As I was driving through the mountains in Tahoe last week, I realized a new trend taking place. Although the housing market in the Tahoe area seems to have cooled off, there are still quite a bit of new constructions going on. I can't help but notice that the new houses are getting bigger and bigger (4,000 - 5,000 square feet, 3 or 4 car garages). Now, many people actually need that much space in a vacation home?
As a real estate professional, I undoubtedly love to flip through the real estate magazines everywhere I go. It was no different this time in Tahoe, and I noticed another interesting thing. I saw a lot of sales of fractional ownership of high-end luxury homes. The new trend started to emerge in front of my eyes. Statiscally, the average number of days that people use their vacation homes is about 28 days in a year. Housing prices in Tahoe have appreciated a lot during the last 5 years. A typical vacation home costs $500K - $1mil today. From a pure financial perspective, it's not necessarily the best way to utilize your money on something with such a low utilization rate. But with the fractional ownership (typical 1/6 or 1/7), you get to own and enjoy a piece of the luxury living at a fractional price. For the same amount of investment money, you can potentially own multiple vacation homes at different destinations. Now, that's the way to live!
No comments:
Post a Comment