Second Home Sales Falter

(MoneyWatch)  The second-home market is cratering, and that means this could be a good time to buy if you can afford it.

The latest numbers from the National Association of Realtors (NAR) show that vacation and second home purchases slipped to just 30 percent of all sales recorded in 2008. According to NAR's 2008 Investment and Vacation Home Buyers Survey, vacation home sales dropped 30.8 percent to 512,000 units last year. (By contrast, primary-residence sales declined 13.2 percent to 3.77 million.) At the height of the housing bubble, some 40 percent of all home sales were second homes.

NAR's chief economist, Lawrence Yun, remains an optimist. He notes that the people most interested in buying a second home are aged 45 to 55, so "the bulge of population approaching middle age should drive the second-home market over the next decade."

If you're motivated by price, the timing could be good. The NAR report noted that the median price of a vacation home was $150,000 in 2008, down 23.1 percent from 2007.

But getting financing for a second home or investment property is tougher than it used to be. The shortcut: NAR's report notes that 40 percent of investors and 30 percent of second-home buyers paid cash.