The natural beauty of our area attracts many different individuals and families looking for vacation properties where they can enjoy our region’s many recreational activities or hide away in a quiet place and retreat from the noise and distractions of a busy lifestyle.
Some prefer a cabin in the woods while others choose a home in one of our resort subdivisions where they can stay during the summer months, leaving it behind in the winter for warmer temperatures further south. Still others look for a weekend place they can use now with the intention of making it their permanent residence after retirement.
Whatever your reason, if you want a second home, central Virginia is a great place to find just what you are looking for; and depending on your needs, you can find everything from a condo to a single family home on a ski slope to a rustic cabin on several acres. And while your neighbors are most likely to come from places such as DC, Richmond or Tidewater, they may also come from as far away as Baltimore, New York or even Maine and Florida.
Like the rest of the real estate market, the one for vacation properties is picking up, and REALTORS® report improving sales, higher prices and in some instances a shortage of inventory. Nevertheless, it’s still a great time to buy your second home as interest rates continue at all time lows, and prices, while inching up, are still favorable compared to the hot market of a few years ago.
The Market for Second Homes
Nationally the market for vacation properties is booming, jumping almost 30 percent in 2013 compared to the previous year according to a survey conducted by the National Association of REALTORS®. In contrast, the market for investment properties fell last year, and that for owner occupied homes rose only 13.1 percent. As impressive as the growth in vacation home purchases was, total sales were one third less than they were in 2006, suggesting there is still room for appreciation making vacation homes a good investment.
Locally, vacation homes sales are also up compared to the slow market of the recession years. Amy Smith with RE/MAX Specialists works in Louisa and does business in Blue Ridge Shores, a private gated community built around Lake Louisa. “Many of the properties right on the lake are second homes, and the market for them is good when they are priced correctly,” she said.
The vacation market is going well, agreed James Dickerson with Charlottesville Solutions. He referenced Lake Anna and Blue Ridge Shores as well as Shenandoah Crossings, a 500 home subdivision of single family homes plus a year round resort located in Louisa County near Gordonsville, which Dickerson called the “best kept secret in central Virginia.”
In Massanutten, a popular resort area near Harrisonburg, last year’s residential sales were the best they’ve been since 2007, said Dave Cureton with Massanutten Realty, who reported a total of 49 residential sales. This year is also off to a good start with 11 sales and 11 homes under contract, year to date.
“There were some healthy signs in last year’s market,” said Brian Chase a REALTOR® with Wintergreen Resort Premier Properties. However, he explained that business suffered some from last year’s government shut down that affected lots of people in Northern Virginia, home to many vacation home buyers. While he feels that the Wintergreen market has picked up, it has not experienced the boom reflected in the nationwide sales.
Chase also said that the good news is that there are now “unprecedented opportunities” for buyers at Wintergreen. Resale prices are 10 to 20 percent less than the cost to build, and interest rates are still very low. “There is a good bit of equity available for the smart people who get into the market now,” Chase said.
Jeff Konstant, with Massanutten Realty, described the market of the last 1.5 to 2 years as “normal,” or about what it was in 2001 and 2002. “We’re seeing appreciation,” he said, “which is very normal.”
Vacation Home Buyers
Clearly these buyers are relatively affluent with enough disposable income to own at least two homes.
They range in age from 30 to 60, Dickerson said, and at least 50 percent of them pay for their vacation home with cash. Some are looking for a place to get away for the weekend, while for others their purchase is part of a long term strategy to provide a place for retirement. Many of these people have fond memories of summers spent here when they were young, while others went to UVA and enjoy having a place to stay in the fall when they come for the colorful leaves and UVA football.
Many second home buyers are what Konstant calls pre-retirees; people who have survived the housing crash and have been waiting for the economy to turn around again before making a purchase. “There is a lot of pent up desire for this kind of property,” he continued. They come primarily from northern Virginia and Baltimore, but increasingly also from Tidewater, he added.
While some of them may have intentions to live in their second homes full time after retirement, Konstant explained that many Massanutten properties that make desirable second homes are less inviting for retirees. For example, the vacation home buyer may appreciate a condo or a two story home high up on the mountain with great views, while the retiree may want the convenience of being lower down the mountain and all on one level.
