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The vacation home market is red hot again, and we have the rebounding economy and aging baby boomers mostly to thank for it.
According to a recent survey by the National Association of Realtors, vacation home sales soared in 2014 at nearly double the rate of the prior two years combined. NAR economists say as baby boomers move closer to retirement, many of them are snapping up second homes in desirable vacation destinations with plans to make them their primary residence in a few years.
So, where are vacation homes moving the fastest? According to WashingtonPost.com*, here are 5 hot markets to consider if you’re dreaming of a getaway home of your own:
Outer Banks, NC
These tranquil east coast barrier islands are a big draw for people from Washington, DC and Northern Virginia because they’re relatively easy to get to, but seem a world away from the city bustle. Vacation home buyers have their choice of oceanfront or sound side property, both equally popular. There’s not much room for new expansion on this narrow spit of land, so home values are high, but prices are still reasonable as they work to catch up from the economic downturn.
Palm Springs, CA
This desert oasis is actually made up of 9 small towns, each with its own distinct vibe. Affluent home buyers are drawn to Rancho Mirage and Indian Wells, but bargains can be found in other nearby communities like Palm Desert. Many buyers come from Seattle or coastal California and are attracted to the small-town feel and dry desert air.
Fort Myers, FL
New construction is booming in this region of Florida, which includes the nearby resort meccas of Sanibel and Captiva Island. Local real estate agent Damon Vetere says nearly any property priced under $250,000 is snapped up immediately – and often for cash. Buyers are flocking here from the Midwest, Northeast, and Canada for the year-round sunshine and balmy temperatures.
Cape Cod, MA
Cape Cod came out of the housing bust mostly unscathed; prices remained steady but vacation home sales slowed a little. Now, big city buyers are back and are willing to pay top dollar for a slice of solitude. Younger families are joining with pre-retirees searching for second homes they can spend the summer in, and use as investment income the rest of the year.
The Movoto Real Estate Blog puts Tucson at the top of the list for retirees to Arizona, mostly for the low cost of living and spectacular year-round weather. Vacation home sales slowed considerably here in the past decade, so inventory is plentiful and prices are reasonable.
Financing for Second Homes
Most mortgage lenders who offer financing for primary residences typically also have access to programs for second homes. However, the product mix will vary. For instance, USDA, VA, and FHA loans are not options, to the best of our knowledge, for vacation homes. Down payments requirements may also be higher as will available interest rates.
Here are some additional resources for buying and/or researching second homes…..
- Does ot make sense to buy a second home? – USNews.com
- Tax Implications of Buying a Second Home – TurboTax.com
- Financing Vacation Homes – eLEND.com
- Insuring Second Homes – NYTimes.com
- Tax Rules on Renting Out Your Vacation Home – Bankrate.com
We recommend that you consult with a licensed mortgage lender, tax advisor, real estate professional, and/or financial advisor before pursuing buying a vacation home.
- Details of the WashingtonPost.com article can be found here.