Category Archives: Second home demographics
Mary Ann and Fred Davis bought a home in Naples, Florida for $200,000. 2400 square feet and 40% off what it sold for in 2005. The home is in a gated community and they plan to keep it as a second home/family retreat for years, hence no pie-in-the-sky buy and flip notions. I’ve got more friends snapping up properties in three out of four of the nation’s hardest hit markets: Florida, Phoenix, and Idaho. (Sorry, no one I know cares to buy in Las Vegas.) This home was a short sale purchase. And according to Zillow economist Stan Humphries, this may be a great time to pick up a second home as long as you keep it for many years…
If you are going to buy investment property, you want a place where your home/land etc. is going to appreciate, right? And we all know the messages received across most of the country is fat chance, bubba. Sure, real estate in (drowning) Phoenix and Vegas is so cheap you can buy a home once listed at $1.5 million for $500,000. But here’s the thing: what are you going to do with it? Lease it, OK, to who? Where are the jobs, where are the people moving in to work and lease from you. I told a client the other day, if you want to invest in real estate, at least buy in Texas where we have decent job growth, universities, and a youthful age demographic.
If you own a second home in New York but don’t work there, you may soon be taxed like those who do, even on income made outside of the state. I love New York City and would be there every other week if I could. But I doubt I’d ever own property there, or could afford to. After a recent series of court rulings, this feeling could spread. A New Canaan, Ct. resident who works in New York City and owns a second vacation home on Long Island has been told by an appeals court he must pay income taxes in New York City and state — among the highest in the nation — on income generated outside of the state even though he and his wife live in Connecticut. The reason? They own a year ’round habitable vacation home on Long Island.
It is a tribute to the power of the real estate market that one of the major advertisers in this year’s game, again, is HomeAway.com. (Click here to see their unique, customizable spot — travelers can insert their faces as a main character in the commercial and vacation rental home owners can feature their listings. I’m even in this one!) The Austin-based firm offers a comprehensive on-line smorgasbord of vacation homes for rent, what many of you may know as VRBO (vacation rentals by owner) dot com. The company is doing extremely well, and growing, because more Americans want to monetize their vacation home properties, and more families want to stay in private homes when they vacation.
You do recall former NBA champ Michael Jordan. Not only is he known as “the greatest basketball player of all times” but he is gaining a rap as the greatest home builder of all times! Jordan is completing a 28,000 square foot mansion in The Bears’ Club, Palm Beach County, Florida, near where Tiger Woods just completed his grand estate. The builder: Lavelle Builders out of Jupiter, Fla. Of course, Tiger’s estate is surrounded by water on three sides to, perhaps, keep the paparazzi (among other things) at bay. Jordan’s mega-mansion, which is still under construction, is not even close to the water. But it now goes down as one of the largest, most expensive homes ever built in Florida that is not on the water, says real estate agent Jeff Lichtenstein of Christie’s Great Estates and Illustrated Properties. Lichtenstein knows of what he talks: he sells real estate in the Palm Beach area, which is notoriously filled with high net worth people who like to enjoy a second or third home here because here they have it all: a backyard marina for their yachts, sea, beach, and plenty of gorgeous Florida sunshine.
1. Second home trends: Affluent Baby Boomers will retire later and downsize from their large McMansions for which utilities and taxes have become prohibitive, to smaller homes, maybe condos, in the city and a second home — in the cheaper boonies, or in another city. Just last night a reader emailed me that his biggest dream is to own a second home condo in Quebec! Cripes, even Disney is getting into this market.
I think I could live with just about every single suggestion this bipartisan deficit panel has made, at least, those that I have read, except the home mortgage deduction limitations and eliminating the mortgage deduction on second homes. Homeowners can now deduct mortgage interest on mortgages up to one million dollars. But would a second home be defined as a “vacation” home? Would that also include a home purchased for investment, to lease out? Of course there would be ways around that, I suppose — such as putting the investment property in a limited liability partnership, which then becomes an entity itself and it takes the deductions. No, the housing market is still too fragile for this nonsense. Let the mortgage deductions remain.
Thanksgiving is over and for most of us, those turkeys from last Thursday are going to make excellent sandwiches for a few days. But the inspiration for this post truly came from an article I came across on the BBC: is squirrel the perfect austerity food? I mean, we are trying to make ends meat meet (pardon my pun) in the U.S., and this story points out that squirrel is really a very American food. In fact, it could even be more red-blooded American than turkey?
Kind of like an unplanned pregnancy, more folks these days are ending up with two or more homes on their real estate hands, making a lot more of us second (or multiple!) home owners. Real estate market conditions have practically stranded homeowners in their homes, which is not the end of the world if you keep a job, pay the mortgage down, and enjoy it. But what if you are offered a job in another city and cannot take it because you cannot sell your home? Countless Dallas Realtors tell me of clients who want to move here, but cannot budge because their home won’t sell. Back in the boom days, companies would move employees and even buy up their homes — many turning a profit on the re-sale. But now, companies are no longer wanting to be within ten hundred feet of the real estate biz.
You think of SoHo and anything south as where it all began with artists in New York City, where they all live as they did years ago before it cost more than an arm, a leg, your first-born child and a bedbug-sniffing dog 24/7 to live in Manhattan. But guess what: artists now think NYC is too costly. A survey of 1,000 artists, conducted in 2009 by the New York Foundation for the Arts, shows that 43% of artists, like the rest of us, expect our income to drop — by 26% to 50% over the next six months. More than ten percent feel they need to flee New York City because they cannot afford living there. And here’s a wake-up call: artists fresh out of art schools around the country are not choosing to live in New York City. Instead, they are going to budding art communities in places like Detroit, Cleveland and Houston.