The result is over time there is lots of turn over of properties. Cureton explained that at any given time in a Massanutten neighborhood there will be a mixture of full time residents, weekenders, and renters. The rentals may be occupied full time by tenants or they may be what he called a hybrid situation where the owners are there part time, leasing the property to vacationers when they can’t be there; a strategy that helps offset the cost of their second home.
Financing Your Second Home
Most second home buyers are financially stable and obtaining a mortgage is relatively easy. However, if you are in the market for a second home and you don’t plan to pay cash, talk to your agent about the best sources for these funds.
While Konstant agreed, “financing is easy,” he added that there are definitely some banks that make the process more difficult.
According to Chase as well, “financing is easy if you work with the right lenders,” in which case funds are readily available. Most second home buyers “have their financial house in order,” he said. However while his buyers have had a nearly 100 percent success rate working with lenders familiar with the second home market, sometimes this rate drops to as low as 50 percent, he said, for buyers who try to find their own source of funds.
What Brings the Buyers to Our Area
There are many reasons why vacation home buyers prefer our area. Most people want mountain views or to be near water, or both. Our area offers it all and buyers can choose from waterfront communities like Lake Anna, Lake Monticello or Shenandoah Crossings, to ski resorts like Wintergreen or Massanutten.
Recreational opportunities and activities are also important and the year round resort facilities associated with Wintergreen, Massanutten and Shenandoah Crossings attract home buyers who can live in the nearby subdivision and take advantage of all that these places have to offer.
The ski slopes at Massanutten and Wintergreen attract skiers and snow boarders in the wintertime. In the boom days, vacationers “bought condos before breakfast,” during the ski season, Chase said. Even with today’s slower market, though, fourth quarter sales are solid. However, people are out looking prior to the season. They want to be closed by the 15th of December, Chase said, so they can be ready to enjoy their favorite winter sports as soon as there is enough snow.
Wintergreen is more than a ski place, though, Chase explained. Spring and fall are very busy there with people enjoying the natural beauty as they come for reunions, meetings and big events like weddings. The natural beauty appeals to hikers and golfers, both of who appreciate the cooler temperatures during the summer months. Wintergreen is very much of a family place with lots of activities for children. It also attracts grandparents who enjoy entertaining their extended family in a central location with lots of amenities.
Often people who come for the skiing are pleasantly surprised at what Wintergreen has to offer during the rest of the year, Chase added, saying “it would be hard to duplicate what we have here in the way of year round activities and amenities.” One highlight of the summer months is the fireworks display on July 4th when people from all over the area join local residents to watch the show.
Massanutten is also busy in the summer. Konstant, who has lived there “off and on” since 1978 said it’s actually busier there in the summer than during the ski season. Kids are out of school then so it’s a much more popular time for family vacations. There are plenty of activities as well including golf, a health club and an indoor/outdoor water park. With the water park, which is open year round, people can “ski in the morning and enjoy a tropical water experience in the afternoon,” Cureton said.
The local wild life is also a part of the mountain experience. Cureton lives in a house on the ski slope half way up the mountain at Massanutten. During the season he enjoys sitting in front of his fireplace and watching the skiers fly by. However, he also sees wildlife including a mama bear and her cub that once stopped by for a visit. They took off when he yelled in surprise.
Often people come to our area first as tourists and then as vacation home buyers before they move here permanently. Shenandoah Crossings offers activities such as horseback riding, pools and playgrounds, however a lot of what brings people there is the history and the events such as wine festivals, Dickerson said. They enjoy these activities and then retreat to their “little cabin tucked away in the woods, their house on the water and their mountain views,” he continued.
Is A Second Home for You?
If you have been imagining the joys of owning a second home, now is a great time to buy with prices still reasonable and interest rates low. The hardest part will be choosing amongst the many possibilities available to you. Don’t let that stop you, however. One of our local agents can help you sort through the choices and find the perfect second home for you and your family.
Celeste Smucker is a writer, author and blogger. She lives near Charlottesville