Second-home locations\u2014viewed as a safe destination when the pandemic disrupted how people live\u2014have gained full-time residents, and houses are changing to meet the demand.<\/p>\n\n\n\n
3 Takeaways<\/strong><\/p>\n\n\n\n As COVID-19 spread, many people made a beeline to their more isolated second homes or vacation rentals to hunker down and stay safe.<\/p>\n\n\n\n Slowly, the idea that those destination homes would be short-term gave way to the notion of making them a permanent residence. People enjoyed the safety, space, fresh air, and outdoor recreation at their retreats. They found efficiency working remotely and having their children learn virtually. And many found it propitious to buy with low interest rates and a strong stock market.<\/p>\n\n\n\n \u201cBuying a house is a feel-good purchase, and it became the right time after many put it off,\u201d says Diane Saatchi, associate broker with Saunders & Associates<\/a> in East Hampton, N.Y. <\/p>\n\n\n\n Since the pandemic started, Mimy von Schreiner with John R. Wood Properties<\/a> in Southwest Florida, has had three clients purchase vacation homes who then made them permanent residences.<\/p>\n\n\n\n Whether homes are for full- or part-time use, all the demand has led to a dearth of inventory, now exacerbated by the spring buying season and many people planning their summer vacations.<\/p>\n\n\n\n Von Schreiner says inventory in her market is down 56% from a year ago, which she attributes to frenzied pandemic sales and rentals, an expanded pool of younger buyers, and existing homeowners staying put.<\/p>\n\n\n\n Deb Martin, CEO of ERA Cape Cod Real Estate<\/a> in Denis, Mass., has also seen inventory shrink for similar reasons. But those reasons are compounded by another trend beginning before the pandemic: retirees not selling as they once did to move near grandchildren or head to senior-living facilities.<\/p>\n\n\n\n Because of these tough market conditions, agents must help clients by encouraging them to prioritize their wish lists, stay on top of what\u2019s available, and communicate often. These five questions will help real estate pros guide the discussion.<\/p>\n\n\n\n Many buyers and renters now are willing to travel farther to find the right home and a lower price. \u201cMany don\u2019t anticipate going back and forth as frequently, if at all,\u201d says Jennifer Grimes, whose Red Cottage Inc.<\/a> in Grahamsville, N.Y., offers vacation rentals, and her Country House Realty<\/a> represents homes for sales in the Catskills.<\/p>\n\n\n\n In the last year, she\u2019s seen her rural Sullivan County become the epicenter of escape for people coming from New York City, 110 miles away. \u201cIt was last to the party in popularity after better-known Dutchess, Ulster, and Orange counties, but interest has surged as a destination and demand has far outpaced supply,\u201d she says. To meet demand in recent years, Grimes has added 10 agents.<\/p>\n\n\n\n Architect Mike Aziz, AIA, a partner at New York City-based Cooper Robertson<\/a>, an architecture and urban design firm, says many of his firm clients will drive farther, as well\u2014two to three hours from a major city, especially for a primary residence.<\/p>\n\n\n\n The same is true on the West Coast where Chris Neighbor, president of SummerHill Homes<\/a> in San Ramon, Calif., sees huge interest in his firm\u2019s infill townhouses from tech workers leaving the expensive Bay Area and their tiny apartments.<\/p>\n\n\n\n \u201cThe average tech employee no longer works on a campus for 14 hours a day. They can get more space,\u201d he says.<\/p>\n\n\n\n In other markets, particularly for long- and short-term rentals, some people are now willing to drive to rural sites once under the radar, such as parts of Kentucky, Michigan\u2019s upper peninsula, and the area around Deep Creek Lake, Md., says Jeffrey Breece, whose San Francisco-based Beyond Pricing<\/a> offers a revenue management platform for short-term rental owners and managers.<\/p>\n\n\n\n Many locations are experiencing extended rental seasons with bookings made further out than pre-COVID-19. For example, in Florida, salesperson Angela Waldrop with Dale Sorensen Real Estate<\/a> in Vero Beach, has seen bookings extend beyond the typical April 30 cutoff into summer. \u201cExcept for a minor blip when the coronavirus emerged, we\u2019ve not had a break. Many people also book for longer three- to six-month periods,\u201d she says.<\/p>\n\n\n\n Jason Milovich, broker-owner of Bluefish Vacation Rentals<\/a> in southwest Michigan, about 74 miles from Chicago, has also seen lines blur between high and low seasons.