Buying a Vacation Home
Your second home could be a weekend retreat, a vacation home, or quite literally a second home in which you spend almost as much time as your first home. All kinds of second homes are valuable, but vacation homes are the hottest properties by far. About eighty percent of second home sales are of vacation homes. Many are in established resort cities, such as Sarasota and Naples, Florida; Santa Barbara, California; Park City, Utah; and Myrtle Beach, South Carolina. Homes in these areas rose an average of twenty-seven percent in value between 1999 and 2001, according to a National Association of Realtors survey.
Median Second Home Price
1999: $127,800
2001: $162,000
2004: $200,000 - $210,000
A different, smaller survey of ten select markets found that vacation homes appreciated in price by twenty-two percent in a twelvemonth period from mid 2003 to mid 2004. This survey was conducted by EscapeHomes.com.
The median age of first homebuyers is thirty-two. The median age of second homebuyers is forty-seven, with an annual income of about $85,000. Don’t wait until you are forty-seven! Think how much better off Americans would be if they bought their first home at twenty-two instead of thirty-two.
Many buyers of vacation homes are retired people with time on their hands. The growing numbers of retired Americans, as a percentage of the population, is thought to be causing the market for vacation homes to surge even higher than the booming residential market in general. Another force driving the vacation homes market is the 1997 capital gains tax exemption on $250,000 for individuals and $500,000 for married couples, which causes people with grown families to trade down in home size and buy a vacation house with the profit. Internet listings lure people to check out resort properties where they might not have gone otherwise. Some see such homes as safe havens in an increasingly dangerous world. A market driven by several very different forces, as this one is, promises to remain in a healthy state for some time to come.
