Second Homes: Facts and Figures

Let’s explore what second homes are, how we use them, and how we might be able to use them to make money!

Historically, a second home might have been a little cabin on a lake, or a tiny beach house, which you owned and used… yourself.

Well, times are changing…and the second home market is too.

Reviewing some studies on second homes, we found some surprising facts.

First of all, according to the NAR’s 2008 Profile of Home Buyers and Sellers, most second homes are single-family detached houses, in the suburbs.

Surprisingly, in second place were condos in urban areas – where many people are looking for a pied-a-tere… as in, a cool little condo where they can live during the week, with virtually no commute. And, even more interesting, some people are buying those urban condos so they can hang out in the city on the weekend – to take advantage of all the music, and shopping and dining that the bustling city can provide.

But also high on the list are small towns, rural areas and resort properties, indicating that many people buying second homes just want to get away from it all.

Another interesting fact — this one from the NAR’s Field Guide to Vacation, Resort and Second Homes — nearly a third of people who buy vacation homes, intend to eventually move in for good, with the second home becoming their primary residence.

But with the downturn in the economy, the second home market has changed in the past couple of years. Many people who had previously purchased a second home to keep it for themselves and their families, are now renting them out — it’s not a bad idea, considering it can be an excellent source of income in a tight economy. And it makes good sense, especially if the place will be otherwise just sitting empty month after month, when you’re not using it.

In fact, the New York Times has called renting out your vacation house a “Bright Spot’ in a down economy.

In today’s market, with affordability at nearly all-time highs, and interest rates nearly at all-time lows, it may be a great time to buy a second home. And if you do go the ‘rental route,’ chances are you’ll find a strong market — and possibly a nice extra income — thanks to your second home.

Your first step? Call a REALTOR® who really knows the market in the area where you’d like to buy a second home. Talk to them about what you’d like to buy, and whether you plan to just keep it, or to rent it out. A REALTOR® will know the market, the prices, the rental rates and where the best deal are… in today’s buyer’s market!

Written for National Association of Realtors®

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