The National results are very revealing when looking at Second home and vacation living across the country. The Northeast Resort real estate may be the shinning spot in the Fall 2011 national survey of “resort real estate professionals” just published.
Not because we are selling more, but the conservative nature of the northeast kept the amount of inventory from being built way ahead of the consumer demand. The last real estate down cycle taught developers a good lesson.
The Kelsey & Norden Resort real estate survey was sent to: Developer (equity invested) sales manager (associates & consultants) Marketing manager, Design (planning & legal), Hotel –club operators, Ski Resort, financial adviser, lenders and vacation property owners.
The Core of the respondents were asked about their primary amenities: Golf course, Ski area, Multi-amenities, Beach and lakes…were the highest respondents in that order.
As one might expect the vacation home industry is expected to languish until after the 2012 elections. But the news was not all bad a theme of staying lean and mean in the interim has many developers planning for new products and projects to be ready to launch in 2013 -2014. Staying with the same floor plans and amenities – will not bring success in the future. The next generation of consumers wants different resources, recreation and activities and in fact so does the current consumer as they plan for a retirement in a recreational life-style.
In 2015 the last of the baby boomers will turn 52. This was the group that fueled the second home industry through the peak sale activities from mid 1990’s – 2005. But with many of these boomer’s seeking continued fulfillment in lives – volunteering, entrepreneurial roles and wanting to stay connected and engaged with their communities this could very well indicate that projects with the right social conditions can extend the ownership interests of this group. The Generation X consumer in their 40’s will play a significant role as this “development mix” unfolds.
Current second home owners and future prospective customer prioritized the following important mix – developers really need to incorporate in designs:
- Increased emphasis on having a place for quality time for family & friends.
- Desire to reduce both upfront and ongoing costs
- Corresponding willingness to have smaller lower cost homes
- Willingness to eliminate some amenities / services to save costs
- Increase desire to be connected & contribute to their HOA community.
- Reduced interest in private clubs & exclusivity in general.
Making it on to a women’s short list has never been more important than it is today.
A very interesting side note was developed in this current survey that had been over looked in the past. From a sales and marketing stand point the women consumers indicated they were willing to compromise on the residence size, and bedroom quantity in order to effect a cost cutting measure when seeking a second home. Women were also willing to “not join the club” in order to afford a vacation home. Value added designs the so called “good deal” was more appealing to women than the men in the survey. Developers take not – sell the ladies and sell the properties. Side note 45% of women use facebook weekly while 36% of men use this social media.
Untested sites are an uphill battle – Loyalty – is a close second to location.
Buyers choose a place with which they identify and have established connections and they refer their friends…this is the loyalist market condition. Starting a new project out in the sticks because the land was inexpensive is not a good business plan. Consumers overwhelmingly suggested market uncertainty was the biggest hurdle to buying (not price). This should make developers heed the thought of not striking out in to a new area with “no” current confidence or loyalty – no one wants to be the test subject of a resort miles from no where.
Social opportunities to engage with family, friends and community are on the hot list for club directors.
Respondents to the survey suggest there is more demand for the following:
“PROGRAMS” in the mix of social activities offered in resort living.
Health and wellness activities , Outdoor education, adventure 4 season activities, Food and wine programs, Performing arts, and life long learning.
“AMENITIES” in the new mix, Zip lines, Fire pits, Community gardens, Gathering areas, Dog friendly units (parks), community buildings, fishing, and PATHS for hiking –biking and snowshoeing.
Price Points & Product mix – Northeast Evaluation (World study available).
The survey looked at Canada – Latin America – Caribbean – Southeast – Rockies – the Northeast and graphed the results for all participants. Nearly 40% of the surveyed indicated that under $500,000 was the price point needed to be successful in the coming product mix…the Northeast showed it’s conservative side once again with 8% suggesting under a $100,000 was the target market, 19% under $300,000 and 29% suggesting under $500,000 was the product mix likely to sell – or a total of 56% suggesting that real estate under $500,000 was the overwhelming target market
MIX: Suggestions of types of development that the professionals see as being the most successful in the future are as follows: Condominiums 29% / Single family 29% / Townhouse 22% which is 70% of the product mix…in smaller amounts Cottages, Destination clubs, and Time share make up the balance of the Northeast mix.
Results : The Boomers are looking for quality time with their families and the Generation X is moving in to their ideal age for second home buying…While boomers will require access to quality health care – the Gen X group will require lower priced homes to accommodate their pocket books. Knowing the consumers and planning for their needs can result in a successful mix of future product designs.
The location of these communities will need to be in established areas where consumers can connect…and create a loyal following. It appears we don’t have to recreate the wheel but we do have to make it more aerodynamic and one size is not going to fit all. There are many opportunities to succeed once you identify the target.
I have worked for a builder developer in the White Mountains of New Hampshire with the majority of our projects being designed and built at ski resorts or on lake front communities for the last 30 years. I believe the general finding of this survey are spot on and hope others will give it much consideration as they make their future development plans. I have been a participant in this annual survey for a number of years, and the findings hold very true each time it’s published.