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Vacation homebuyers may be on a decline nationally (down from 16 percent to 12 percent according to the latest figures from the National Association of Realtors), but experts who work in this segment of the real estate industry are confident about the continued and growing appeal of their product — even during a possible downturn.
That was one big takeaway from a fascinating panel at the National Association of Real Estate Editors’ (NAREE) annual spring conference in Las Vegas, Nevada, last week.
Speakers included Ricardo Santa Cruz, founder of RSC, a real estate consulting, development and marketing firm in Mexico; Glen Phillips, CEO of Lake Homes Realty, a multi-state U.S. brokerage focused on its namesake properties; Joe Davis, real estate executive at the Promontory Club in Park City, Utah (and a journalist with KSL Salt Lake City); and Mike Parker, director of sales and marketing for The Big Sky Real Estate Co. in Big Sky, Montana.
“No matter how bad the economy gets, this high-end luxury segment is going to keep traveling,” Santa Cruz said, in response to a question from the moderator about how the business would weather a downturn.
“These are people who want to put their money somewhere safe,” Davis added. “Either they’re going to be buying because [the economy’s] great, or buying because they want somewhere to put their money away.”
However, the appeal of the vacation home segment in real estate isn’t just as a safe haven for extra cash from high-end buyers. The panelists also offered several notable tips for those looking to sell vacation homes, lake or beach homes and cottages and other types of second homes.
1. Contact buyers using time-tested methods
Buyers of second homes and vacation homes tend to prefer dealing with local experts and guides, over doing a bunch of online research on their own, according to some of the panelists.
“One thing we see is less of real estate providers like Zillow or other online providers,” in terms of where customers come from, according to Parker. “We’re seeing a lot more personal contact, a lot more on the phone than internet.”
2. Think multi-generationally
Nearly all the panelists agreed that buyers of second homes and vacation homes typically use them as gathering spots for several generations.
Whether they be boomers looking to get their adult children and grandchildren to come visit more often or to create a fun, relatively convenient meeting place for multiple adult children spread out across the country; or whether they be boomers or millennials newly inheriting wealth from older generations, the overarching point remained: look for properties and housing with enough space and flexible spaces that can accommodate a range of ages.
“Millennials [are] vacationing more with their families,” Santa Cruz said.
“If you’re joining Promontory, you’re bringing in your grandparents and your grandkids,” Davis noted.
“People are retiring in northern states … and they want to retire where it’s a little warmer, but not too far from grandkids,” Phillips observed.
“The thing that makes me confident and our company confident is the transfer of wealth that is taking place from generation to generation,” Parker added. “They don’t want to put it in the stock market or a bank, they want to put in a lakehouse to create those experiences [other panelists] talked about.”
3. Emphasize escapism, privacy and seclusion
Most of the panelists also noted that the buyers coming to their areas were looking to escape the demanding grind of daily working life, disconnect from technology and reconnect with family members in a private setting.
“What [buyers are] looking for is a place that when you get there, it feels very remote,” Santa Cruz said of the properties he works on.
“Our buyers are looking for the cabin in the woods,” Parker said, noting that Big Sky had 8,000 acres of forest that would remain undeveloped except for smaller half-acre plots looking out onto the woodland because it was a selling point.
“We have parts of our market with no cell signal and no internet,” Phillips said.
4. Develop creative partnerships and relevant marketing
Santa Cruz related how his firm works to sell residences that are branded and operated by nearby resorts and hotels.
Although owned by a single owner or family, the family chooses what times of year they plan to be there, and then the rest of the year the second home is rented out by a hotel or resort, which uses the rental income to pay for management, HOA fees, dues and other recurring costs of ownership.
“When they put it into the rental program, we can guarantee that they won’t play any HOA fees or dues,” Santa Cruz said.
Parker said that many of his firm’s buyers came by way of the nearby Yellowstone National Park, and that they specifically targeted Yellowstone vacationers with their product and marketing.
5. Use changing work habits to your advantage
Other than appealing to multi-generational families, several panelists pointed out that the changing nature of work in America is arguably making vacation homes and second homes more appealing and feasible destinations for buyers.
“Industrial types of jobs are kind of going by the wayside,” Davis noted, “You can take your job anywhere,” which lets people spend more time at a second home than in previous eras when they had to work out of a specific office or location.
Phillips pointed out that his company was able to expand and hire more agents in different states by not having brick-and-mortar offices. “We ran into some agents who said you can’t survive without an office,” he said, but, “now that’s a mechanism to recruit and train.”