Vacation Home Sales No Longer On Vacation

Finally!  Good news about the vacation housing market is here.  The recent release of vacation home sales statistics by the National Association of Realtors (NAR) in their 2014 Investment and Vacation Home Buyers Survey provides a crystal clear picture of trends that we experienced first-hand in a number of such communities around the United States over the past year.  For example:

• The golf-and ski-oriented Martis Camp in Truckee, California (near Lake Tahoe) sold 66 developer custom lots in 2013 at an average price of approximately $900,000.
• The ocean-front Strand at Headlands in Dana Point, California had a banner year, selling 26 developer custom lots at an average price of approximately $4.3 million.
• Golden Oak in the Orlando area offers a private luxury enclave on the grounds of the Walt Disney Resort and is also home to the new Four Seasons Resort that is scheduled to open in 2014.  Lots average $700,000 in price and sales agents indicated that “we can’t manufacture lots fast enough to meet the demand today, and there is a waiting list for the next phase.”
• Renewed development at The Hermitage Club (formerly Haystack Mountain) near Mount Snow in Southern Vermont is in full swing, with an 80,000 square foot clubhouse under construction, club memberships selling well and multiple residential product lines scheduled for market entry in 2014.

The graph below illustrates where vacation home sales stood in 2013, along with our estimate of how they are likely to trend through the foreseeable future.  While last year’s 30% jump is quite favorable, it is also a reflection of the historically low home prices and improved consumer confidence.  As this confidence continues to improve over the coming years, we expect vacation home sales to continue to improve but will likely stabilize around the 750,000 unit mark after peaking in 2015.