We answer your cabin real estate questions like Is it a better time to buy or to sell?
In 2016, sales of U.S. vacation homes (cabins, cottages, lake homes and camps) continued to decline in what seems to be a sellers’ market. Vacation home purchases last year descended to an estimated 721,000, down 21.6% from 2015 (920,000) and the lowest since 2013 (717,000), according to the 2017 Investment and Vacation Home Buyers Survey conducted by the National Association of the Remodeling Industry (NAR).
Reasons for the cabin real estate drop off.
Lawrence Yun, NAR chief economist, says vacation home sales in 2016 tumbled for the second consecutive year and have fallen 36% from their recent peak high in 2014 (1.13 million). “In several markets in the South and West – the two most popular destinations for vacation buyers – home prices have soared in recent years because substantial buyer demand from strong job growth continues to outstrip the supply of homes for sale,” he said. “With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year.” Added Yun, “The volatility seen in the financial markets in late 2015 through the early part of last year also put a dent in sales as some affluent households with money in stocks likely refrained from buying or delayed plans until after the election.”
Cabin home prices.
Tight inventory conditions pushed the median sales price of vacation homes last year to levels not seen in roughly a decade. The median vacation home price was $200,000, up 4.2% from 2015 ($192,000) and the highest since 2006 (also $200,000).
The typical vacation home buyer had a household income of $89,900 in 2016, versus $103,700 in 2015. With home prices steadily rising, an increasing share of second-home buyers financed their purchase last year. The share of vacation buyers who paid fully in cash diminished to 28% (38% in 2015). Vacation sales accounted for 12% of all residential real estate transactions in 2016, which was the lowest share since 2012 (11%) and down from 16% in 2015.
Why buy a cabin?
In 2016, the top two reasons for buying a vacation home were: Family retreat:
42% Future retirement:
Cabins for rent.
Given the rising popularity of short-term rentals in locales throughout the country, it’s no surprise there were slightly more vacation buyers renting their property for less than 30 days. Twenty-nine percent of buyers (24% in 2015) did or tried to rent their property last year and plan to do so in 2017. Fifteen percent of home buyers did not rent their home for short-term purposes last year but plan to try it in 2017.