Many people own 2nd homes, usually vacation or getaway properties. The question is, what do you do if you no longer use that property? Sell it? Keep it?
This past summer we went to the mountains for a short period. We were amazed at how much new and expensive construction that was taking place. I was scratching my head with curiosity. I mean, Pam & I drove around the entire area. We drove up and done mountainsides replete with new roads and new construction. We were fascinated.
By chance, we ran into a local real estate pro and had coffee. The subject of new construction came up (wink, wink). To be honest, I was surprised by the response.
Now, I've never really given Air BnB much thought so I was surprised to learn that the majority of these homes were being constructed for the express purpose of using them as Air BnB investments. Then I learned that my niece and her husband own 2 investment Air BnB properties and one of our sons is preparing to enter that realm too. I hadn't realized how lucrative the venture is. But, let that be.
The answer to "Is It Time To Sell Your Second Home?" is, it depends on your reasons. But, before you do, explore all the possibilities with your Real Estate Professional.
Is It Time To Sell Your Second Home?
During the pandemic, second homes became popular because of the rise in work-from-home flexibility. That’s because owning a second home, especially in the luxury market, allowed those homeowners to spend more time in their favorite places or with different home features. Keep in mind, a luxury home isn’t only defined by price. In a recent article, Investopedia shares additional factors that push a home into this category: location, such as a home on the water or in a desirable city, and features, the things that make the home itself feel luxurious.
A recent report from the Institute for Luxury Home Marketing (ILHM) explains just how much remote work impacted the demand for second and luxury homes:
“The unprecedented ten-fold increase towards remote work since the pandemic is an historic development that will continue to fuel second home demand for many years to come.”
But what if you bought a second home that you no longer use? If you’re now shifting back into the office or are seeing your priorities and needs change, you may find you’re not utilizing your second home as much. If so, it may be time to sell it.
And if you own what’s considered a luxury home, buyer demand for it may be even greater. In another report, the Institute for Luxury Home Marketing explains:
“. . . the last few years have left their legacy for the luxury market. While it might only represent a small percentage of the overall real estate market, luxury homeownership’s influence is growing. Not only has the purchase of homes valued over $1 million (a figure considered by the National Association of Realtors to be a benchmark for luxury) tripled from 2.6% to 6.5% since 2018, but demand for multiple luxury properties has soared over the last two years.
This phenomenal increase has been driven by a growing affluent demographic who consider owning a luxury property a necessity in their asset portfolio. All indications are that this trend is here to stay, albeit that demand is set to return to a more sustainable level.”
If you own a luxury second home that isn’t being used as much anymore, now’s the time to sell. There are still buyers in the market who are looking for a home like yours today.
Bottom Line
Connect with your real estate advisor to explore the benefits of selling your second home this year.
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