More Americans own second homes than ever before. More Americans own third homes than ever before. Yet another sign of the ever-widening gap between rich and poor? Class polarization 101? Tsunami economics?
Among the nation's entire existing housing stock of 115.9 million homes, 6.6 million are vacation homes (according to the National Association of Realtors). In 2005, vacation homes accounted for 13% of total sales volume. It's not just the Martha's Vineyards and the Vail Colorados attracting the second sect either. The majority of vacation homes, according to researchers, are within a two and a half hour drive of an owner's principal residence.
The typical vacation home buyer is reportedly 55 years old, and earns $71K a year. Seventy-one K a year, that ain't exactly Rockerfeller or Snoop Doggy Dogg dinero! So what's fueling this thing?
The trendsmiths attribute portfolio diversification, low interest rates, post 9-11 jitters, and the increase in telecommuting (citing the average three-day stay).I think it has something to do with the costliness of urban real estate.
Moving up the neighborhood ladder takes more than a little stretch nowadays, it takes downright financial contortionism. Forsaking monster mortgages, and swollen property tax bills, buyers are reaching out. In Los Angeles they're reaching towards the desert, or to the mountain ski communities (like Big Bear). In the Bay Area, buyers look to the wine country or Tahoe. In D.C. they target the Virginia countryside, and in New York City they go every which way (the Jersey shore, the Hudson River Valley, the Hamptons, etc).
As downtown L.A. continues its Phoenician rise, as the breadth and sophistication of apartment homes (condos) grow, I believe this trend will take deeper root, with middle-agers downsizing into culture-close, low maintainance flats. City centers will be front and center, as many buyers move from suburb to city, rather than vice versa.
The European model in full effect.