In today's real estate market, in which money and credit are tight and many consumers are still uncertain about their financial future, you (and by you I mean me) would probably think the vacation-home market would be really soft. But you (again, actually me) would be wrong.
As it turns out, vacation-home sales actually grew at a faster rate than those of primary residences between 2008 and 2009 (7.9 percent to 7.1 percent, respectively). That's according to the National Association of REALTORS®' Investment and Vacation Home Buyers Survey, which was released at the end of last month. (It's also worth noting that investment homes did not fare nearly as well, with sales dipping nearly 16 percent between 2008 and 2009.)
The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat, Lawrence Yun, NAR's chief economist, said of the finding.
Deb Howard, a Lake Tahoe-based practitioner and 2010 chair of NAR's Resort and Second Home Committee, sees it that way too. Typical buyers in this market are driven most often by a desire to make a quality-of-life investment, she says. They want something they can enjoy with their family, and something their family can inherit.
Of course, that's not the whole story behind the recent upsurge in vacation-home sales. A major reason for the increase in volume is lower prices. Howard says prices of vacation homes in the Lake Tahoe area have fallen about 20 percent over the past couple of years.
That's no coincidence, she explains. These buyers have been waiting on the sidelines, and now that prices have dropped, they're jumping in. They're very conscious of value, and they're finding it.
Because of some unique circumstances, Lake Tahoe wasn't hit as hard during the downturn as many other resort destinations. First of all, the area doesn't have a large amount of condo construction. Also, the Tahoe Regional Planning Agency limited development during the nationwide construction boom, which means inventories didn't explode there. At one time, we were frustrated by these restrictions, but we've now come to realize they were beneficial, Howard says.
Howard believes this sector will continue to strengthen in the coming years in Lake Tahoe and other resort markets, thanks largely to a rising number of boomers who will invest wealth that they've built up or inherited in vacation homes. But she shares the same concerns - unemployment, lack of capital - as practitioners in the residential and commercial spaces.
We're all connected. The economy is going to drive the stability. We're all looking with great interest at those key economic indicators, she says.
Wouldn't you rather be here?
If you're interested in learning more about the resort and second-home market and where it's headed, you should attend the 2010 Resort and Second-Home Symposium. It's happening on June 13-15 right in Howard's backyard, at the Lake Tahoe Resort, Spa and Casino. Yun will be speaking there, and more than 350 resort and second-home specialists will be there to share best practices and network.
As we see our market start to emerge out of the dark of the last few years, it's ever more important that we have the tools to supercharge this sector. This Resort Symposium is a great opportunity to recharge your batteries in an amazing setting. I walk away with new tools to do what I do better, and I get a lot of referrals, Howard says of the event.