The U.S. Census Bureau report on residential vacancies estimates there were 3.6 million vacant seasonal homes in the third quarter of 2002, up from 3.1 million in 1990 and only 1.7 million in 1980. “That category often is cited as the total number of vacation homes,” Lereah says. “However, we believe that assumption misses many recreational properties that are not vacant.”

Other Census data shows there are 9.2 million homes held by owners in addition to their primary residences. “We can’t say with certainty what portion of that number may be for vacation or recreational use, but it appears the size of this market is much larger than earlier believed. Based on our survey, a “back-of-the-envelope” estimate indicates there may be as many as 7 million vacation homes in the United States,” Lereah says.

Second-home buyers were less likely to use financing to buy their home. Although 94 percent of all recent buyers obtained a mortgage to purchase a home, 56 percent of second-home buyers financed their property with a mortgage loan (52 percent of vacation home owners vs. 68 percent of investment owners).

Of buyers who identified other sources to fund or partly fund their second home purchases, 49 percent used savings, 10 percent tapped into equity from a primary home or equity from a refinanced property, 9 percent sold stocks or bonds, 7 percent used inheritance, 5 percent used gifts from relatives or friends, and 2 percent from the sale of personal property.

Thirty-four percent of second-home buyers in the last two years were more likely to be planning to purchase an additional home as a result of recent stock market declines, while only 18 percent of earlier buyers made such an indication. Among people who said an additional home purchase in the next two years was possible or very likely, nearly 40 percent said the recent stock slump increased the likelihood of that purchase; only 15 percent said it was less likely.

In addition, 13 percent of recent buyers tapped into home equity vs. 8 percent of second-home buyers prior to 2000.

Vacation homeowners prefer to be close to where they spend recreational time or to natural attractions. Seventy-six percent wanted to be near an ocean, river or lake; 38 percent close to the mountains or other natural attractions, and 37 percent in a specific vacation area.

Investment-home owners prefer their property to be near their primary residence, cited by 33 percent; close to family members, mentioned by 21 percent; or close to a job or school, cited by 10 percent. However, recreational attributes also were frequently mentioned, indication some investments were in vacation property.

In terms of desired leisure activities of interest to vacation homeowners, 69 percent identified beach, lake or water sports; 44 percent boating; 36 percent hunting or fishing; 21 percent golf; 21 percent winter recreation; 16 percent biking, hiking or horseback riding; and 4 percent tennis.

Vacation homeowners spent a median of 8 weeks per year at their property, while over half of all investment owners never used that home; 55 percent of investment owners rented to others for at least six months a year.

“Most vacation homeowners want their property for their own exclusive use, with 84 percent saying they never rent their properties,” Lereah said. “On the other hand, a small percentage of vacation homeowners rent their properties for more than six months a year. Those properties tend to be concentrated in resort areas.”

Eighty-five percent of second-home owners believe they made a wise investment. For those motivated by investment returns, 87 percent believe they made a good decision.

Most vacation homes are located relatively close to the owner’s primary residence, with a median distance of 185 miles. However the distance varies widely, with one-third more than 500 miles and one-third were less than 100 miles.

Forty-two percent of vacation homes are located in the same state while 19 percent were in a different state in the same Census region. In addition, 61 percent are in resort or recreation areas and another 20 percent are in rural areas. Most owners use a car to get to their property.

Vacation homeowners mentioned a wide variety of property types, with 31 percent identifying their structure as a cabin or cottage, 27 percent as a detached single-family house, 17 percent a mobile home, 11 percent as a multi-family unit (five or more units) and 6 percent a two-to-four unit structure.

Most vacation homeowners choose a property that is smaller than their primary residence, but is not necessarily a low-cost home. According to owner estimates, the value of a typical vacation home in 2002 was $150,000 compared with an estimated value of $200,000 for their primary residence.

By contrast, investment-home owners prefer to be even closer to their property, with a median distance from the primary residence of 99 miles. However, 37 percent are less than 25 miles. Forty-two percent of investment homes are in suburban or urban areas, while 30 percent are in resort or recreational areas.

In terms of property types, 54 percent of investment homes are detached single-family houses and 23 percent are multifamily units. Most are smaller than the owner’s primary residence and are likely to be easier to maintain. The median estimated value of an investment property was $127,000, smaller than the estimated value of investors’ primary residence, which was $200,000.

The search process for a second home is similar but somewhat different from that of a primary residence, with most people first learning about the home they purchased through a real estate agent or an acquaintance, each cited by 29 percent of respondents. Yard signs were mentioned by 10 percent; newspaper or TV ad, 8 percent; knew the seller, 6 percent; the Internet, 4 percent; a builder, 3 percent; and small advertisements, 3 percent.

Although 48 percent of all second-home owners purchased through a real estate agent or broker (57 percent of recent buyers since 2000), 38 percent purchased their homes from the previous owners. However, nearly half of all “for sale by owner” transactions involved buyers purchasing directly from someone they knew beforehand (17 percent vs. 19 percent who didn’t know the seller). The percentage of FSBO transactions for second-homes was higher than the 13 percent level of all homebuyers, noted in a separate NAR survey, because many sellers deal directly with a friend, family member or acquaintance. Another 13 percent of buyers dealt directly with a builder.

Buyers of second homes rely on real estate professionals to find the right property. Vacation homebuyers also were interested in assistance with pricing, paperwork and negotiations. Investment home buyers wanted many of the same services but also were likely to need assistance with finding renters and financing.

The survey included a mailing to 46,000 second-home owners and e-mail to an additional 47,000 owners. The exceptional size of the survey was made necessary due to typically low response rates from second-home owners, possibly arising in part from the survey not arriving at the resident currently occupied by the owner. The mail response rate was 5.3 percent, while e-mail generated 1.9 percent return for a total of 3,101 usable responses.