Second Home and Resort Real Estate Trends
Second Homes and Resort Real Estate Trends
If you are considering buying a second home in Lake Tahoe, you may have many questions. I am a seasoned Lake Tahoe Realtor and can guide you in understanding the local ordinances and restrictions that come with buying a home in Lake Tahoe or Truckee.
Below I have gathered the most current statistics on the trends in the second home market according to the National Association of Realtors.
Where People Purchase Second Homes
According to NAR statistics for 2018, 33% of vacation buyers purchased homes in a resort area, 21% purchased lakefront property and 39% paid in all cash. In 2013, the National Association of Realtors said that vacation homes accounted for 13% of all homes sold. By 2018, this figure has risen to 19%.
While buyers of primary residences typically purchase homes because of the desire to be a home owner, a change in their family situation, or due to a job change, buyers of vacation and investment homes are motivated by other factors.
Why People Purchase a Vacation Property
The market trends for home prices at Lake Tahoe has shown a steady increase. Many people invest in properties at Tahoe properties as a safe haven or alternative to the stock market.
Roughly 11% of primary home occupiers also have a second home. 49% percent of vacation home buyers plan to use their property for vacations or as a family retreat, 18 percent plan to convert their vacation home into their primary residence in the future for retirement, and 12 percent because of low real estate prices and the buyer found a good buy.
45% purchased a vacation home with the intention of renting it out, and 71% of those who purchased a vacation home felt that now is an excellent time to buy.
QUESTIONS TO ASK BEFORE BUYING A VACATION PROPERTY
1) Why do you want to buy a vacation property?
If you love diversity in traveling around the world, a second home may not be for you. However, if you like the sense of retreat that is offered by a 3 hour drive from the hustle and bustle of the city, and enjoy living in a home with your own belongings, having a second home in Lake Tahoe would be ideal. The costs of ownership can be offset by renting the property out when you are not using it.
2) Do you work while on vacation?
In 2006, having internet at Lake Tahoe was challenging. Today, because of expanded infrastructure and mobile devices, people can work virtually anywhere and even on a ski lift! Many people are spending longer periods in their Lake Tahoe retreat, and some are even moving here full time and working remotely. You will find that working while enjoying a retreat into the mountains of Lake Tahoe will be effortless.
3) Do you want to rent your vacation property?
Rental income is a great way to offset the ongoing cost of owning a vacation property during the majority of the time that you will probably not use your home. There are many property managers around Lake Tahoe who can help manage the rental of your property. Websites like AirB&B and VRBO also allow you to manage the rental process yourself for a minimal fee. There is a balanced mix between full time resident 'locals' at Lake Tahoe and those who only come for a fixed period throughout the year. Renting your vacation property will not be a problem.
5) Do you plan to own your vacation home as a legacy property?
Many people purchase their second home with the intention of entertaining their adult children and grandchildren. Perhaps they want to keep the home in the family for generations to come. According to NAR, the average vacation property owner only plans to own his/her home for seven or eight years. With the normal trends of rising home prices, affordability and corrections that happen in any supply and demand situation and its effect on market condition, it might be wise to consider owning your home for a minimum of 10 years.
It is rare to find a property priced in a way that you could flip it for a profit over a short period of time, but it is possible. I am knowledgeable in the distressed market and work with investors who like fixing up properties. When buying your vacation home in Truckee or Lake Tahoe, it is wise to consider your goals prior to purchase.
6) Will buying this vacation home make your life better?
Over the last decade, Lake Tahoe has seen an influx of 5 star dining, organic markets, unique boutiques and all sorts of wellness and yoga studios that might not have been available in prior years. Obviously the natural environment in the Sierras offer a plethora of outdoor activities ranging from boating, paddle boarding, skiing, hiking and golfing. Many homes come with access to HOAs that offer amenities such as beaches, piers and buoys. While maintaining a second residence comes with more work than not having one, the joys of retreating to your mountain home will far outweigh any of the upkeep.
Contact me today so we can discuss your goals and find the ideal property that will fit your needs. I look forward to showing you around!