Back in February, we discussed the increased activity of Europeans interested in purchasing Boston real estate (see Europeans Buy Boston Real Estate), and recently, the National Association of Realtors released a survey discussing investment and vacation home purchases across the entire US, much of which chronicles the influx in foreign investment trends.
In spite of a decline in the total vacation and investment home sales, second-home sales accounted for 33% of transactions in 2007. Sales of vacation properties fell 30.6% to 740,000 in 2007 compared to the prior year which boasted a record 1.07 million, while investment-home sales fell 18.1% to 1.35 million (down from 1.65 million in 2006), according to NAR’s new Investment and Vacation Home Buyers Survey report. During this same time, primary residence sales declined 10% to 4.34 million in 2007 from 4.82 million in 2006. NAR Chief Economist Lawrence Yun cited the disappearance of speculators from the market as the reason for the decline, leaving the market to serious buyers. The disruption in the mortgage market and tightening of credit during the second half of 2007 also impacted this market sector, but lifestyle factors and strong demographics (including a peak of population in their prime years for buying recreational property), point to a positive outlook for the vacation home market. While U.S. buyers may be taking a wait and see attitude, foreign buyers are taking advantage of the weak U.S. dollar and are propping up second-home sales. Conversely, Inman News reports that U.S. buyers are looking abroad for their second home investment in such markets as Costa Rica, Belize or Mexico, taking advantage of newer resort markets where prices are still relatively low and the U.S. dollar can buy more than at home.
Given that the report chronicles a summer 2007 time period, the data is relatively old, however, the report provides insight into some high level buying trends that are interesting in and of itself.
Download (297 KB) the 2007 report on international homebuying activity in the United States.
Keith Munsell 
