Connecting our Clients to the Lifestyle of their Dreams – ALLURE OF THE SECOND HOME: WHY AFFLUENT BUYERS ARE DISPLAYING CONFIDENCE IN RESORT MARKETS

The potential market for luxury property has never been bigger.

In our most recent research report, The Allure of the Second Home: Why Affluent Buyers are Displaying Confidence in Resort Markets, we explore the current state of the second home market, as it relates to the affluent consumer, focusing on the top 10% and above income earners in 26 countries, who are in the market to buy or sell a second or vacation home in the next three years.

Who is Considering Buying and Selling?

Buyers, age 40 and younger, are taking over the luxury second home market, but lack the experience of Gen X and Boomers

Luxury second home buyers and sellers have similar demographic profiles in terms of age, geography, education and professional status. As a result, their financial profiles are similar, with the only noticeable difference being that sellers have slightly higher asset levels.

Interestingly, this group has notably high assets for their age. About half of the qualified consumer market is under the age of 40, yet their aspirations for purchase are in the millions of dollars.

For most, this is not their first time purchasing a second home—the average number of residences is over three and 14% own at least five residences currently. Driven not by the Millennial group, but rather by Gen X and Boomers. Of Gen X luxury second home buyers, 17% have more than five homes, along with 19% of Boomers in this buyer group.

Current State of the Resort and Second Home Market

Affluent consumers are in acquisition mode

Those who are in the market to purchase a luxury second home are adding to their portfolio and unlikely to sell their existing second home at the moment—thus there are more buyers than sellers. Interestingly too, this means that sellers are also buyers, but buyers are not necessarily sellers.

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Buyers show more confidence in the market than sellers. More than half of buyers believe that now is a good time to purchase a second home, while relatively few think it is a good time to sell. As noted previously, these consumers are quite savvy when it comes to homeownership; 76% own two or more properties currently.

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What are Second-Home Buyers Looking for?

Wellness is the New Luxury

Affluent consumers have begun living with wellness in mind and this also influences the second home market. In fact, 96% take at least one aspect of wellness seriously as part of their daily routine. Beyond physical and emotional wellness, which most affluent consumers focus on, luxury buyers are keen to improve their intellectual, social and even spiritual wellness.

Amenities that address these needs are sought by buyers and especially resort and second home buyers because of a growing demand for communities that take a holistic approach to overall wellness.

The Bottom Line

With more buyers than sellers, the demand for second homes is keeping home values high for luxury properties. Younger buyers are becoming more prominent, currently making up nearly half of the market, however, older generations have more experience buying second homes. Multiple residences, as well as customized experiences, including wellness amenities becoming a priority.

Would you like more information – just reach out and let’s chat:  214.769.2142

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Connecting our Clients to the Lifestyle of their Dreams…5 REASONS YOU SHOULD PURCHASE A LUXURY VACATION HOME IN 2019

If you could live anywhere in the world, where would it be? If you’re thinking about buying a luxury vacation home, now is the right time. According to real estate experts, 2019 is a great year to make the move, especially if you’re looking to purchase in a popular location like the Hampton’s or Hawaii. This year’s sales are already up in these luxury markets, which means if you’ve been on the fence, it may be time to start looking before prices go up. Despite an uncertain housing market, second home purchases remain strong. Here are the top 5 reasons to purchase a vacation home in 2019.

POTENTIAL FOR RENTAL INCOME

Vacation rental revenue for 2019 is already up to over 14 million dollars in the US, and it’s expected to show an annual growth rate of 6.4 percent, resulting in a market volume of more than 18.5 million by 2023. Although your primary reason for purchasing a vacation home is to enjoy your time off work in a relaxing location far from home, you’ll likely only be there during specific times of the year. So, why not turn your vacation home into a temporary rental property for periods when you are away?  In addition to gaining a second income from the rental property, you may even be able to deduct expenses for the property at tax time. Be sure to contact your tax professional for detailed information regarding your specific property and financial situation.

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ADDITIONAL TAX BREAKS

Speaking of potential tax benefits, any home you own provides a significant tax break. Especially if you use the property solely as a second home, your mortgage interest and property taxes may be tax-deductible. Again, be sure to seek advice from a tax professional before making any assumptions about your tax situation.

PROFIT OVER THE LONG TERM

Although all property fluctuates in value, vacation properties are more likely to appreciate due to their location in popular areas. Especially if your vacation home sits on land where it’s difficult to build, like on the side of a mountain or near a small piece of shoreline, it can increase in value as more people visit the area and want to move in.

IT’S CONVENIENT AND FAMILIAR

If you’ve ever planned a vacation to a place you’ve never been, you already know the challenges that come with the experience. Not only are you in the dark as far as how enjoyable the trip will be, but you have to trust online reviews and photos of hotels. Once you book your reservation, you can only hope that your vacation spot turns out to be the wonderful place you imagine. Alternatively, if you already have a vacation home, you never have to worry about the unknowns. You can have peace of mind in knowing exactly what to expect in advance. You hand-selected and purchased the property yourself, so you know you’ll love the area. Plus, after a few weekend getaways in your new place, you’ll grow to love the familiarity of coming home to your second home.

THE PERFECT PLACE FOR A CELEBRATION

Another fantastic benefit of purchasing a luxury vacation home is that you never have to search for the perfect venue for your cousin’s wedding reception or your grandmother’s birthday party. In your gorgeous vacation home, hosting memorable celebrations is easy and stress-free. Instead of wasting time searching for a venue and then worrying about whether it will work out to your specifications, you can spend your time focusing on celebrating the momentous occasion ahead.

Whether you’re looking to purchase your luxury vacation home in the US or abroad, the time to invest is now. Make your dream a reality in 2019 by beginning your search for the perfect luxury vacation home today.

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Looking for your next vacation home? Contact us directly at 214.769.2142