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Vacation home sales improved in 2012 according to National Association of Realtors® survey. Second homes are a significant component of a rising Flagstaff home sales market

The real estate market in Flagstaff includes a significant share of second homes. If you lived in Phoenix or Scottsdale, wouldn’t you want to have a getaway to the mountains in a town? Especially one with so many fun things to do? The number of second home buyers in Flagstaff was significantly reduced by loss of home equity in Phoenix in 2007-2009. But now that is coming back and with it come Flagstaff second home buyers.

It’s with that in mind that I read with interest the recently released Investment and Vacation Home Buyers Survey for 2013. In this National Association of Realtors®report, available to members of the association, I learned that the share of vacation home buyers rose slightly last year, to an overall share of 11 percent of all buyers. What was of particular interest to me is that, on a national level, the percentage of second home buyers, among all buyers, has not changed significantly over the last decade. Rather, it’s hovered between 9% and 12% of all home buyers except for the boom year of 2006 when the share popped up to 14%. My educated guess is that the pop and the drop were greater in Flagstaff because Phoenix was one of the hardest hit cities in the housing recession.

Share of Home Sales by Intended Use Nationally

Primary Residence Vacation Home Investment Property
2003 67% 12% 22%
2004 64% 11% 25%
2005 60% 12% 28%
2006 64% 14% 22%
2007 67% 12% 21%
2008 70% 9% 21%
2009 73% 10% 17%
2010 73% 10% 17%
2011 61% 11% 27%
2012 65% 11% 24%

 

While buyers of primary residences typically purchase homes because of the desire to be a home owner or due to job relocation, buyers of vacation and investment homes, not surprisingly, are motivated by other factors. Eighty percent of vacation home buyers plan to use their property for vacations or as a family retreat and 27% plan to convert their vacation home into their primary residence in the future.I hear from a lot of people who are looking forward to retirement in Flagstaff and want to buy a home now for use in those happy days in the future.

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