Here is my question to the ActiveRain community? Do you think that we will see people stop buying second homes or vacation homes in the near future and just renting luxury homes for a month or two at time?
It is sad how our minds work. You start off working hard and having success. Typically, you need to get away from work and you head to the beach or the desert for some sun and relaxation. Two days into the trip you say to your husband or wife, "This is great, I could live here full time". This is where it all starts. Then you start to think, we should buy a "little place" here for a 2nd home. The little place quickly turns into a real home and before you know it, you have a 2nd home.
I have been thinking about this a lot over the past several months. My primary market is Paradise Valley and North Scottsdale, AZ which have a lot of 2nd, 3rd, and 4th homes. I am 33 and have lots of friends whose parents and even some of my friends who have 2nd homes. All I here is that they do not have enough time to spend at the 2nd home and that they are always having something to maintain on that house. They have typically bought or will by two of everything now, so that when they leave their primary home they will have the same thing at their other home. I have seen a trend of people who have bought a 2nd home typically sell it after about two to three years, because they are simply not able to use the property the way they thought.
Disclaimer 1- I am talking about people that own 2 properties (Primary Home and a 2nd home or a vacation home for personal use), I am not talking about an income producing second homes. I also am not talking about the people who go from one of their 4 homes via their private jet. These people it is all about convenience, I get that, and kudos.
My thought is that people, especially my age, will not be buying 2nd homes in the future. I think after seeing what my parents and myfriends parents go through maintaining their "vacation homes" I think that my generation will not be willing to put in the effort. I do not blame them. A vacation is supposed to be a vacation. Like you want a honey do list on your first, last, or any-day in the middle of your vacation. I see people just renting a furnish home for a week or month at a time or going to a nicer hotel. If you start to add up the number of days that you used the 2nd home and the expenses of the 2nd home, you will end up spending more on taxes, maintenance, and utilities, than you would have if you would have just rented something or stayed at a nice hotel. Now I know you sales people out there are going to say that I am forgetting the appreciation of the property in my equation. I understand that the home will appreciate, but the people buying a second home typically have more that one investment and their 2nd home is not their primary investment strategy.
I just think the stress and the feeling of "we have to go to the 2nd home" out weighs the appreciation aspect. I tell half my clients that they should not buy a second home, that they should either rent a luxury rental or stay at a great hotel when they want to come to the Valley. And then next year, when their son or daughter in Boston, has a baby and they do not make it to the Valley except for two or three weekends, they are truly vacations instead of "trips to check on the house". And if they want to go to San Diego next summer or the Oregon Coast, they do not feel like they are waisting money because they are not going to their home in Arizona.
Disclaimer 2 - I like to sell homes. It is my primary income. Please do not think that I try to talk people out of buying property. I will sell anyone a property, but l want to make sure that are buying a second home really are prepared mentally for what they are doing.
What do you think ActiveRain?