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.
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
Here’s a great report from NAR’s Senior Regulatory Representative, Russell Riggs
ImmigrationWorks USA and the U.S. Chamber of Commerce have teamed up to develop a positive report on the H-2B program. The report – “The Economic Impact of H-2B Workers” – concludes that many areas and economic sectors of the country, including resort areas, would be unable to thrive as a result of the H-2B workers that come to the U.S. on a temporary basis. The report uses economic analysis and anecdotal case studies to examine the impact of H-2B workers and concludes that, contrary to critic’s claims, the program does not depress the wages of U.S. workers in similar occupations and H-2B workers do not take jobs from their U.S. counterparts.
The report also makes some recommendations on how to improve the program: cut burdensome regulations that make the program difficult for employers to access and streamline employee processing procedures. These types of changes will make the program more effective for companies and workers and make it more responsive to changing labor markets. Here’s hoping that the shake-up in Congress draws attention to the this important program.
Read the entire report at http://www.immigrationworksusa.org/index.php?p=1 . The report, in PDF format, is listed in RED in the right-hand column of the page and is called IW-Chamber H-2B report.
This is a great article that highlights other possibilities in the Resort and Second Home market that may be untapped at this time. It’s not just about beaches and snow! Enjoy!
by: Lara Hertel of Reuters
TORONTO — San Fransisco Bay-area couple Kate and Dale never expected to be landlords. But that’s exactly what happened when they decided to buy a three-bedroom townhouse for their daughter in her sophomore year at University of Washington in Seattle.
“Some of the campus housing we saw was horrible, and it was expensive, too,” says Kate. “We decided we could create a safe, good quality home for her and we thought it would be a good investment on top of it.”
Kate and Dale represent a new trend in the already-popular college town real estate market: they’re called “parent investors,” a savvy group of homebuyers who are opting to purchase a house in their kids’ college town instead of spending money on rent or dorm fees. A new survey from Coldwell Banker found that 64 percent of its real estate agents are seeing a “significant number” of parents investing in homes for their kids to live in while attending university.
“Interest in college towns is always going to be high, especially for people who once went to school there — and people are seeing value in this investment,” says Jim Gillespie, CEO of Coldwell Banker.
The lure of college real estate appears to be recession-proof. Seventy-three percent of those surveyed said they see a significant number of investors buying homes near campus and renting them out despite the economic downturn, with only 21 percent seeing a decrease in this trend over the past five years.
For Kate and Dale, the investment didn’t exactly pay off in spades. The $520,000 townhouse they bought three years ago has dropped in value, so they’ve decided to hold on to the property for a few more years until the market turns around. (Their daughter Sarah has since graduated and moved out.) Still, Kate says the decision to buy a home saved her a lot of unnecessary worry. They installed a security system, it was close to campus and two roommates helped to pay the mortgage.
“The rent in some of these college towns is so high and in my mind, I’d rather pay myself rent,” she says.
Costs are a big factor: Room and board fees for 2010-2011 have seen a 4.6 percent jump at a public four-year state universities and a nearly 4 percent rise for private nonprofit universities, the College Board reports.
But not all college towns are as pricey as Seattle. Coldwell’s college home listing report provides the average home listing price of four-bedroom, two-bathroom properties for sale in markets home to the 120 schools in the Football Bowl Subdivision. The listing finds that nearly two-thirds of the college town markets have an average home listing price of less than $250,000.
Topping the most-affordable list is Muncie, Indiana — home to Ball State University – where the average home listing price is $105, 115. (By contrast, Stanford University’s Palo Alto, California is the most expensive college town market, with an average home listing price of $1,385,652.)
And college towns aren’t just for investors: Fifty-one percent of the survey respondents noted they’re seeing a lot of alumni homebuyers, and 49 percent see a significant number of retirees moving to their college town.
Gillespie is one of them. Last September he bought a 3-bedroom townhouse for $120,000 in Champaigne, Illinois to be near his alma matter, the University of Illinois. He travels from his home in New Jersey to Champaigne about six times a year, often to cheer on the Illinois Fighting Illini. He says the value of his home has already increased, and it will likely serve as his retirement home some day.
Besides the sporting events, college towns have plenty to offer in terms of culture, restaurants, medical facilities and a robust economy, Gillespie says.
“This is quintessential America. People have a special spot in their hearts for these places,” he says. “Some of the best times of their lives were spent in college.”
Consider the international investment that comes to your community. Are you capturing those clients? See latest research on the international sector nationally.
International home buyers are increasingly attracted to property in the U.S., according to NAR’s 2010 Profile of International Home Buying Activity. “While all real estate in the U.S. is local, the same is not true for property owners,” said NAR President Vicki Cox Golder. “The U.S. continues to be a top destination for international buyers from all over the world.”
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