Cover story: Sales get sunny for vacation homes

Worries about a slumping economy might suggest that buying or renting a vacation home is the last thing on the minds of most consumers, yet 2009 was a good year for vacation home sales, according the National Association of Realtors. Perhaps recession fears led more families to invest in places where they could escape the news and relax a little.

The National Association of Realtors 2010 Investment and Vacation Home Buyers Survey reports vacation-home sales rose by 7.9 percent in 2009, while primary residence sales rose by 7.1 percent. Statistics show vacation-home prices rose by 13 percent in 2009 after three years of declines.

The Realtors association’s chief economist, Lawrence Yun, commented on the survey, saying, “The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat.”

Just one in four vacation-home buyers plan to rent their properties to others, while 26 percent intend to use the property as a primary residence in the future.

Resort areas at beaches, lakes and mountains in Virginia, West Virginia, Maryland and Delaware attract Washington-area residents, many of whom eventually opt to a buy a vacation home for their personal use. Now that the vacation-home market seems to be improving, some of them are opting to sell these homes or actively market them for short-term rentals.

Christine Karpinski, director of the Owner Community for HomeAway Inc. and author of “How to Rent Vacation Properties by Owner,” recommends that vacation-home owners, whether they have rented their homes or not, provide an estimate of rental income potential to prospective buyers.

“Every vacation-home owner should talk to a local property management company if they have not rented out their home in order to find out the possibility for rental income,” Ms. Karpinski says. “That information should be included in the marketing materials for the home. Not only will the pool of people who can afford to buy the home be larger, but the possibility of earning rental income will factor into the comfort level of every potential buyer. Even if someone has no intention of renting their home, they will view rental income as a safety net.”

Ms. Karpinski suggests that vacation-home owners offer to rent their property to prospective buyers at the standard price for a week, but with the written promise of a rebate of the full rent at settlement if the renters choose to buy the home.

In many ways, marketing a vacation home is similar to selling a primary residence: Location, price and condition are the main factors that influence how quickly a home sells and whether it sells close to the asking price.

“The proximity of a home to the ocean, whether it is oceanfront or within walking distance of the beach, influences how popular it will be for short-term rentals and for sales,” says Marie Cahill, a broker at Connor Jacobsen Realty in Bethany Beach, Del. “For sales, though, oceanfront property is typically priced at over $1,000,000, so that may actually slow down sales a little.”

Ms. Cahill recommends that vacation-home sellers have appraisals before putting their properties on the market. This will provide a professional opinion of the appropriate sales price. She also recommends that sellers pay for home inspections so they will be able to anticipate requests from potential buyers for repairs. Ms. Cahill says all sellers should have their homes staged to make them more appealing to buyers.

While those are recommendations she makes for both primary and second-home sellers, she says, vacation homes need to be marketed according to the season.

“If you are selling a vacation home, it will typically be bought by someone who lives within a two- or three-hour drive,” Ms. Cahill says. “You need to figure out how to reach those buyers. In our area, we have buyers from the District of Columbia, Northern Virginia, Maryland, Philadelphia and even New York and New Jersey.”

Ms. Cahill says in-season, which for Bethany Beach is the summer, vacation-home owners can market where the home is located.

“Vacationers typically pick up the local paper and will look at homes on a rainy day or just on a whim,” Ms. Cahill says. “If you want to sell your home, you need to think like a vacationer.”

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