Chicago is a great place to live, on this we can all agree. However, it is always nice for residents to get away from time to time, which is why many Chicagoans look for second homes in a variety of different locations. In our cover story, we spoke with a multitude of experts to find out the common elements that make these locations across the nation attractive to area buyers. This way, you’ll have all the tools necessary to get your clients into the second home of their dreams. By Meghan Boyer
In the winter when the temperatures dive below freezing or during summer’s heat and humidity, many Chicagoans have a desire to escape. But to where are they fleeing? Second homes offer an attractive change of pace for Chicagoland residents tired of the status quo, and there are a number of areas in vogue with second-home buyers right now.
From Miami in the Southeast to Las Vegas in the West and locales such as St. Joseph, Mich.; Delavan Lake, Wis.; and Ridgeway, Colo., in between, buyers can find popular purchasing spots for second residences across the nation. And while each location is unique, they all share and exemplify some common elements that make great second-home areas.
Who is Buying and Why?
There are three primary reasons why buyers purchase second homes, says John Heritage, director of marketing at McKeough Land Company Inc. There are end users that purchase second properties with plans to retire there in five to 10 years, and there are investors who purchase in a community with plans for selling in the future, he says. Then there are those simply making a purchase because they are seeking different surroundings. Heritage has noticed purchasers of property at Brown Dog Ranch in Ridgeway, Colo., near Telluride, Colo., an area popular among Chicagoans for second-home purchases, share a common sense of escape.
Buyer demographics can vary based on the area, price and size of second residences. “We’ve seen baby boomers with young and even grown children, couples, many of whom are still working, and some that are retired,” says Melinda “Mindy” Brayman, a broker with Lake Lawn Resort Properties LLC on Delavan Lake in Wisconsin. Though second-home buyers can vary, the majority of purchasers are middle-aged baby boomers, says Dan Crist, a partner with Harbor Isle Holding in St. Joseph, Mich. Claudia Patricia Eusse, an exclusive agent for Landmark at Doral near Miami, agrees. The majority of vacation-home buyers are “between the ages of 40 and 65,” she says.
The typical vacation-home buyer in 2007 was 46 years old, earned a median household income of $99,200 and purchased property a median of 287 miles from their primary residences, according to the National Association of Realtors (NAR). Investment-home buyers had an average age of 42 years and earned an income of $92,900. They purchased homes an average of 27 miles from their primary residences.
Just as the location of the second homes varies, so does the property type, says Tony Dennis, executive vice president of CityCenter Residential in Las Vegas. “People look for all types of second homes” in all types of price ranges, he says. In 2007, the median price of a vacation home was $195,000, down 2.5 percent from $200,000 in 2006, states NAR. The average price of investment properties remained unchanged at $150,000 from 2006 to 2007.
For Realtors, the challenge is to match a buyer interested in a second home not only with the right area, but also with the right home within that area. A further challenge to making the right matches is a shifting market.
Nationally, second-home sales are down slightly, having dipped in 2007 along with the overall retail market, according to NAR. The total share of second homes reached 33 percent market share in 2007, down from 36 percent in 2006. The association believes conservatism toward discretionary purchases, such as second homes, and the disruption in the mortgage market account for the year-over-year decline. Despite the dip in sales, lifestyle factors and strong demographics remain positive for the vacation-home market, states the association.
Near, Far and In Between
Popular second-home locales are found throughout the nation, and Chicagoans aren’t looking solely to neighboring states for their second-home choices, according to industry observers. This means the right second home for a purchaser can fall anywhere on the map, and real estate agents need to be familiar with popular spots both near and far from Chicago.
Most vacation-home purchases in 2007 occurred in the South, at 41 percent, followed by the West at 24 percent, the Northeast at 19 percent and the Midwest at 16 percent, according to NAR. Similarly, buyers in 2007 purchased 38 percent of investment homes in the South, 23 percent in the Northeast, 21 percent in the West and 19 in the Midwest.
Proximity and accessibility are advantages to second-home locations, says Bob Gomolski, a partner with Crist in Harbor Isle Holdings. For Chicagoland residents seeking second residences close to the city, Delavan Lake in Southeast Wisconsin and St. Joseph, Mich., are two preferred locations within hours of downtown Chicago. The advantage is clear: After a few hours in a car or on a train, residents can arrive at their second homes for an extended stay or a weekend getaway.
On the other hand, some buyers prefer purchasing in locations outside the Midwest, such as Miami, Las Vegas and Telluride, Colo. While not within driving distance of Chicago, buyers purchasing homes in these areas can easily drive to other destinations located near their second homes. For instance, Las Vegas is a hub for many Southwest destinations, including California, Utah and Mexico, says Dennis. Second homes outside the Midwest also offer the largest differences in climate and scenery, note industry experts.
