Investors and vacation-home purchasers have had a hard time since the bubble burst. Prices declined and both renters and sellers were scarce. The market share, however, is holding its own. National Association of Realtors' Chief Economist, Lawrence Yun, reports, “Despite extraordinarily tight credit conditions for purchasing a second home, the market share for vacation and investment homes held steady,” he said. “A sizeable number of buyers made deals with all-cash offerings.”

And while fewer people are buying vacation homes (sales volume was down), as jobs and market stability return, so will the buyers. For now, however, there continue to be declines. 2010 vacation-home sales were down 1.8 percent from 2009. This is good news when compared to primary residence sales, which fell by 5.6 percent. Investment purchases, on the other hand were down 7.8 percent in 2010. The difference? Many investors are waiting out the market bottom before they buy.

Prices are down. The median vacation-home price was $150,000, down a considerable 11.2 percent from the year prior. Investment-home prices were 10.5 percent below 2009 levels. As a comparison, primary residence numbers help more steady, declining just 4.5 percent.

Fueling a bit of activity, however, are the reduced prices of foreclosed properties. “Second home buyers purchased more distressed homes at discount than did buyers of primary residences,” Yun said.

Recent statistics indicate a pattern when it comes to the purchasing of vacation homes. According to the NAR, "lifestyle factors continue to be the primary motivation for vacation-home buyers, with the desire for rental income driving investment purchases."

The study found that 34 percent of vacation-home buyers plan to live in the home as their primary residence in the future. Even 10 percent of investors had the same plans. And both investors and vacation buyers were thinking of others when they made their purchase. Twenty-one percent of investors and 14 percent of vacation buyers bought properties for family and friends to use.

What region sees the most activity in the vacation-home market? That would be the South, where 36 percent of vacation home were bought last year.

Published: March 31, 2011

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Carla Hill, M.A., works on the Realty Times staff as Managing Editor for our online publication. She also is Producer for the real estate news channel, seen daily on RealtyTimes.com and on video newsletters nationwide.