Bob Waun was the guest speaker at the Resort and Second Home Market Forum at the NAR Annual Convention in New Orleans in November 2010.
Bob Waun, managing director of Americor Mortgage/Vacation Finance and a board member of the Condo Coalition, an advocacy group for homeowners associations, said financing — not demand — is the reason vacation property sales are in the doldrums.
Read more at http://www.inman.com/buyers-sellers/columnists/tomkelly/the-truth-behind-second-home-slowdown
I often write about, or use the phrase second home buyer characteristics, which makes sense. South Lake Tahoe is very much a second home resort real estate market.
Some 65 percent of area homeowners live elsewhere. This means that about a third of South Lake Tahoe homes are primary residences.
The National Association of REALTORS did a specific study on vacation or second home buyers. I thought it would be of interest to look at the most recent findings.
Before looking at the particulars, there are a few key characteristics of the vacation and second home buyer to always have in mind. These are important, especially as it relates to style and manner when representing a buyer:
• The vacation or second home buyer lacks urgency.
• The vacation or second home buyer is overqualified financially.
• The vacation or second home buyer is looking for a family retreat.
Of these, lack of urgency is really important to understand to best represent a buyer. What I like to do is “mirror” a buyers pace if I can. If a buyer seems to want to move quickly, I quicken my pace. If the buyer moves slowly, I respond in kind.
Sometimes, though, a particular house or situation does require urgency. An underpriced house, or one that is right priced and exceptionally attractive can require immediate action to get it.
In cases such as this, I do recommend that the vacation or second home buyer move as quickly as they possibly can.
If I ever quicken my pace, it is because I don’t want a buyer to miss out on something they obviously really like. I am never in a hurry just to make a sale. Buyer comfort to me is king.
2010 Vacation Home Buyers Survey (based on 2009 buying trends)
Sales and prices:
• Some 10 percent of U.S. home sales were vacation or second home properties.
• 1 percent more vacation or second homes sold in 2009 compared to 2008.
• The median age of the vacation or second home buyer in 2009 was 46 years of age.
• 28 percent of vacation orsecond home buyers were older than 55.
• The median household income of 2009 vacation or second home buyers was $87,500.
• 39 percent of vacation or second home buyers had a household income that exceeded $100,000.
• 73 percent of 2009 vacation or second home buyers were married.
• 49 percent of 2009 vacation or second home buyer households had no children younger than 8.
• 86 percent of 2009 vacation or second home buyers were Caucasian.
• 55 percent of 2009 vacation home sales were in a small town or rural area.
• 50 percent of 2009 vacation home sales were in the South.
• 71 percent of 2009 vacation or second home sales were single-family homes.
• 74 percent of 2009 vacation or second home sales were existing properties (not new).
• The median distance away from primary residence was 348 miles.
Method of Purchase and Financing:
• 54 percent of 2009 vacation or second home buyers used a real estate agent or broker.
• 10 percent of 2009 vacation or second home sales were a foreclosure or trustee sale.
• 27 percent of 2009 vacation or second home sales were directly from an owner (17 percent that buyer knew, 10 percent that buyer didn’t know).
• 32 percent of 2009 vacation or second home buyers looked first on the internet to shop for a home.
• 12 percent of 2009 vacation or second home buyers contacted a real estate agent first to shop for a home.
• 26 percent of 2009 vacation or second home buyers found the home they purchased on the internet.
• 25 percent of 2009 vacation or second home buyers found the home they purchased with a real estate agent.
• 70 percent of 2009 vacation or second home sales used a mortgage.
• Nine out of ten home buyers use the Internet in their home search process.
• Is our experience that buyers contact us after internet searching first.
• More often we find the home the buyer buys, rather than what they exactly saw on the Internet.
Buyer Motivations and Expectations:
• 89 percent purchased their vacation or second home as a family retreat.
• 29 percent purchased their second home because it was a “good investment” opportunity.
• 25 percent purchased their second home to rent to others.
• 14 percent purchased their second home for tax benefits.
• 26 percent purchased their second home as a future primary residence.
• 80 percent purchased their second home because they believe now is a good time to purchase.