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Vacation Homes Whet the Appetite of Affluent Households, Study Finds

Among more affluent buyers the market for second homes is heating up, according to results of a survey released last month by Centex Destination Properties, the second home and resort arm of Centex Homes.

Conservatively, one in four of those who completed the Internet poll last October indicated some interest in purchasing a vacation home over the next two to three years. Almost all of the households who were surveyed had incomes of at least $125,000 and their median income was $156,000.

Respondents were at a median age of 45; about 30% were under the age of 40; 78% were married and 87% were home owners.

According to projections from Claritas, the number of households with $125,000 incomes will increase from 7.5 million in 2000 to 10.3 million in 2005 to 14.6 million by 2009. Identifying how many in that income group will range in age from 35-65, the research company expects the primary market for potential second-home buyers to double from 5.8 million in 2000 to 11.4 million in 2009.

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A survey by the U.S. Bureau of the Census shows that seasonal and occasional housing as a percentage of all housing units has been ticking up, from 4% in 1987 to 4.7% in 2003.

Among the survey findings:

• Respondents were willing to pay an average $350,000 for a single-family house and $300,000 for a condominium or town home. What they were willing to pay varied widely by destination, ranging from $640,000 in Long Island, NY, and $545,000 in Maui, HI, to $185,000 for the Tennessee Lakes area and $205,000 in the Poconos. Roughly 70% said they would consider financing their purchase with a mortgage.
• Fifty-one percent said they preferred a detached home, 25% attached, 14% a site on which to build a custom home and 10% fractional ownership.
• About two-thirds were looking for investment potential and almost as many wanted a location that is convenient to a grocery store and with low real estate taxes. Low upkeep and maintenance was a desirable attribute for more than 70% of those polled.
• Top amenities were walking trails and an outdoor pool. Golf, tennis and skiing were identified as lower priorities.
• Fifty-seven percent of those polled said they were looking for a second home as a place to get away from business pressures.
• About half said that two to four hours was the preferable travel time and 53% would prefer to drive.
• More than 45% said they found a temperate climate year round desirable; more than a third like a place where the seasons change. Almost 15% wanted a place where the winters are warm and about 11% want snow so they can engage in winter sports.

Destinations varied by region, but the top 10 spots for a vacation home were:

• Naples, Marco Island, FL (3.1%)
• Southern New Jersey and Delaware coast (2.9%)
• Florida Keys (2.8%)
• Southern South Carolina coast, Hilton Head and Charleston (2.8%)
• Maui, HI (2.6%)
• Northern North Carolina coast and the Outer Banks (2.6%)
• San Diego and Oceanside, CA (2.5%)
• Northern Sierras and Lake Tahoe (2.3%)
• Capes and outer islands in Massachusetts (2.2%)
• Daytona-Palm Beach FL (1.8%)

“The Second Home/Vacation Property National Study” was conducted by American LIVES, Inc.
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