There has been a huge surge in the sale of second homes in the United States driven by bargain prices, it is suggested.
Sales activity in this sector of the residential real estate market has jumped to its highest level said 2005, according to the National Association of Realtors.
‘During the past year investors have been swooping into the market to take advantage of bargain home prices. Rising rental income easily beat cash sitting in banks as an added inducement,’ said NAR chief economist Lawrence Yun.
He added that some 41% of investment buyers purchased more than one property and the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market.
Overall eight out of 10 second home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one third of vacation home buyers.
Its latest survey found that investment home sales surged 64.5% to 1.23 million last year from 749,000 in 2010 while holiday home sales increased by 7% to 502,000 in 2011 from 469,000 in 2010. At the same time owner occupied purchases fell 15.5% to 2.78 million.
Vacation home sales accounted for 11% of all transactions last year, up from 10% in 2010, while the portion of investment sales jumped to 27% in 2011 from 17% in 2010.