Affordable Housing Institute : US

Because housing demand is elastic, as incomes rise, the affordable housing consumption also rises, leading not just to evolving modern bigger homes (McMansion or otherwise), but also to multi-home families.  Some temporarily separate for work; others seek out their own private weekend home, as ingenuously reported by the New York Times, delightedly discovering towns beyond Manhattan with the astonished look-what-I-found pride of a morning-after newlywed:

 

The southern end of Whidbey Island, with its laid-back ambience and hypnotic water views 58 minutes from downtown Seattle (including ferry ride), seems almost too good to be true — and you won’t even run through a tank of gas getting there.

 

Homes on Whidbey Island, Wash., in Puget Sound are popular with Seattle residents.

 

Likewise, Lake Lanier, a speedy 40 minutes [As opposed to an agonizingly slow 40 minutes? — Ed.] northeast of Atlanta, is full of house hunters trying to put their deposits down.

 

Marblehead, Mass., a short hop [Only for birds, not for drivers! — Ed.] northeast of Boston, features the charming cheek-by-jowl antique houses seen on Nantucket — without the Cape Cod traffic.

 

 

This house, on the market in Marblehead, Mass., is just 16 miles from Boston but seems a century away in time. The town, long a yachting destination, is attracting vacation-home owners who stay on land.

 

Adding multi-housing buyers to markets increased demand, which can substantially and permanently change market dynamics:

 

Sales of weekend and vacation homes (as well as investment and retirement homes) in resort areas close to major cities are booming, real estate specialists say. San Franciscans increasingly seek respite in the Napa Valley. Houstonians find places in Galveston. Homeowners in Minneapolis are combing the banks of Lake Minnetonka for properties.

 

How many homes should one have?  After all, no hotel room is ever quite home, in the sense of being personal, private, and appointed with one’s own things, in the places one expects; hence, since the earliest cities, affluent dwellers have coveted and maintained a pied-a-terre, a small ‘other’ place for the weekday, weekend, or summer as the case may be.  For an individual, the pied-a-terre is the most discretionary of purchases, but for a community, volumes of pieds-a-terre can significantly alter marketplaces, as discussed in the inset box.

 

 

Back in America, for those who can afford it, two homes are a pleasure:

 

Among the reasons cited are the relative ease of travel, the ability to visit more frequently and, especially these days, the rising cost of gasoline.

 

Further, with the metropolis’s economic radius expanding, and the increased information quality of telecommuting allowing more people to work one day at home, the getaway need not be far away, just on the other end of a nasty commute:

 

In fact, “more than one-third of recent second-home purchases are within 25 miles,” Mr. Molony added. “We’re hearing about more and more people who keep a condo in the city and spend their quality time — whether or not they call it vacation, weekend or dual — at their second houses.”

 

If sustained in any numbers, this trend to multiple homes could have a huge impact on markets and communities. 

 

Walter Molony, a spokesman for the National Association of Realtors, said that second-home purchases less than 100 miles from a primary home have risen significantly in just three years, to 47% of all second-home purchases in 2005, up from 33% in 2002.

 

Buyers of such second homes may overpay, but they are very unlikely to default if they have.  They’re not investors, they’re collectors — collectors of homes. 

 

It’s not just that the new buyers raise prices, they may permanently disequilibrate markets when price differentials are huge because most buyers must live close to work. 

 

On April Fool’s Day, The South Whidbey Record published a spoof issue, with an article heralding the sale of all of Langley, Whidbey Island’s most visited town, to Disney for $32 million. Some of the many vacation-home buyers roaming the town — with its Main Street of movie-set-ready shops in pastel colors — probably believed it.

 

In the UK, so defunct is the indigenous economy of some Welsh villages that homes there, which sell for one-tenth the per-square-foot prices of London, are now almost entirely owned by Londoners looking for weekend touchdowns.  Entire regions become extended-bedroom communities, with resulting hypertrophy of some uses and atrophy of others.

 

That’s one downside of the boom.  Here’s another: loss of affordability.  Upward pressure from urban buyers raises the value of all property, meaning rising land values, whereupon heretofore best-use affordable housing is no longer best use. 

 

Whidbey and Seattle: feel the appreciation pressure?

 

The mobile homes are at risk:

 

One [Whidbey] lot sold last August for $150,000 in the crowded Cultus Bay section, with views of the Olympic Mountains and the bay. The woman who bought it is spending about $300,000 to build a 1,400-square-foot house on the property, Ms. Swope said. If the woman were to sell the house now, Ms. Swope said, it would bring about $550,000 — a potential profit of $100,000 in less than a year.

 

Enter the brokers.

 

According to Mr. Bitts, her friend and competitor, there used to be about 125 real estate agents on the island. In the last few years, he said, that number has risen to 180.

 

Ms. Swope said that when her friends from the Texas suburbs visited recently, “they were amazed to see there were still trailers here.”

 

What, you’re still here?

 

Like Atlantic Highlands, New Jersey, whose mobile-home zoning tussle I’ve previously profiled.

 

“But I told them not to worry,” she said. “They’ll be gone soon.”

 

She paused. “For better or worse.”

 

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