Is the Second Home Market a Buy or Bust?
Uncategorized July 30th, 2007From the page
Is the second home market a buy or a bust? The simple answer is a buy! The second home market has typically been mostly buyers that are baby boomers, as they continue to drive the market in second homes. They are at a point in their lives when they’re at the peak of their earnings and with interest rates still historically low, they want to diversify their earnings. The National Association of Realtors contends that 41% of vacation-home buyers have purchased second homes for vacations, 31% to use as a family retreat and 28% to diversify investments.
How has the second home market changed? The speculative investors who came into the market, were trying to make a “quick buck” and were buying multiple properties, were distorting the market numbers, and thus are not as prevalent. Some of the inventory left over from the investors have softened some of the secondary home market.
So, is the second home market a “bust?” Not really. Sales of this market are expected to stay strong for years, due to the fact that the youngest of the baby boomers are only 42 years old. The typical buyer for a second home is about 52 years old and has a gross income of about $85,000 according to NAR. As the younger Baby Boomers age, they will be a steady pool of buyers for the next ten years. Many of the second home buyers want to have something they can hand down to their kids or if necessary, use it as a rainy day fund.