Since vacation homes have historically been a significant share of Flagstaff’s real estate market, the National Association of Realtors® survey of vacation home buyers is something to watch for those interested in Flagstaff’s home market. NAR’s 2008 Investment and Vacation Home Buyers Survey, conducted in March 2009, is based upon answers from 1,924 usable responses. Here's the important stuff as it relates to vacation homes:
The combination of vacation- and investment-home sales slipped to 30 percent of all existing- and new-home transactions in 2008, according to NAR. The market share of homes purchased for vacation purposes in 2008 was 9%, compared with a 12 percent market share in 2007. The total share of second homes (vacation and investment properties) declined from 33 percent of all transactions in 2007. In 2005, the peak year for home sales, 40 percent of home sales were second homes.
The size of the second-home market nationwide is significant. NAR’s analysis of U.S. Census Bureau data shows there are 8.1 million vacation homes and 40.5 million investment units in the United States, compared with 75.5 million owner-occupied homes. NAR’s 2008 Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.8 percent to 512,000 last year from 740,000 in 2007, while investment-home sales fell 17.2 percent to 1.12 million in 2008 from 1.35 million in 2007. For comparison, primary residence sales declined 13.2 percent to 3.77 million in 2008 from 4.34 million in 2007.
The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.
In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city. I’m not sure where Flagstaff falls in this classification. Since the survey is based on buyer perceptions, my guess is that Flagstaff would be considered a “small town” by most of our vacation home buyers.
Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or row houses, and 7 percent “other.” Sixty-nine percent of vacation home buyers purchased existing homes; the rest purchased new homes.
Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers. The credit markets may not be affecting vacation home buyers: More than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.
If you'd like to buy a vacation home in Flagstaff, contact Team Heitland at RE/MAX Peak Properties! | 
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