A good portion of the real estate market in Manitowish Waters is in second (vacation and investment) homes. As a mater of fact, the second home market quite possibly exceeds the market for primary residences in units and dollar value in Manitowish Waters, Presque Isle, Boulder Junction, and a number of other northwoods communities. I wish that I could say that with some certainty, but I am not aware of any method to track whether a home purchase is for a primary residence or a vacation home other than to conduct some sort of survey of the buyers directly or perhaps to review all new deeds recorded for an indication of homestead property or maybe cross-reference the tax roll to the voter registration list -- all way too much work!
Speaking of second homes, the National Association of REALTORS has just published the results of a March 2009 national survey of second home buyers. Second homes come in two types -- the vacation home and the investment home. The investment home is purchased primarily to generate rental income and diversify investments, and this is not my focus here -- I am looking at the vacation home, defined as a home purchased primarily as a family vacation property.
Some results of the survey combined with NAR statistics:
Sales of vacation homes dropped 30.8% in 2008 from the previous year
By comparison, sales of primary residences dropped 13.2%
9% of 2008 home buyers identified their purchase as a vacation property
Typical buyer: 46 years old, married, with a household income of $97,200
Median purchase price: $150,000, down 23% from 2007
Median distance from primary residence: 316 miles
Top reasons given for buying:
For vacation or family retreats (89%)
To diversify investments (27%)
To provide rental income (27%)
As primary residence in the future (26%)
For use by a family member, relative, or friend (17%)
Where they are buying:
Small town (26%)
Resort area (23%)
Rural area (23%)
Suburb (20%)
Urban area (8%)
Some addititional statistics: Most people become interested in buying a second home in their 40s. There are currently 44.8 milliion people in the U.S. between the ages of 40 and 49, with another 40.7 million between the ages of 30 and 39. Taken together, this indicates that the fundamental demand for second homes will remain favorable well into the future.
Vacation home, investment home, or primary residence -- you decide --
