Baby boomers at head of the line for second homes

Leave it to baby boomers to drive lifestyle trends. Having left behind free love in the 1960s and plastic surgery in the 1990s, aging, nesting boomers are now fueling interest, and sales, in second homes.

Having a vacation retreat is the main motivation for adding a second home, followed by planning for retirement and diversifying investments, according to a new survey of second-home owners conducted by the National Assn. of Realtors and EscapeHomes.com, which specializes in resort property and second homes.

“In short, this market is driven by middle-class baby boomers” motivated by lifestyle and investment considerations, said David Lereah, the association’s chief economist. The oldest boomers are now 56.

The survey of existing owners, conducted this fall, showed the typical second-home owner is 61, has owned the property for nine years, earns a household income of $76,900, is married and purchased the property for recreational use.

A separate association survey last year that focused only on second home-buyers showed the median age was 46 in 2001.

Sales of second homes have been increasing, rising to 359,000 units in 2001 from 264,000 units a decade earlier. “Approximately 6% of all home sales each year are second homes,” Lereah said.

Only 56% of second-home buyers used mortgage financing. For other sources of funds, 49% used savings, 10% tapped into equity from a primary home or from a refinanced property, 9% sold stocks or bonds, 7% used inheritance, 5% used gifts from relatives or friends and 2% used funds from the sale of personal property.