NEW YORK (TheStreet) -- With the school year winding down, the vacation season is upon us. Wouldn't it be just swell if you owned the perfect beach or mountain getaway? It would sure beat renting year after year.
Indeed, this may be a good time to buy. By most accounts, vacation homes are still selling well below their peak prices of the past decade, and many potential buyers are feeling more prosperous. Still, a vacation home is not for everyone.
Vacation home sales jumped nearly 30% last year, to 717,000 units, according to the National Association of Realtors. That outstripped the growth in sales of owner-occupied homes, which were up by 13.1%, to 3.7 million. Sales of vacation properties were nonetheless only about two-thirds of the peak in 2006. There are about 8 million vacation homes.
A key factor in growing sales, the NAR said, was the huge rise in the stock market, which last year piled a 32% gain on top of healthy returns in previous years. Vacation homes, as one would expect, tend to be bought by the well-heeled, and those folks invest in the stock market.
Last year the median vacation home price rose 12.5%, to $168,700. About 38% of vacation home purchases were all-cash deals, and big down payments -- a median of 30% -- were the rule for those involving a mortgage. Distressed sales accounted for 42% of vacation home transactions. That means homes in foreclosure, owned by the lender or in mortgage-payment delinquency.