Second-home deals
It's not too late to snare that retirement or weekend haven of your dreams
"We're definitely seeing people's interests expand as they look for good deals," says David Lereah, chief economist for the NAR. "There's a whole new set of resort areas around the country." And EscapeHomes.com, which caters to those who lust after vacation properties, has identified 10 of them. Instead of Palm Beach, for instance, buyers are looking to still-affordable places like Venice. Instead of Cape Cod, they might look farther up the coast, to Brunswick, Maine. If western mountain resorts like Aspen are out of your range, look to undiscovered spots like Paonia, Colo., or Livingston, Mont.
Seattle journalist Doug McLennan did just that, seeking out a less-traveled getaway. McLennan, 46, and his cardiologist wife, Sarah Speck, 54, had been toying with the idea of a second home in the region. But in many areas, like popular Bainbridge Island or the San Juans, the so-called Microsoft millionaires have pushed the price of waterfront property into the stratosphere.
So the couple looked for places that were a little underdeveloped but offered the same water vistas they'd been hoping for. They found one on Vashon Island, which is less accessible to commuters and even has a limited water supply, so it can never be overdeveloped. The home they found was vintage 1953 and looked it--but at $500,000, it was a dream location and a fraction of what other waterfront property in the area would cost. "We're really enjoying it, and it's also appreciating in value very quickly," McLennan says. "It may even be a retirement spot for us."
Indeed, the specter of retirement is one reason for the nation's vacation-home juggernaut. But there are many other factors at work, too: Boomers are in their prime earning years and are in a financial position to afford a second or third home. Supply is limited in resort areas, thanks to natural boundaries and local zoning restrictions. Mortgage rates are still relatively low historically, despite recent upticks. And people just feel safer with a tangible investment like real estate instead of a stock market that's burned them before.
Look outside the box. What's a homebuyer to do? Broaden your search area, for one, say experts. Instead of setting your sights on, say, Miami's Ocean Drive, seek out a resort's outlying communities--close enough to offer the same amenities of gourmet dining or high-end shopping but removed enough to offer a reasonable price. Like little Talent, Ore., suggests Hehman, near the tourist hot spot of Ashland. "In Talent, you can still get a home for $200,000. In Ashland, it might be $500,000, and it's only three minutes away."
If you're determined to buy in prime communities, then consider renting your potential home out during peak season, which would significantly pare the cost of ownership. Or be prepared to lower your expectations some, such as buying a place not directly on the water. Historically, people would clamor for beachfront, to make sure their place would always be an easy sell, says NAR's Lereah. But no more: Purchase a home 3 miles away from the sand, and it's still within reach of the beach.
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