Vacation home sales now at pre-recession level
Vacation home sales have increased nationally for the fourth straight year and have now soared to levels not seen since before the start of the Great Recession, according to data released recently by the Sussex County Association of Realtors (SCAOR) and the National Association of Realtors (NAR).
NAR’s “2015 Investment and Vacation Home Buyer’s Survey” reveals that vacation home sales throughout the country rose to an estimated 1.13 million homes last year, the highest since the national real estate trade association began the survey in 2003.
That mirrors the most recent data from SCAOR, which details the latest in a string of steady real estate gains in Delaware’s southernmost county and an increasing number of buyers purchasing their homes with cash. The latter is true especially of the second-home market in southern Delaware.
Sussex County is also the most popular area in the state for the sale of vacation homes — particularly because of the 26 miles of Atlantic coastline and the burgeoning real estate market in the county’s beach communities, they said.
“Southern Delaware has certainly seen the growth in vacation home sales that our colleagues at the national level have witnessed, with homebuyers continuing to invest in our beautiful beach resorts,” said Fred Dean, 2015 president of SCAOR. “We saw a bit of a downturn in preceding years, as everyone did, but our coastal market has certainly returned with a flourish.”
Nationally, vacation home sales accounted for 21 percent of all transactions in 2014, the highest market share since the survey was initiated.
“Affluent households have greatly benefitted from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment,” said NAR Chief Economist Lawrence Yun in a statement issued by the association.
“(It) also reflects long-term growth in the numbers of Baby Boomers moving closer to retirement and buying second homes to convert into their primary home in a few years.” Vacation homes are defined by NAR as “recreational property purchased primarily for the buyer’s personal use.” That differs from the category of investment homes, which are purchased primarily to rent to others, or to hold for financial or investment purposes.
Earlier this year, SCAOR reported that more than $1.45 billion in real estate had changed hands in Sussex County during the 2014 calendar year, which was an 8 percent increase over the previous year.
Single-family home sales for 2014 rose 5 percent over the previous year, with the average three-bedroom home in the county selling for a median price of $366,157 during 2014. Much of the growth, according to SCAOR, was a result of the dynamic coastal market enjoyed in Sussex County, where the highest percentage of the 4,700 properties were sold during 2014.
“While most areas in Sussex County are up, there’s no doubt that the biggest gains have been realized in the coastal areas. But that’s not unusual, given that vacation homes nationally are accounting for an ever-growing piece of the real estate pie,” said Dean. “People from other areas continue to buy homes at our beaches, and we don’t foresee that changing anytime soon.”
To read more about issues related to Sussex County’s real estate industry, visit SCAOR’s website at www.scaor.com.