Second homes will continue to sell

By Justin Hunter

The U.S. housing market has been in a difficult stage throughout the past years as sales and prices have declined. In fact, sales are hitting record lows in many parts of the country even though prices have decreased.

As a result of the struggling market, much speculation has been made as to the future of the second home market. If people cannot afford and are not buying regular homes, how will the second home market survive?

The article, “Multiple homes still in vogue among affluent” posted in the October 24, 2006 edition of Inman News, explains how the second home market relies on a different sector of the real estate world.

“Second, third and fourth homes are still in vogue for affluent homeowners who participated in a study by Sotheby's International Realty and Architectural Digest.”

“Thirty-six percent of Architectural Digest subscribers said they plan to buy an additional home in the next two years, and of those who already own three or more homes, 49 percent plan to purchase another home within two years.”

This is interesting news considering the current status of the slouching single-family home market. But second homes are bought by the wealthy. There is a clear separation between those who can afford two, three, four homes and those who save their whole lives just to buy one.

“Of those who already own a second home, 35 percent said they plan to buy a third home within two years.”

So, then what are second home buyers searching for? What makes these properties stand out from the rest of the market?

The most obvious answer to this is location, location, location. According to the survey, location is a primary factor but lifestyle amenities have become an increasingly important factor when determining which second home to buy.

“About 32 percent of the participants know what amenities and characteristics they are looking for and would search in a number of locations to find what they want. Those with household incomes under $400,000 are more likely than their wealthier counterparts to indicate they would search in a number of locations to find the house that meets their amenity checklist.”
Wealthier buyers have the luxury of searching homes in a specific location and then adding the amenities themselves.

The study found that when location was included in the search, waterfront properties were most desirable, with an overwhelming 75 percent of the respondents choosing this desired locale.

“Regional differences were found mostly among respondents from New York and California, the survey found. New York metro-area participants are most drawn to waterfront or oceanfront properties, while Californians found this of less interest.”
Californians are also more attracted to ski destinations and fitness centers, while New Yorkers are attracted to golf courses.

What’s this all mean? If the upper-echelon is still buying expensive, exclusive properties, the housing market should not crash. Prices are falling but there will be enough interest in the housing market to keep it afloat and eventually regenerate a seller’s market.

Back to Articles