By Candy Evans, Second Shelters
The vacation home market is estimated to be at $100 billion worldwide. In New Orleans at NAREE this month, I gathered five top vacation home experts, including Bill Furlong of HomeAway, Jackie Doak of Dart Realty (Cayman) Ltd., the developer of Camana Bay on Grand Cayman, Hunter Harman, Broker/Owner of Berkshire Hathaway HomeServices Beach Properties of Florida, Tina Necrason of Montage Hotels & Resorts, and Tyler Niess of Crescent Communities.
Learn from the experts on what is hot in the vacation home market, and see the whole panel discussion from the National Association of Real Estate Editors 50th conference, after the jump!
First we heard from Bill Furlong, Vice President of North American business for HomeAway, the vacation home rental listing portal based in Austin that travel behemoth Expedia recently bought for $4 billion. Morningstar analysts have estimated that HomeAway owns 40 percent of the online vacation rental bookings market, once known as “alternative accommodations”. (Their biggest competition right now is Airbnb.)
I also had Jackie Doak, Chief Operating Officer of Dart Realty, for whom she is developing luxury residential and commercial properties at Camana Bay on Grand Cayman, including the Kimpton’s almost-complete Seafire condos on famous Seven Mile Beach.
Telling us about the unstoppable growth of the Gulf Coast of Florida along 30A and on the so-called “Redneck Riviera” was Hunter Harman, Broker/Owner of Berkshire Hathaway HomeServices Beach Properties of Florida. His focus: St. Joe’s WaterSound Origins, where almost a fifth of the buyers are scooping up vacation homes as future primary residences.
Move over, Four Seasons: Tina Necrason, Vice President, Residential, Residential for Montage Hotels and Resorts, filled us in on the tremendous growth of Montage, one of the nation’s newest high luxury brands.
And Tyler Niess, Vice President and Chief Marketing Officer of Crescent Communities, the company developing Palmetto Bluff in South Carolina, talked about design trends (three kitchens!), the vacation home accommodating extended family, what the luxury developer needs to give today’s buyer.
A few notes:
HomeAway lists more than 1.2 million vacation rentals in 193 countries. The average owner listing on HomeAway books their property for 18 weeks and grosses more than $28,000 in rental income each year. More than half (59%) of HomeAway owners cover 75% or more of their vaca home mortgage renting to travelers.
Vacation home sales are robust but not as furious as they were in 2014. Still, 920,000 vacation homes were sold in the U.S. in 2015, the 4th highest number in NAR survey’s 13-years. In 2015, 16% of all home sales were vacation homes. In 2014, 21% of all were vacation homes, according to the National Association of Realtors.
The median price vacation home is now up to $210,000 in 2015, from $197,200 in 2014.
Thirty-seven percent of vacation home buyers plan to use their property for vacations or as a family retreat and 16 percent plan to convert their vacation home into their primary residence in the future, making them future retirement homes. 90% of vacation home buyers plan to rent their new property within 12 months of purchase. And vacation homes are seen as a great investment: the average HomeAway vacation owner’s property appreciated 79% in a 5-year period of ownership (from $325,235 to $583,087)
Top 10 HomeAway Vacation Rental Ownership Markets
- Kissimmee/Davenport, FL
- Florida Panhandle (Destin, Panama City Beach, South Walton)
- Orange Beach/Gulf Shores, AL
- Myrtle Beach, SC
- Breckenridge, CO
- Miami, FL
- Lake Tahoe, CA
- Steamboat Springs, CO
- Palm Springs, CA
- Gatlinburg, TN
A few fun takeaways: developers are really tripping over themselves to create the consummate luxury experience for the high roller buyer – an “authentic” luxury experience because the high end consumer is so terribly sophisticated. They’ve been around. We are light years beyond a Concierge: these folks will not just shop for you so the fridge is full when you arrive, they will entertain you and the kids, too.
In fact, developers are tripping over themselves to offer as much activity as they can for a total family/kid-centric experience. It’s all about the family and kids, a gathering spot away from the paparazzi in a protected, safe environment where kids can have natural freedoms. They can also have someone qualified to look after them, so mom and dad can enjoy the vacation, too. (In case you didn’t get the message, you no longer leave the children at home!) From Dart’s building of a whole children’s recreational center at Camana Bay to Montage’s Paintbox, an exclusive children’s’ program that offers young one’s a rich variety of experiences (while mom and dad get massages, for example) and is open when traveling parents need it most: Friday and Saturday from 6-10.
In fact, snazzy children’s activity centers are to be found at every development represented on this panel.
And HomeAway, too, is helping shape the expectations of an entire generation. With the market share HomeAway has snagged from hotels to private home rentals, Bill Furlong says the company is cementing a whole generation to a wide-spread acceptance and almost standard expectation that the family vacation will not be at a plain old hotel, but in a home where they have a kitchen, laundry room, pool access and plenty of privacy.