Second homes aren’t just for the extremely affluent and tropically inclined, as the latest numbers show.
According to a 2011 survey from the National Association of Realtors, 19 percent of recent homebuyers own more than one home, up 5 percent from the previous year. Further, vacation properties made up 27 percent of all home sales last year. And the destinations aren’t just south-of-the-border getaways. Some of the biggest second home markets fall in lesser-known cities in the U.S., such as Silverdale, Wash., Whitefish, Mo., and Flagstaff, Ariz.
According to real estate professionals in these second-home regions, there isn’t just one type of buyer investing in these properties.
Pam Charron, a real estate agent at Michael Saunders & Co. in Sarasota, Fla., says that her firm sees a lot of investors who know the prices are not going to go lower, and a lot of future retirees.
“They’re rushing in now because the prices have dropped so low – 40 to 50 percent less than the high times – and they’re taking advantage of that,” Charron says.
Ann Heitland, associate broker at RE/MAX Peak Properties in Flagstaff, Ariz., says that she sees buyers from the “solidly middle-middle class” to the “very rich.”
Data from the NAR shows that the typical vacation homebuyer in 2010 was 49 years old with a median household income of $99,500. The median price for a vacation home was around $150,000. It may be a hefty price tag for a non-primary residence, but seeing that the price was $169,000 the year before, now might just be the perfect time to jump on a secondary property.
What makes for a good second home candidate? It’s all about assessing personal needs and desires. Many of these second-home markets fall outside of extreme metropolitan jurisdictions and into just-off-the-grid suburban areas with lush art scenes and other tourist draws. In Heitland’s Flagstaff area, for example, it’s recreational opportunities like golf, hiking, mountain biking, horseback riding and nearby national parks that lure in buyers. It’s also a good escape from the congestion of nearby Phoenix, she says. For Charron, it’s Sarasota’s water properties and urban art scene – from the theatre to annual sandcastle-building festivals – that make the area unique. For the markets in Montana and Washington state, it’s fishing and hunting opportunities that draw in outsiders. For some cities, universities draw in homebuyers, whose children often live in the home while enrolled in school.
Another facet in second-home consideration is finding a place that may eventually turn into the home proper. In fact, the NAR reports that 34 percent of vacation homebuyers said that they plan to use their property as a primary home in the future. For the prospective retirees, this is particularly common.
“We see many baby boomers who plan to retire in the next few years take advantage of our low market prices with intent to move here after retirement,” says Charron, who notes that many of them purchase more than one second-home property.
One thing is certain: Prices will go up. It’s just a matter of when. “Our prices are at bottom, but how long it will take for them to start going up is uncertain,” Heitland says. So for the second home curious, it may be now or never. She says she’d encourage anyone interested to start poking around. “I’d start to look now with the idea of buying if you see something,” she adds. “Our inventory right now is very low, which should be putting some upward pressure on prices.”
Sarasota agent Charron also notes the inventory shortage in her market. She says that and the low prices – which she says are about the same as they were in 2000 – should be a clear indicator to get the ball rolling. “If you’re on the fence, I would recommend buying now because in two or three years when the prices go up, you’ll look back and think ‘I should have bought then!’” she says.