Sales of vacation homes fall

However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision, the NAR said in a report.

The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007, the NAR said.

The total share of second homes declined from 33 percent of all transactions in 2007, while in 2005, the peak year for home speculation, 40 percent of sales were second homes, the NAR said.

(Reporting by Julie Haviv, Editing by Chizu Nomiyama)