The NAR released their annual report on vacation homes and investment property sales today.

Second-home sales were mixed in 2006, with the combined total of vacation- and investment-home sales accounting for 36 percent of all existing and new residential transactions – down from 40 percent of sales in 2005…vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005.  By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005.

Not surprisingly, given the recent happenings in the real estate market, the sale of investment properties declined. But, in good news for Maui, even in the face of a very choppy market, more vacation homes than ever were purchased. So what were the average characteristics of a purchaser of a vacation home in 2006?

The typical vacation-home buyer in 2006 was 44 years old, had a median household income of $102,200, and purchased a property that was a median of 215 miles from their primary residence; 42 percent of vacation homes were closer than 100 miles and 32 percent were 500 miles or further.

That average age is getting younger and younger. Of course the typical Maui buyer likely has an income well above the $102,000. Why did they buy?

In listing the reasons for purchasing a vacation home, 79 percent of buyers wanted to use the home for vacation or as a family retreat; 34 percent to diversify investments; 28 percent to use as a primary residence in the future; 25 percent for the tax benefits; 22 percent for use by a family member, friend or relative; 21 percent because they had extra money to spend and 18 percent to rent to others.

In this, our judgement is Maui is likely typical. There was one very surprising result in this study.

The median price of a vacation home in 2006 was $200,000, down 2.0 percent from $204,100 in 2005. 

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