by Melanie McLane
Chair, 2012 NAR Resort and Second Home Real Estate Forum
It’s spring in North Central Pennsylvania. Fishing season opening day has been here already, and we’re busy getting our cabin ready for the summer. Across my region, this is when we return to camps and cabins for another season. A big portion of the real estate my husband and I sell are second homes used for fishing, hunting, hiking, snowmobiling, ATV riding, and just generally kicking back and enjoying life. This year, I’m reminded again of how special a second home is to so many families. Our first grandchild, Cayson, turns one in June. We had him at the cabin last year as an infant, but now he is walking and into everything. “Pap-Pap” (aka Jim) and I couldn’t resist getting three chairs for the creek bank–and one is Cayson-sized. Our old Adirondack chairs had finally given up the ghost. This is the spot we take our coffee in the morning and watch the mist rist from Kettle Creek and the fish taunt Jim (“You can’t catch us!”). Thisyear we had to have a place for Cayson–so whether he is there with us, his parents, or all of us, he has his own chair.
But the bigest part of why we love this place is what it means to our family. Cayson is the fourth generation of McLanes to come to “Forty Acres,” our place in the mountains of Pennsylvania, in Potter County. The original cabin was built by Jim’s dad and a team of his friends during the 1930s. Our son Clark, with some assistance, built a new cabin there in 2010. But the traditions and memories continue: smores on the campfire, card games at the old oak table, coffee in the morning along the creek, stream hiking on hot days and the absolute peace and stillness at dusk, as we watch the wildlife go to the creek.
Many buyers want second homes just for this reason–a place to enjoy with their families–a place to unwind and make memories. In our hectic lives, we can count on restoring ourselves with a trip to this special place. When I talk to those who have second homes–whether a cabin in the woods or a beach house, a ski chalet, or a condo in a tropical place–everyone cherishes the time and memoris they have there. One of the best parts of my job is helping people find a place to carve out time and make their own memories.
by Melanie McLane
Chair, 2012 Resort and Second Home Real Estate Forum
Often, one of the biggest issues for REALTORS® selling second homes is obtaining financing, including getting a satisfactory appraisal. To effectively value a second home, the appraiser must be aware of the “relevant characteristics” of the property and how they impact value. “Relevant characteristics” is a phrase right out of the Uniform Standards of Professional Appraisal Practice, known as USPAP, which is the ethical and legal code all licensed and certified appraisers must adhere to. USPAP is embedded into license/certification laws in all states in the US.
A relevant characteristic of a property is something that is quite simply, relevant to the value. Relevant characteristics can emerge overnight. My recreational market, which is hunting camps, cabins and fishing lodges in North Central Pennsylvania, has a new relevant characteristic—gas. Specifically, gas rights and gas leases are now a huge relevant characteristic as we are in the center of Marcellus Shale. Five years ago, most of our sellers did not know (or care) if they owned their gas rights. Today, it can make or break a sale.
Appraisers not familiar with second home markets can miss the importance of relevant characteristics. I have a REALTOR® friend who sells homes in the Poconos in Pennsylvania, and sold a property with lake frontage. Unbelievably, the first appraiser (who came from Philadelphia, about 3 hours away) used comparables not on the lake, and made no adjustment for frontage—despite extensive market data which supports the value of lake frontage.
In places like Aspen, ski in/ski out is a huge influence on value. In Lake Tahoe, a dock will add value. In your market, it may be a number of things. The important thing for you as an agent to find out is whether or not the appraiser is familiar with your market and its relevant characteristics. Do not hesitate to (nicely) educate the appraiser about what you consider to be relevant characteristics. Supply market data to support what you are telling the appraiser. Encourage your local lenders to insist that whoever orders appraisals for your market only assigns them to appraisers familiar with the relevant characteristics of your market.
Phoenix, Miami, Tucson, in Michigan and online. An auction is the method used to sell properties for vacation and investment. Do you have the tools needed to participate?
According to recent survey by the National Association of Realtors®, the number of people buying second properties as vacation homes rose 7.9 percent to 553,000 in 2009 from 513,000 in 2008.
The market share for vacation homes rose to 10 percent, from 9 percent in 2008, and the median home price for a vacation home was 169,000 dollars in 2009, compared to 150,000 dollars in 2008.
NAR Chief Economist Lawrence Yun said the higher home prices reflects increased sales in higher priced markets like Florida and California, where home prices “became highly attractive for buyers over the past year.”
Half of vacation homes purchased last year were in the South, 21 percent in the West, 17 percent in the Midwest and 12 percent in the Northeast.
This article is a summary from a forum hosted by Knowledge@Wharton at the New York Stock Exchange in December 2009 called “The Road to Recovery: Investing in the Global Real Estate Rebound.” Let us know what you think about the economists’ presentations.
Published: January 20, 2010 in Knowledge@Wharton
Here’s a great take on how international companies are investing in the US and the effects from PRI. What’s happening in your community?
While foreign investments have created jobs in Mississippi, some feel the state’s pro-business stance could backfire.
More Americans are looking for work today than at anytime in the past 26 years. The dollar keeps getting weaker. Times are tough for many Americans. But for foreign companies looking to invest in the United States, America looks pretty attractive. Roughly five-and-a-half million Americans work for foreign companies operating in the U.S. States across the country are vigorously competing for their business. But there are pros and cons to foreign investment. What does a state get out of the bargain?
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The Philippines offers affordable real estate investments and retirement opportunities in a tropical climate
For many British, Australians and Americans, retirement time is just around the corner. At home, with low interest rates and high cost of living, the prospect of trying to live on a pension, in old age, is a daunting one unless you are prepared to substantially downscale your lifestyle. For some, moving to retire in another country is an option which has been successful in the past with Spain, Portugal, Mexico and Puerto Rico being among some of the more popular destinations. But why not consider retiring in the Philippines?
Over the past decade, the Philippines has become a retirement haven for thousands of foreigners, particularly the Japanese, Korean, and Northern Europeans. Along with Thailand and Malaysia, the Philippines developed communications, infrastructure, and service delivery systems specifically geared to meet the needs of foreign retirees. Better yet, unlike most European Countries and South America, nearly everyone speaks English in the Philippines.