The Second Home Muse

Great Real Estate Leaders

In our era of specialization, it is refreshing to find at least one person who realizes that regardless of their specialization, all great people have wisdom. Recently, journalist Chris Taylor released a new book, "Passing It On: Life Lessons of 130 Great American Leaders." What is so unique is that the people in the book come from all industries, including the real estate field. Real-estate legends like Margaret Kelly of Re/Max, Jim Gillespie of Coldwell Banker, Dottie Herman of Prudential Douglas Elliman, and Pamela Liebman of Corcoran Group each contribute their advice to the future generation. They join the ranks of other leaders in caring that the next generation learn from the wisdom of the current generation.

Thanks, Chris, for a good book, and most of all, for looking further afield and including the real estate greats.

Investing in Houses

While all the numbers get bantered around regarding the housing market, it was refreshing to read a recent article in the New Yorker Magazine that goes a bit deeper. It poses the question, 'What does that median home price tell us anyway?' I have long believed the number was highly over-rated as an indicator. As the New Yorker article points out, when we compare August 2005 to August 2006, for example, we are comparing completely different sets of houses. So if only the expensive ones sold, or, vice versa, only less ones sold, you don't really see how prices are changing across the board. The article points out that there are statistics that track how the same house has fared from sale to sale.

However, even more interesting is the question of whether housing prices have been increasingly rising. For one thing, they point out that if you adjust for quality of home, prices between 1977 and 2003 reduced the return to sellers figure by 40%. If you adjust for inflation, prices were 8% lower in 1991 than 1979. And if you adjust for the give-aways that sellers are offering, the price increase is also less. The main point is that declaring that prices have not fallen for a straight year since the Depression is just not accurate. If we could get better on tracking accurate information, then the ups and downs would be far better understood, and make us much wiser investors, buyers and sellers. My recommendation: read the New Yorker article.

Second Homes for Families

Having a specialty sometimes helps everyone. One realtor we read about specializes in helping families find homes. And she had some great tips, that can also be applied to finding a second home.  Some of these might not occur to you to check on, because you assume to know the answer. Look at this list and see if you need to add more to your vacation home search criteria:

- Are there walking trails suitable for you and your toddler?
- Do you need to improve backyard safety for toddlers and pets?
- Will you be able to open the garage without waking up the baby?
-  Will the HOA allow a basketball hoop or tall swing set?

In short, if you are getting a second home for your family's enjoyment, be sure to include the essentials in a 'must-have' list. Thanks to Elena Thurston for these.

Housing Market: Yes or No?

What's a guy to think? Yesterday, driving home, the radio was quoting a government official: "The economy is strong. The housing slump is simply a much needed correction to create a sustainable growth rate." Sounds good to me. Then today, I read the headlines, "The economy grew more slowly in the third quarter than at any time since early 2003, held back by a deflating housing market."

Give us a  break, please. I don't mind a slump in the market, nor will I panic about a slump in the economy. But for goodness sake, decide which is the chicken and which is the egg. Stop dropping them both in the pot at random, making a tasteless stew.

Thanks for listening. Your comments?

Perfection in Vacation Homes

When an successful interior designer gives tips on working with a second home, my ears perk up. However, be prepared...these tips are not about getting matching Gucci lamps (if there is such a thing...do they only make clothes?) or faux-fur throws. Instead, an article from the Sentinel Newspapers  give an entirely different slant. Designer Fhlipps bought a country home, and realized that "You have to learn to embrace the dinged, the dented. " Scratches, dings and the wear and tear of life can make a country home feel perfect, if you are willing to see the perfection.

He also shares some interesting tips about picking a vacation home. One that stands out is to find an environment totally different from your home. Great advice. Otherwise, the psycholoical 'get-away' doesn't really happen. And low maintenance furnishings make living on vacation, a vacation! Rather than scurrying around trying to keep everything perfect, leave that for your home. On vacation, how about just learning to chill! Thanks for the good advice, Fhlipps.

