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Fewer People Buy 2nd Homes

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By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: March 31, 2009

TAMPA - Fewer people are splurging on second homes, but more are plunking down cash when they do purchase, according to a report released Monday by the National Association of Realtors.

Overall home sales are up nationwide and in Florida, but the bulk of the sales are to first-time homebuyers and others cashing in on good deals.

When it comes to vacation homes, though, more people are putting off the purchase.

The findings aren't surprising, given the economic downturn, said Lawrence Yun, chief economist for the real estate group.

"We expected vacation home sales to fall, given the impact of a declining economy on discretionary purchases," he said.

What is somewhat surprising, however, is that more buyers are paying with cash.

Four in 10 investment buyers and more than 3 in 10 vacation home buyers paid cash for their properties. Many of those buyers said they bought to diversify their portfolios.

Thirty percent of homes sold in 2008 were second homes, down from 33 percent in 2007, according to the report. In 2005, the peak year for housing speculators, 40 percent of sales were for second homes.

Despite the drops, the real estate group expects more people to buy second homes in the years to come, based on the age that many buyers start considering a second home. In the United States, 39.2 million people are 50 to 59 years old, 44.8 million are 40 to 49, and 40.7 million are 30 to 39.

"While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain," Yun said.

"Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade."

Reporter Shannon Behnken can be reached at (813) 259-7804.

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