Second home sales surging, but buyer expectations have changed
October 8, 2020
Demand for second home within a reasonable drive of a family's primary home is booming, according to a report from John Burns Real Estate. Developers and builders who understand these buyers' mindsets and preferences stand to benefit.
Researchers found second homes in convenient locations "are benefiting from a rise in the YOLO (you only live once) mindset as people across the country look to get away and enjoy life as safely as possible during the pandemic."
Researchers at Burns found five characteristics are contributing to record-setting activity:
- Buyers favor drive-to destinations. They cited figures from the Sierra Tahoe MLS, which logged a 200% year-over-year increase in sales during July, and from Long Cove, a luxury lakeside masterplan community near Dallas, where sales reached all-time highs in June and again in July. Also mentioned were Bend, Oregon, when YOY pending sales jumped 150%, and Rehoboth Beach, Delaware, where sales doubled from a year ago, thanks in part to buyers from New York and New Jersey.
- Second-home buyers with school-age children have a strong preference for get-away destinations that are within a four-hour drive.
- Now that people can work remotely and children can learn remotely, homeowners are measuring second-home stays in weeks and months, rather than days. "This use pattern flips the traditional weekend second-home model on its head." It also means high-speed internet, home offices, and learning spaces for children are important, if not essential.
- Today's buyers tend to prefer a finished product so they can enjoy their second-home lifestyles now, rather than purchase a homesite and wait months or years to design and build the home. For to-be-built homes, Burns recommends a simple and short build process that includes consumers' most sought-after design elements. (Burns is tracking trends.)
- "The YOLO mindset is driving sales." In addition to fear of missing out (FOMO), the psychology of "you only live once" (YOLO) is driving the surge in second-home sales. Buyers are opting to use funds that may have been allocated to more traditional vacation travel to purchase a home now. Additionally, buyers are showing more interest in lifestyle and use rather than rental potential and future appreciation.
Team members from John Burns real estate who contributed to the report included Chris Dorociak, senior manager, consulting; Ken Perlman, managing principal; and Lesley Deutch, managing principal.