Affluent Buy Waterfront Second Homes

Two big players in the Affluence league, Sotheby's International Realty and Architectural Digest, shared their knowledge of the second home market recently. Their joint study of subscribers to Architectural Digest reveals really interesting facts. First, 49% of people who have 3 or more homes, plan to get another in 2 years. Is this love, addiction, or brilliant investing?

Another neat fact, which the visitors to EscapeHomes constantly confirm: 75% want waterfront. Of course, the neat thing with the affluent is that they can afford it, too!

And finally, move over baby-boomers. The survey shows that 44% of the under-45 group are into second homes.

What's it all mean? I don't draw any conclusions from this one. Just musing on the fact that seems that second homes are still in, despite the market concerns. At least with those who can afford to still be in. Reminds me of my midnight poker games, where the last ones in were always the ones with big pockets.

Tips for Sellers in a Buyers Market

One good turn deserves another. Thanks to Move.com for answering our plea for seller tips. They pointed us to a Naples article. Reading it made me smile. I have an editor who is always saying I need to put my 'spiritual/human" values before money. I read through the tips for sellers and thought perhaps it was written by a sage with a long beard sitting on a mountain top: Drop greed, get rid of ego, see things as they are, be disciplined, be generous with incentives. Wow. Sounds like selling your home in a buyers market is a straight ticket to enlightenment.

However, in all seriousness, it really is true that the basic values which make for a good life will also make it much easier to deal with so-called adversity; in this case, a buyers market. Take time to think about what you really want from your life, and use the sale of the home to further your dreams, not to postpone your dreams just to get a higher price. Then, everyone wins.

In terms of concrete tips, the most useful to me was about pricing realistically. If you ask 10 to 20% over what you will take in a normal market, the suggestion is to go 3-5% in  a buyers market, after you know what the others in your area are bringing in. Realistic pricing makes the whole process much easier for everyone concerned. Now, for enlightenment...

Vacation Homes as Business

I just read a paradoxical article. It was about an appeals court in Maryland deciding about the legality of renting houses in a subdivision that was trying to preclude vacation rentals, as far as I can gather. The subdivision is in a popular tourist destination in Western Maryland. What was odd was this: The court ruled that people could rent their homes to single families. However, its decision said that "...renting the homes did not constitute a commercial purpose, which would be prohibited by the subdivision’s covenant."

Seems to me that is a bit odd.  Surely getting rental income is commercial. When we file taxes, we have to file it under  a schedule C, ie, it is a rental property business. Our taxes change on the property, etc. So I wonder where in the world this court got their opinion. The paradox: I"m happy to see vacation rentals upheld, but sad to see them upheld in a way that won't stand up to scrutiny. Comments, anyone?

Buying in a Buyers Market

With a buyers market in many areas, and certainly vacation homes are no exception, it's great to find some useful tips on how to proceed. And proceed is the key word here. Waiting for prices to keep dropping doesn't actually help you get your dream house. The Orlando Sentinel had a few good points worth passing on to buyers. These stood out for me:
1. When you find the right house at the right price, buy it; don't start haggling just to get a better deal.
2. If you negotiate, do it intelligently; just because it's a buyers market, don't insult the sellers with ridiculous offers.
3. Watch out for gimmicks. This is a good one. If the sellers have give-aways, be sure they are related to the property itself. That's the only thing that is actually adding value to the price.

Now, it would be great to have some tips for sellers!

Log Homes for Vacation

A nice article from Arkansas highlights another aspect of baby-boomer taste: log homes. I'm not sure if the attraction dates to the fact that many baby boomers grew up playing with "Lincoln Logs."  Whatever the reason, log homes are drawing attention from baby boomers as preferred vacation and retirement home building material. They have an incredibly natural and warm feel to them, and are not lacking in comfort in any way. Rather, they have a rustic look and can be cut to any style. There are log home kits, as well as companies that build log homes. Either way, it creates a home that is more energy efficient, and, if the right choice of wood is used, also more sustainable for our planet. Perhaps the biggest challenge is to be sure that other planet residents don't decide to eat the logs for dinner. Other than that, it's worth checking into.