Change of Pace
Chicagoans can choose to purchase second homes anywhere, but the most popular locations offer a change of pace from daily Chicagoland life. Natural beauty, small-town communities or warm temperatures in January are some of the leading motivators for buyers when choosing a location for a second home, say industry observers.
The warm climates of Las Vegas and Miami are attractive to Chicago residents used to shivering each winter. The Miami area offers tropical weather all year, with visitors flocking to Miami-Dade County annually between November and April, according to Eusse. Similarly, Las Vegas receives numerous “snow birds,” cold-climate residents that migrate to warm areas like Las Vegas seasonally, says Dennis.
For some urban residents seeking second homes, city size is a determining factor, and they search for small-town communities that deliver a change of pace from hectic city life. This is one of the reasons St. Joseph is popular with Chicagoans, says Gomolski. The area “is a nice break from reality sometimes. It’s not an urban environment; it’s more relaxed,” he says. From the lack of traffic to the laid-back independent businesses in the area, St. Joseph gives second-home owners a chance to relax and experience “mental hygiene,” adds Gomolski.
Big or small, communities situated among natural beauty attract buyers, say Brayman and Heritage, whose developments in Wisconsin and Colorado, respectively, offer buyers scenic, natural beauty. Residents of Brown Dog Ranch soak up “vast mountain landscapes with towering pines, elk herds, panoramic views” and quaint mountain villages, says Heritage. The wide-open spaces make it easy for Chicagoans to forget city life, he adds. Delavan Lake, surrounded by forest and farmlands, is also known for its scenic beauty, says Brayman. “It’s a true antidote to the Chicago area,” she adds.
An abundance of available activities also contributes to making certain locations popular among second-home seekers. Las Vegas exemplifies this idea: Residents can see large-scale entertainment productions in the city, enjoy hiking and boating outside the city and travel to nearby locations, such as California, to find more experiences, says Dennis. Even smaller communities have lots to do. In St. Joseph, residents can visit local wineries, boat on the water or listen to the town’s symphony, says Crist.
If a client has a specific hobby, there may even be a second-home location that matches it. For instance, Doral, Fla., is a golfer’s paradise with five championship 18-hole golf courses, says Eusse. Whether it’s shopping, sports or entertainment, a second-home destination has to have a variety of options to succeed, state industry experts.
Do It for Me
The main focus of second-home buyers is to enjoy the scenery and activities available near their vacation residences. Ultimately, second homes are vehicles for relaxation and pleasure and not for worrying about home maintenance and chores. “People don’t want to cut the grass with a second home; they just want to enjoy it,” says Gomolski. Buyers’ desire for do-it-for-me residences has fueled the increase of services available at second-home properties.
“Part of what CityCenter offers is that people want things done for them,” says Dennis. They “don’t even want to think about thinking about it.” In other words, second-home owners even don’t want to hire and manage someone to take care of their affairs; they want their needs anticipated and accomplished automatically, and many residents are willing to pay a premium for quality services, he says. At CityCenter, staff members maintain owners’ units when they are not occupying them, from watering the plants to filling the fridge with food before the owners arrive. Provided service is about “anticipating the needs of customers and knowing how to provide them with a butlered lifestyle,” he adds.
Similarly, Lake Lawn Resort Properties on Delavan Lake features maintenance-free second homes and resort services for owners, says Brayman. There are a variety of homes available in the Delavan and Lake Geneva area, and second homes with services available for residents stand out from the pack, she says.
Welcome One and All
No matter how beautiful, calming or fun-filled the area, if the year-round residents don’t accept second-home owners as part of the community, it won’t be popular with second-home buyers, industry observers report. “A lot of times with smaller towns, there’s animosity between the year-rounders and the second-homers,” says Crist, who adds this is not the case in St. Joseph.
Areas that are used to an ebb and flow of people are more accepting of second-home owners. For example, second-home owners do not stick out in Las Vegas, which has a “predisposition to openness and to people coming and going,” says Dennis. Likewise, resort communities are very accepting of transient residents, says Eusse. “Doral is a big second-home city for many families that have businesses in other states or countries,” she says.
Overall, Chicagoans’ tastes in second-home locations vary, with Florida, Michigan, Wisconsin, Colorado and Nevada standing out as popular destinations for buyers. But while each location is different, buyers are attracted to the common themes found in each: do-it-for-me amenities, varied activities, unique scenery and welcoming residents. C.A.
Delvan Resort Holding
Harbor Isle Holdings
Executive Vice President
CityCenter Residential Division
Landmark at Doral
Harbor Isle Holdings
Director of Marketing
Mckeough Land Company