Investing in a Vacation Destination
           
The North Carolina counties and communities showcased in this issue of NCCOAST Living are not only known as great places to live, they’re also known as great places to vacation. Beach houses, condos, townhomes and other waterfront or water-view homes are just some of the area’s properties that make for great full-time residences, as well as vacation rentals, second homes or vacation properties.

According to the 2007 National Association of Realtors’ Investment and Vacation Home Buyers Survey, vacation home sales rose 4.7 percent nationally in 2006 to a record 1.07 million. Vacation homes comprised an impressive 14 percent of all residential real estate transactions in 2006. These sales were supported by strong demographic and lifestyle factors, most notably an increased interest in obtaining recreational property for personal use. 
           
Notes David Lereah, the National Association of Realtors’ chief economist, "The demographics favor vacation-home sales because large numbers of consumers are in the prime buying ages, and buyers want recreational property for personal use – investment or renting is a secondary consideration."
           
The recent NAR survey reflects this sentiment. In listing the reasons for purchasing a vacation home property, 79 percent of buyers wanted to use the home for vacation or as a family retreat; 34 percent to diversify investments; 28 percent to use as a primary residence in the future; 25 percent for the tax benefits; 22 percent for use by a family member, friend or relative; 21 percent because they had extra money to spend; and 18 percent wanted to rent the property to others.
             
In terms of location, vacation home buyers many times chose a special getaway, purchasing homes a median of 215 miles from their primary residence. In the National Association of Realtors survey, 29 percent of vacation homes were purchased in rural areas, 24 percent in resort areas, 22 percent in a suburb and 10 percent in a central city. Sixty-seven percent of these purchased properties were detached single-family homes, 21 percent condos, eight percent townhouses, and four percent fell under the category of “other.”
           
The Southern U.S. was the top spot for vacation home buyers. That’s where 38 percent of survey respondents purchased properties. The Northeast and the West each accounted for 25 percent of vacation home purchases, while the Midwest accounted for 13 percent.
           
Leisure activities that vacation home owners said influenced their purchase included beach, lake or water sports at 57 percent; boating at 38 percent; hunting or fishing, 32 percent; golf, 21 percent; biking, hiking or horseback riding, 20 percent; ski or winter recreation, 17 percent; and tennis at nine percent.
           
Eighty-six percent of vacation buyers participating in the survey purchased one vacation home, 12 percent purchased two homes and two percent purchased three or more vacation properties. A quarter of vacation home buyers paid cash for their property, in comparison to 32 percent of investment buyers. An unusually high number of respondents in this survey, 44 percent, reported purchasing new homes or properties as a getaway destination. Many vacation property buyers were investing for the long haul, planning to keep their property for a median of 10 years; but the largest share of respondents said they planned to keep their vacation home for 11 years or more.                       
NAR's Investment and Vacation Home Buyers Survey, conducted in April 2007, includes answers from 1,412 respondents, reflecting 1,729 homes purchased during 2006. According to Real Estate Journal, whether for investment or vacation, second home purchases now account for a full 40% of all homes sold in America. It seems a lot of people are planning the perfect getaway.