<\/p>\n\n\n\n \u201cThe busiest rental time used to be from Memorial Day through Labor Day, followed by a shoulder through November. But it has stayed busy from last December until now,\u201d he says.<\/p>\n\n\n\n The difference in rental costs has also diminished between the high season, weekends, and holidays, and the low season and weekdays, Grimes says. Even the idea of a best time to buy has vanished.<\/p>\n\n\n\n \u201cSales now happen at all times if there\u2019s inventory,\u201d Waldrop says. <\/p>\n\n\n\n With little inventory, houses often sell at full price or above, and oftentimes on the day listed. \u201cBuyers tire of repeatedly missing out, and many overpay to make a sale work,\u201d Grimes says. As an example, she cites a property listed at $425,000 that went 35% higher for $575,000 without an inspection three days after hitting the market. It was seen by 25 potential buyers, and the winning bid was all cash.<\/p>\n\n\n\n In von Schreiner\u2019s Florida market, average sales prices in January were up 18.2% from a year ago, she says. Neighbor has seen listings in his California area climb 20% above the asking price with as many as eight to 12 offers.<\/p>\n\n\n\n Rental costs reflect a similar uptick. \u201cMany are going 25% above the (normal) price. A pool brings a premium,\u201d Breece says. In Waldrop\u2019s Florida market, luxury homes have been renting \u201cnonstop\u201d since the start of the pandemic, she says, for $20,000 to $35,000 monthly, or 30% above a year ago.<\/p>\n\n\n\n Single-family homes generally appeal more than condos since they eliminate sharing elevators, lobbies, pools, dog parks, and gyms. <\/p>\n\n\n\n Exceptions abound, especially when designs focus on keeping renters or buyers apart. Developer Valor Capital, which is constructing Serena by the Sea<\/a> in Dunedin, Fla., near Clearwater, went back to the drawing board when the pandemic hit to add touchless features, individual condo air-intake systems, and a concierge service to deliver spa treatments, walk dogs, organize closets, says Regina Sotomayor, chief sales officer. More than half the 80 units have been pre-sold. <\/p>\n\n\n\n When it comes to homes, many buyers and renters seek greater square footage to accommodate more family and fit their new mindset. \u201cThey no longer think of it as a vacation house but a primary home that needs to be comfortable for long-term,\u201d Saatchi says.<\/p>\n\n\n\n That was the case with the home that designer Staci Munic<\/a> bought when she switched her primary residence from Chicago to Palm Springs, Calif., and sold a California condo that was previously her vacation getaway. \u201cI found I loved being here and having a relaxed lifestyle with morning bicycle rides,\u201d she says. But she was glad she rented first. \u201cIt gave me the opportunity to experience an area in different seasons and alleviate buying under pressure,\u201d she says.<\/p>\n\n\n\n Other buyers who don\u2019t know whether their home will be temporary or permanent also desire more space. \u201cAbout 95% of SummerHill\u2019s buyers are first-time homeowners who like getting a second bedroom, office, fireplace, space for their Peloton bicycle, and balcony\u2014especially after years of renting a tiny apartment,\u201d Neighbor says. He expects many will stay post-pandemic, even if they commute occasionally to a corporate office. <\/p>\n\n\n\n For Tish Horton, a warmer winter climate and chance to live near a daughter drew her to a second home in Newland\u2019s masterplan Nexton community<\/a> in Summerville, S.C., 30 miles from Charleston. She plans to commute to her other home and daughter in Dayton.<\/p>\n\n\n\n Working from home has led people to stay longer, often with extended family members. Buyers and renters alike are looking for Zoom nooks and smart designs for ease of daily living. Other amenities in high demand are garages, ample storage, fenced yards (for pandemic-era adopted pups), closed rather than open kitchens, greater access to outdoors, and wellness programs.<\/p>\n\n\n\n \u201cWell-living is the new green,\u201d says Manny Gonzalez, AIA, LEED AP, principal at KTGY Architecture + Planning<\/a>\u2019s Los Angeles office. \u201cPeople look for air and water filtration, home monitoring, and sustainability.\u201d <\/p>\n\n\n\n\n
\n\n\n\nLess Inventory<\/h3>\n\n\n\n
1.<\/strong> How far from your current home are you willing to go?<\/strong><\/em><\/h4>\n\n\n\n
2. <\/strong>Does peak season matter to you?<\/strong><\/em><\/h4>\n\n\n\n
3. <\/strong>What\u2019s your price range?<\/strong><\/em><\/h4>\n\n\n\n
4. What types of homes and amenities are you looking for?<\/em><\/strong><\/h4>\n\n\n\n