Summer. Vacation time. Finally. How nice it is to wake up with the birds singing rather than with the alarm clock. Time to relax, recharge and enjoy days without deadlines, crises and long meetings. Sounds wonderful. Question: is there a perfect recipe for a nice/quiet vacation? No. There is no one-fits-all-type vacation.
Some adventurous minds like to hop from one place to the next, from one hotel to another, pack & unpack, refill the gas tank or catch another flight every so many days. Some are not quite so keen on discovering the world. They prefer cooling off in the comfort of a home away from home, where they have their marks, where they can celebrate good times with family and friends.
That’s the beauty of a vacation home, or a weekend home which is far enough to feel like an escape, yet close enough to get to quickly. Today, the market for such a treat is so tempting that millions of buyers are house hunting for the perfect nest, whether along the coast, by a lake, in the mountains or the desert. There is something for everyone. All you need is money. Of course we all have many options on how to use our precious dollars.
Say you have “too much” of those. Nice. What can you do with the excess, your so-called discretionary income? Some of you, thinking that since you know how to make a lot of money, you might as well try to make even more of the stuff. You may choose to gamble on Wall Street. Some of you, the prudent type, will prefer building a nice nest egg, slowly but surely, and stay clear of life’s financial hazards.
And then again, there is YOU, who think that life is too short to waste as much as a day. You want to treat yourself with a beautiful and useful present: that vacation home or weekend home we are talking about. Of course, this treat does not preclude you from using the savings or investing options mentioned above.
Now that the residential real estate market is good and prices are either rising or stabilizing, weekend-homes are looking awfully attractive. With this type of investment, you can’t go wrong. It is likely to appreciate over time, but even if it does not, you get to use it and enjoy it as long as you keep it. It is, after all, a second home.
As it is the case for primary residences, location is THE factor to consider. Even though the return on investment may not be top of mind, you might as well financially benefit from picking the right spot. It is especially important in coveted luxury markets where vacation or weekend homes represent a huge share of the housing stock. In a good economy, such properties command a hefty price. Conversely, when the economy is moribund, those premium pricey homes are hard to sell.
We saw both scenarios in just a few short years in the most famous vacation/weekend heavens in the country. Timing is almost everything. Only six years ago or so, choice locations such as The Hamptons, Pebble Beach, Sun Valley, Park City, Naples, the Wine Country, Cape Cod… To name a few, were offered at bargain prices, anywhere from 15 to 30% from peak days. No more. The economic revival of the last three years has accelerated the selling process at a rate which already produced a shortage of inventory.
The weekend/vacation home market is now healthy and is expected to start roaring again. In fact, at the high-end, the bet is that price appreciation for second homes will surpass that of primary homes. It is not too late to get on the train but it may soon be. With today’s still very low mortgage rates and a growing demand from cash buyers, domestic or foreign, the window of opportunity is getting thinner by the month. Ready – Set – Go!