Rising home prices are influencing more people to rent rather than buy their vacation homes.
CNBC reports that sales of vacation homes fell 22 percent last year and 36 percent from its peak in 2014. Vacation home sales are even down in the South and West regions, where sales have been strong for years.
While the uncertainty about the economy in the wake of last year’s presidential election gave affluent buyers some pause about buying a second home, the biggest reason for the drop in sales is that demand is outpacing supply.
Tight supply of vacation homes for sale was behind the jump in prices, as it is in the overall housing market. The median price of a vacation home sold in 2016 was $200,000, up 4.2 percent compared with 2015 and the highest median price since 2006.
Vacation rentals actually increased last year. According to a survey by the NAR, investors increased their purchases and fared well renting to short-term vacationers.