While the average price of a primary residence declined last year, the average price of vacation homes and investment properties declined even further, suggesting that many of these properties might now be available at an attractive cost. The median sales price of a vacation home was $150,000 last year, down from $195,000 in 2007, according to the National Association of Realtors. That’s a 23% drop in one year. A typical investment property cost $108,000 last year, down from $150,000 in 2007. That’s a drop of 28%.
Sales of these properties have been off, which might explain the price declines. Sales of primary residences were down 13% last year, but investment-home sales were down more than 17% and vacation-home sales were down 31%. Vacation-home buyers appear to be looking at their properties as a long-term investment. Some 58% of purchasers say they expect to keep the property for 11 years or longer.