By now everyone has heard the frequent reports by the media and even many real estate agents that the real estate market has softened since 2005. Well, just how bad was 2006 and was the second home market really the hardest hit? The 2006 Vacation Home Survey conducted by the National Association of Realtors has just been released and sheds new light on the the second home market. The truth is that, generally speaking, the housing market did slow (down 4.1%) in 2006 from its five-year-record-setting pace. Additionally, the rate of second homes purchased for investment dropped in 2006 by an incredible 30% (due primarily to speculative buyers). However, while investment home sales plummeted, the sale of second homes purchased primarily as vacation homes hit record high sales (up almost 5%). Vacation home buyers are distinguished from investment home buyers in how long they plan to keep their home. Most vacation home buyers surveyed said they plan to keep their home for 11 years or longer.

The largest percentage of vacation homes purchased was in the south (38%). Water continues to be a big draw with two-thirds of those surveyed saying they want to be close to an ocean, lake, or river. However, fewer than one-fourth purchased in resort locations. The rural market also continues to grow with 29% purchasing property in rural areas.

Projections for the future are also promising for the second home market with more than half of those surveyed saying they plan to purchase another home within two years.

(The complete results of the survey can be found in "articles" on this website)