Florida second homes or vacation property
If you’re thinking about buying a vacation home, you aren’t alone.
Vacation home sales across the country are soaring, mainly for two reasons: Declining prices mean deals can be had, and empty nesters are flooding into the market.
Baby boomers looking ahead to their days of leisure are snapping up vacation homes at a faster pace than ever, particularly in beach resorts in the South and the West.
Vacation home sales rose by 57.4 percent in 2014 compared with 2013 and reached a record high, according to the National Association of Realtors (NAR).
In fact, vacation homes now represent 21 percent of all home sales, the highest share since NAR began tracking the market in 2003. An estimated 1.13 million vacation homes were purchased last year, up from 717,000 in 2013.
“There are several factors driving vacation home sales, but one of the main ones is pure demographics, with baby boomers nearing retirement age or already retired who plan to downsize,” says Jessica Lautz, director of surveys and communications for NAR in Washington. “One in five of vacation home buyers say they plan to live in the home full time in the future.”
But baby boomers aren’t the only ones getting into the game. Some younger families with investment income or home equity from appreciating home values are opting to purchase vacation homes to serve as a place to generate memories with their families, invest for the future and generate income from short-term rentals to offset their own vacation costs.
One-third of vacation home buyers plan to use their property as a family retreat and 13 percent bought for future price appreciation, according to NAR’s research.
“The rise in the stock market last year contributed to the spike in vacation home sales,” Lautz says. “Thirty percent of all vacation home sales were all-cash purchases, and even among those who financed their homes, 48 percent made a down payment of 30 percent or more.”
Lautz says these cash sales were a little easier to make because of the lower median cost of vacation homes, which declined 11.1 percent from $168,700 in 2013 to $150,000 in 2014 in spite of increased demand. She says 45 percent of vacation homes purchased in 2014 were distressed sales, meaning they were a foreclosure or short sale.
“People are also buying relatively small homes, with a median size of 1,500 square feet,” Lautz says. “Some choose to buy condos and townhouses, which are 46 percent of the market compared to 54 percent single-family homes.”
Buyers of vacation homes traditionally prefer to purchase a place close to their primary residence so they can get there on weekends with ease. But according to research by HomeAway, a vacation rental Web site, that pattern is changing.
The average vacation home purchase in 2013 was 322 miles from a primary residence, compared with 49 miles in 2003.
Beach resort properties are the most popular, attracting 40 percent of buyers, compared with 19 percent in the country and 17 percent in the mountains, according to NAR’s survey.
Here’s a look at a few resort communities across the nation and what you can find in those areas:
Fort Myers, Fla.
Florida buyers tend to be pre-retirees or retirees, says Damon Vetere, a real estate agent with Coldwell Banker Residential Brokerage in Fort Myers.
“I think I only worked with one family in the past year — the rest were pre-retirees buying homes and renting them out for part of the year for the income,” Vetere says. “They plan to move to Florida full time eventually.”
One group of buyers comes for an unusual reason: baseball.
“We get a lot of buyers from Minnesota and from Boston because the Twins and the Red Sox do their spring training here,” Vetere says. “People come to see that, and then they decide they like the area and want to own here.”
Other buyers come from the Midwest and Canada as well as the Northeast to buy homes in resort communities in Marco Island, Sanibel, Captiva and Naples, he says. New developments can be found in abundance throughout the area, and local economists anticipate the Fort Myers region will double in population over the next decade.
Vetere says that homes priced under $250,000, typically condos, townhouses or smaller single-family homes in good condition, sell immediately, often for an all-cash offer. He says that in some areas farther from the beach you can find a relatively new single-family home with 1,400 to 1,500 square feet and a swimming pool for under $250,000 but that prices have been rising steadily in recent months.
“In downtown Fort Myers, condo prices had dropped to $350,000 to $375,000 but are now back up to $500,000 to $600,000, higher than before the recession,” Vetere says.
While most people think of a vacation home as a luxury item reserved for the wealthy, prices that range from under $200,000 to more than $39 million in resort communities throughout the country mean there’s something for nearly every budget.
Of course, the geographic locations of second homes also correspond to population density. Counties with more than 25,000 second homes are mostly located in or near metropolitan areas. The table below lists the top 10 counties with the most second homes. States with at least one such county are Arizona, Florida, California, Massachusetts, Illinois, New York, New Jersey, Nevada, South Carolina, Delaware, Texas, Michigan, and Maryland.