So here we are, a sobered nation supposedly coming to terms with a new era of pared-down, fewer-frills, stick-to-the-hearthside living.
OK, but if that’s true, then how likely is it that vast numbers of us nonetheless will plunk down our money on something as conspicuously consumptive as a second home?
Pretty darned likely, according to some who study our buying habits and our inner yearnings. They say that, current economics aside, in the next decade America will encounter some powerful societal forces that should push the second-home ownership numbers sky-high.
How high? Americans will buy 3.6 million second homes — about 1,000 a day — over the next decade, bringing the number of individual owners of such properties to more than 10 million, according to demographer Peter Francese. The founder of American Demographics, a noted predictor of consumer behavior and interests, Francese says that age, affluence and technology will converge to make record numbers of us pine for that proverbial cottage on the lake.
Or maybe we’ll crave a condo in the sky, instead, because the way we define “second home” is changing, according to Francese and others who see the market evolving to encompass some non-traditional addresses.
Aside from the sheer growth in numbers, the second-home market may evolve in a number of ways, according to the prognosticators:
In the aftermath of the Sept. 11 terrorist attacks in New York and Washington, many more of us will seek “escape,” if only figuratively. And the closer to us such escapes are, physically, the better, because we’re suddenly less inclined to spend a lot of time traveling to reach them.
The rickety — make that “rustic” — cottage on the lake will still have its admirers, but our house-centric society increasingly insists that our getaway homes be as comfy and well-turned-out as our main residences.
America’s cities may have made a roaring economic and residential comeback, but the price is a weariness with the 24/7 neighborhood, which will spark a yearning for weekend simplicity.
And, down the road, look for the emergence of a group of consumers who own not two, but three homes.
Leading the charge will be the usual suspects, the Baby Boomers now eyeing retirement, according to the experts.
“It’s a combination of the aging population and their income,” according to Francese. “If you go back 20 or 30 years, when people tipped over the line into the 55-and-older age group, they inevitably got poorer. They had less money to spend” as they left the job market to live on a relatively fixed income. “The person who turns 55 today is far more likely to have greater assets,” not to mention the benefit of tax laws that no longer extract capital gains on the sale of the old homestead.
“The Boomers are about to reach their prime vacation- and second-home buying years and are poised to revolutionize the market,” agrees Clark Thompson, a California real estate broker who is also CEO of escapehomes.com, an online directory of such properties.
Thompson says that although conventional wisdom might have interest in second-home ownership abruptly ceasing as one of the myriad side effects of Sept. 11, the opposite seems to be true.
“People have changed their priorities of how they’re going to live,” Thompson says, explaining that people who had been merely thinking about that getaway home now seem to be motivated to act on their dreams.
“[Before Sept. 11], I had some pretty cogent demographic reasons why the second-home market was going to explode,” Francese agrees. “But what I found is that after Sept. 11 there is now a psychographic component.”
“People are going to make that final decision to buy second homes because they want some place to flee to,” Francese says. “They’re going to justify it by saying, `We’ll spend holidays and weekends there’ — and they will. But underlying all of that will be this tremendous psychological push — that if there’s ever another attack or a bit of danger, they’ll be safe because they’ll be able to run to the hills.
“It’s completely irrational, of course. Who had time to flee anywhere on Sept. 11? But many products are sold on the basis of illusion, and it will push this [second-home] phenomenon to greater heights.”
Karen Larkin-Johnson takes a slightly less intense view of her clients’ motivations, but the real estate agent in New Buffalo, Mich., agrees that the market is fueled by more than economic factors. She sees a growing fascination with small-town life.
“I used to go into Chicago because I needed a `city fix,’ some stimulation, some culture. Now, I see people starting to reverse the process. They need a country fix.”
Johnson’s realty business is in the heart of “Harbor Country,” the cluster of towns in Indiana and Michigan that long have drawn summering Chicagoans. In the recent boom years, these slumbering beach burgs have been transformed into the Hamptons of the Midwest.
