"Although vacation homes' prices are starting to rise, the cost is still incredibly affordable compared with prices 10 years ago," HomeAway CEO Brian Sharples said.
The NAR said 46% of vacation-home buyers paid all cash and that large down payments were typical for those who borrowed.
"The typical vacation-home buyer," the NAR said, "was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence; 34% of vacation homes were within 100 miles and 46%were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years."
Potential buyers should take to heart that last fact -- the median 10-year holding period. Because the market for vacation homes can be volatile, it's risky to buy a home you may have to sell quickly.Other factors to consider: Will the family really want to vacation in the same place year after year? If the parents or grandparents buy, what will happen to the property after they pass away? If the home will be used by an extended family, how will scheduling conflicts be resolved?
And most important: Can you afford to maintain the property even after a setback such as a job loss or a shortage of renters? If all the answers to these questions make a vacation home look like a sensible purchase, now is a good time to start looking. Prices are still well below their peaks of the past decade, and mortgage rates are still incredibly low.