronghorn, Crosswater, and Caldera sprung up from the High Desert landscape to get a piece of the pie.
As it turns out, that pie wasn’t quite large enough to feed the newer resorts built during the boom years. The bursting of the real estate bubble in 2006 turned a lot of people off to owning vacation homes and many of the more recently constructed resorts still have an abundance of empty lots. However, a recent survey by the National Association of Realtors (NAR) suggests that vacation homes are once again coming into favor.
The NAR 2012 Investment and Vacation Home Buyers Survey, conducted in March 2012, shows that vacation home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. They accounted for 11 percent of all real estate transactions in 2011. The rise in sales of vacation homes* has been driven by low prices and historically low interest rates and it appears that those two factors are allowing buyers with lower incomes to get into the game. According to the NAR study, the average annual income of vacation home buyers declined to $88,600 in 2011 from $99,500 in 2010.
Buyers with lower levels of income factored together with gas prices hovering at $4/gallon and rising airfares supports another finding of the survey. Vacation homes bought in 2011 were closer to the owner’s primary residence (305 mile median distance) than they had been since 2006 when NAR first began collecting this data (WSJ). On average that’s about a five hour drive. Any point on the Oregon I-5 Corridor from Portland to Medford is less than 3.5 hours from Bend.
We have seen home buying activity in Central Oregon similar to that outlined in NAR’s survey. The market is dominated by investors but the number of people buying vacation homes is definitely on the rise. Because of this we have added a new service to help our clients who buy vacation homes but don’t want to rent them out. So many of them asked us if we would check on their vacation homes weekly and coordinate repairs and landscaping that we decided we should formalize the service. So we created our Second Home Management Service. This service is designed to protect your valuable asset and take the worry out of not being able to check it yourself. Everything about the service, from what we check to how often we check it, can be customized to meet your needs.
* Vacation homes are defined by the survey as recreational property purchased primarily for the buyer’s (or their family’s) personal use. Vacation homes available for rent were counted as investment properties. The survey includes answers from 2,241 usable responses about home purchases during 2011.