A large number of people who’ve dreamed of buying a vacation home near the beach, beside a lake, in the mountains, or in the center of a resort city have fulfilled their dreams despite the economic downturn.
In fact, it’s been the downturn that ironically made it easier for them to reach their home ownership dream. The dramatic drop in home prices, the sharp fall in mortgage rates, and the overwhelming surge in vacation home listings made their home purchases possible.
Last year, more than 500,000 people in the U.S. bought vacation homes, according to the National Association of Realtors. They purchased them not only to give their families opportunities for satisfying vacations, but also to have an additional source of income. Vacation homes are strong generators of rental revenues as their rental rates can be increased to higher levels at certain times of the year.
According to HomeAway and other operators of vacation rental websites, owners of vacation homes can earn more than $35,000 annually if they rent out their homes for about 20 weeks each year. They say the rental income can help cover a big portion of the mortgage, including repairs and other maintenance costs. One sign of the growth of the vacation rental industry is the growth of online vacation rental operators. HomeAway, for instance, who started in 2005 now holds over 540,000 listings of vacation homes.
The double-benefit from vacation homes is so enticing that more people in their forties are acting on their dreams of buying their own vacation homes. NAR says that almost 50 percent of all vacation home buyers last year were younger than 45 years. Over the years prior to 2009, it has been mostly the baby boomers who were buying vacation homes. seattle vacation rentals has had a surge since the early 2000’s rising to 35% inventory.
The drop in the income levels of people buying vacation homes is also an indication that these homes have become affordable to more buyers. Last year’s data showed that the median income of vacation home buyers dropped from $99,100 in 2008 to $87,500 last year.
Homes in coastal communities, mountains and downtowns continue to be popular among vacation home buyers. Last summer, the five top destinations for vacationers according to HomeAway were:
- Orlando, Florida
- New York City
- Cape Cod, Massachusetts
- Miami, Florida
- Myrtle Beach, South Carolina
All the same, vacation homes in other cities also have great revenue potential. Other factors that attract tourists and vacationers to certain destinations are the abundance of arts centers, natural parks, fishing and boating opportunities, the unique culture of the place, and the tranquility of small towns. A thorough research with the help of a real estate professional experienced in the city one is targeting will yield a vacation home that’s a fulfillment of one’s dream.