She insists that the region’s “summer people” — and the resultant image of over-the-top lakefront houses — aren’t the only drivers of the local real estate economy. She sees increasing numbers of ordinary working people seeking a respite from urban life.
Earlier this year, for example, Annie and Joel Wasserman walked into her office and asked what they might be able to buy for $50,000 in the area. Joel, who is a painting contractor, says they didn’t expect a beach house, just a getaway where their two dogs could get some exercise, and it had to be a fairly easy drive from their condo in Chicago’s Bucktown neighborhood.
What they found at that price was a cottage in the town of Three Oaks, Mich., several miles from the lake. After spending $30,000 for renovations, they’re now there almost every weekend, they say.
“It looks like something out of the Pottery Barn catalog,” jokes Joel, who says the couple did much of the work themselves.
The Wassermans based their home search on “driveable” distances, and that’s fairly typical, Francese says. “It’s hard to find specific data, but what I’ve seen is that the vast majority [of second-home purchases these days] are usually within half a day’s drive.”
Which might mean that the Colorado ski condo, approached via jetliner, has lost some appeal, post-Sept. 11.
“Initially [after the attacks], people backed off and said we’re not going to buy [a second home at all]. But then they said, `I don’t want to fly to Aspen. Geneva is just drive time,’ ” according to Chris DeVincentis, a Re/Max agent in Lake Geneva, Wis., where the clientele at this legendarily moneyed lake is, indeed, known to fly off to Aspen for vacations.
“Years ago, it was distance; now it’s time,” says Patty Zirla, a Re/Max agent in far north suburban Antioch who has been selling properties in the nearby Chain ‘o’ Lakes region for about 15 years. She says the clientele, and what they’re looking for, is evolving.
“In addition to the really affluent people we have always had around here, I’m having more blue-collar workers, two-income couples [looking for second homes].” And, she says that buyers of all economic stripes are seeking more than a weekend place. Many are thinking about moving in full-time when they retire.
“So they’re demanding more amenities. They want more bedrooms. The 2001 purchaser is requesting a larger piece of property with the hopes of adding on to it. They might start with a $150,000 home, nothing elaborate, and plan to make it into a $300,000 home.”
If that’s still within the realm of the traditional second home, Francese and others in real estate see the emergence of a category that’s nowhere near “rustic”: the urban condominium.
Habitat Co. real estate agent Robert John Anderson says that some of his downtown clients have been Chicago suburbanites who wanted Gold Coast getaways.
“They want the Chicago experience,” he says. “And they want convenience,” which they tend to seek in newly constructed high-rises because they want play and no work while they’re there.
And he says that although many such clients are empty-nesters, not all are. For example, he has sold a series of three condominiums — each one larger than the last — to a couple from a distant suburb who come into the city each weekend with their three young children. Anderson says their weekends are filled with museums and theater and “just kid stuff.”
Francese says this is part of a broadening notion about where we could live part-time, one that’s fueled by our increasing ability to telecommute from just about any location and by the recent boom in downtown residential development. And, he says, that may inevitably lead to a wave of “third home” ownership.
It may be here already. Northwest suburban podiatrist John Fischer and his wife, Kathy, could be the embodiment of a number of second-home trends. Four years ago, the Boomer-aged couple bought a three-bedroom house in the Chain ‘o’ Lakes area, with an eye toward retiring there.
The house is fairly new, so maintenance isn’t a big issue, he says. And it had to be close. His drive to the house, which is near the town of Fox Lake, clocks in at 52 minutes. They’re at the lake house often. “It’s another world up there,” he says, with genuine fondness.
He says it’s another world, too, in the Cayman Islands, where the Fischers also own a condo that they’re able to visit two or three times a year and rent out at other times. He said they keep clothes and personal belongings in both getaway homes, and he sees their lifestyles at both as relatively simple.
“Right now, that’s a minuscule part of the population,” Francese says of three-home owners. “It’s not such an outrageous assumption. If you’ve got the suburban house and you’ve got the [downtown] pied-a-terre, you might as well have the country place, too.
“Think about it. Eighteen percent of the population nowadays own three cars. Who would have ever thought a few years ago that would happen?”
