Energy, lifestyle and second homes

[emi guy]

Gasoline has now comfortably exclipsed $3.00 (U.S.) per gallon where I live and Heating oil too has increased to levels that I have never seen. With increases in energy obviously on the move and all of the trickle-down effects that increases in energy create, what do you expect will happen to the desireability/investment potential of second homes?

After a discussion with my DW about the impact of high energy prices, she exclaimed "there will always be those that can aford to own second homes and thus they will always be a good investment and saleable".

I, on the other hand being more paranoid, can envision a time in the not too distant future where second homes may become less desireable to hold due to the expenses related to keeping them given the cost of energy. Is it possible that energy costs could quickly spiral up making ownership less desireable?

Have any of you thought much about potential paradigm shifts that we are likely to see in the not too distant furture should energy continue its parabolic rise?

Of course, those LBYM are already ahead of that game.

 

[W2R]

Gasoline has now comfortably exclipsed $3.00 (U.S.) per gallon where I live and Heating oil too has increased to levels that I have never seen. With increases in energy obviously on the move and all of the trickle-down effects that increases in energy create, what do you expect will happen to the desireability/investment potential of second homes?

After a discussion with my DW about the impact of high energy prices, she exclaimed "there will always be those that can aford to own second homes and thus they will always be a good investment and saleable".

I, on the other hand being more paranoid, can envision a time in the not too distant future where second homes may become less desireable to hold due to the expenses related to keeping them given the cost of energy. Is it possible that energy costs could quickly spiral up making ownership less desireable?

Have any of you thought much about potential paradigm shifts that we are likely to see in the not too distant furture should energy continue its parabolic rise?

Of course, those LBYM are already ahead of that game.

I agree with your DW - - there will always be plenty of Donald Trumps in the world, though the percentage of middle class homeowners that can afford two homes may decline.

Personally, I would no sooner buy two homes than fly, due to the worry and expense of maintaining a home far away. I suppose a second home that was a condo might be do-able, but not a single family home.

As far as energy costs affecting my future plans - - I'm moving north to Missouri in two years. I plan to buy a house with a fireplace, get plenty of warm clothing and blankets, and hope for the best. Even though I could afford to buy my home up there now, when prices are low, I do not plan to do so because of the previously mentioned worry and expense of owning a home in one state and living in another.

 

[CybrMike]

I prefer my second home to be able to be purchased as someone's first home.

In other words, it is in a place that I feel that retiring baby boomers will be headed in the next 10 years to retire full time, the upper middle class ones anyways. Abandoning their first home and moving into this one as a primary residence.

 

[TargaDave]

Maybe a bigger effect will be the desirability of mega-homes versus second homes. These mini mansions have high energy bills, high maintenence costs and high real estate taxes. Lot of recent shoddy workmanship to boot. There also seems to be a mood of downsizing with this down RE market.

Second homes in the most desirable locations (prime waterfront, prime ski areas, etc) will always have appeal despite their own cycles and precarious locations.

 

[tryan]

My guess is we'll have a glut of 5 bedroom McMansions before we have a glut of 3 bedroom second homes. Everybody has to live somewhere. Not all can afford to maintain a McMansion.

 

[Ronstar]

My second home is a small AZ condo - its questionable whether it would make financial sense to keep it in full ER if I have to cut expenses. Its been a good investment, but the yearly maintenance and HOA fees continue to rise. I would rather have one small and one medium place than have a McMansion.

 

[ladelfina]

I agree with the McMansion-as-white-elephant opinions. I'm not sure what real extra energy-specific costs are incurred in having a second home (outside of [-]hogging[/-] paying for the extra materials that went into it in the first place.. in that sense there's an extra 'footprint' to be sure).

What if you worked so that you had two small homes (like 1200-1800 s.f.) instead of one big one (2400-3600 s.f or more), and the summer home was in a cooler place and the winter home in a warmer place? Then you could save on heating and cooling, minus transportation 2x a year in a retirement scenario.

If you are talking a weekend ski chalet in the winter, or a Miami beach condo or desert villa in the summer, then yeah, energy might be an issue.

It will also depend on whether the vacation home in consideration could also realistically be a year-round residence for someone, which would enlarge the pool of potential buyers (I would love a 'vacation home' in NYC!). And Targa Dave is right about the prime locations.. they aren't making any more beachfront except in Dubai.

 

[cashflo2u2]

I had a second home on a lake here in NH. Found it a wonderful to have but a pain to maintain two places. When the kids got high school age they wanted to be in town with their buds. We decided to sell it and made a real nice gain. (would have been a LOT more if I held it). BUT, now everybody is sorry cause the grandkids would have loved it.

Anyway there is alway some nice plum assets moving from weak hands to strong hands in time of stress. Second home probably no different.