By Kevin Hogencamp, Contributing Writer
As a real estate firm CEO, Linda Sherrer faithfully tracks industry trends and makes a determined effort to stay informed about the market.
Doing so, she said, is an essential aspect of her livelihood.
Besides, the Berkshire Hathaway HomeServices Florida Network Realty founder is often called upon as an expert to provide industry insight at conferences and seminars.
“You’re always searching to find out the latest data and see how that plays in the way you’re living at the moment,” Sherrer said.
That’s why Sherrer was surprised many years ago to accidentally discover the likely reason she wasn’t enjoying owning her second home in Colorado: It was too far from her primary home in Jacksonville.
Sherrer had been managing to get out West — to enjoy her second home — just four to six times a year.
“They said in an article that if you buy a second home within 45 minutes to an hour of where you live, you will enjoy it so much more,” she said. “And I thought, ‘Hello.”
Ironically, Sherrer’s epiphany occurred while preparing for a presentation on the second-home buyer market.
“It really hit me right between the eyes,” she said, “that if you buy within a good driving distance of your primary home, you get more enjoyment from the second home.”
Second homes are largely considered in the industry to be vacation homes or investment purchases. In 2014, vacation home sales catapulted by 57 percent nationwide, reaching their highest level since 2006. Meanwhile, investment purchases decreased by 7 percent, falling for the fourth straight year, the National Association of Realtors said.
Still, vacation home prices fell in 2014, likely because of more condominiums and townhouses being purchased, the association said.
Second homes are particularly big business for Berkshire Hathaway and Watson Realty Corp., which the Northeast Florida Association of Realtors said are — by far — the region’s luxury market leaders.
Getting ahead of the storm
There’s an expression, “You never hear of anyone retiring and moving up North.”
While that’s not entirely true, many more Northerners target the South for second homes exclusively because of the weather than vice versa.
“I’d say that’s the No. 1 reason for second homes in this market,” said Barbara Maple, a Ponte Vedra Beach-based Watson Realtor who attributes the Northeast’s brutal 2015 winter to several recent second-home sales to New York clients.
New York, Virginia and Georgia provide the largest number of new residents to Northeast Florida, the University of Florida Bureau of Economic and Business Research said.
“The New York influx makes a lot of sense to us — everything from cost of living to the weather to the lifestyle,” said Berkshire Hathaway Executive Vice President Christy Budnick, Sherrer’s daughter.
Northern-based second-home buyers in Northeast Florida, Maple said, tend to be baby boomers who likely will convert their recent purchases into their primary homes in the coming years.
“They haven’t retired yet, but they have the money now, so they say, ‘We’ll buy it now and we’ll come down to Jacksonville or St. Augustine in the winter when there’s eight weeks of freezing snow and ice back home,’” Maple said.
Those same customers, Maple said, are inclined to select retirement-driven communities in St. Johns County’s Nocatee development over St. Augustine, Jacksonville Beach or Amelia Island.
“Nocatee’s a ready-made community with ready-made friends and a ready-made social life,” she said. “That’s the draw.”
Many second-home buyers, Budnick said, are people who unsuspectingly became enamored with the Jacksonville area.
Their first visit may be due to a business meeting or convention, attending a military function or getting medical treatment or visiting a family member.
“A lot of times their decision usually (to relocate or buy a second home in Northeast Florida) does have something to do with a really rotten winter or some other catastrophe,” Budnick said.
Nationally, second-home buyers typically are younger (average age of 47); are two-income households with an average combined annual income of $94,000; and usually put down larger down payments than they did on their first homes, the National Association of Realtors said.
Those purchasers are inclined to seek out Florida or California beach communities; the NAR said 47 percent of vacation homebuyers purchased in a beach area, 19 percent bought in the country, and 17 percent purchased a second home in the mountains in 2014.
The NAR said about 70 percent of second-home purchases are for vacations, family retreats or future primary homes.
Corporate executives, who represent about 20 percent of Berkshire Hathaway’s clientele, usually aren’t among the second-home buyers, Sherrer said.
“They’re typically much too busy — much too focused on their careers (for second homes),” she said.
No place like (close to) home
Among the questions prospective second-home buyers face, as Sherrer learned well into her real estate career, is how often they will visit the home and how much time they spend there.
Other considerations include whether it’s worth the money and cost factors such as depreciation, taxes and fees, upkeep, and association dues.
And, of course, location — which especially stirs the passions of home shoppers.
“There are a lot of different drivers that make people buy a second home, but we all know that buyers buy on emotion. That’s usually the bottom line,” Sherrer said. “You usually fall in love with the place you buy.”
That’s exactly why a significant share of Northeast Florida’s second-home buyers has primary homes nearby, the Berkshire Hathaway and Watson real estate professionals said.
“When I first moved here (from Miami), I thought it was really funny that somebody in Ortega or San Marco would buy a second home at the beach,” Sherrer recalled.
While real estate values are on the rise in Northeast Florida, the price growth is much more rapid in South Florida, providing Jacksonville-area homebuyers — and their Realtors — a competitive advantage.
“Our area is still a little undervalued,” Budnick said.
Another sales advantage, the Realtors say, is Northeast Florida’s list of amenities. Among them the Jacksonville Jaguars, The Players Championship, national golf and tennis headquarters, Mayo Clinic, St. Augustine’s history, the universities and the ocean.
“It’s kind of an unbeatable combination — and you’ll be two hours from (Disney World’s) Mickey and Goofy,” Sherrer said. “It’s like the best of all worlds — and you still get a change of season.”
Who’s buying second homes and where?
• Baby boomers, with an average age of 47
• Two-income households with income totaling $94,000
• 47 percent buy in a beach area
• 19 percent buy in the country
• 17 percent buy in the mountains
• Residents of New York, Virginia and Georgia lead second-home buyers in Northeast Florida
• 70 percent of second-home purchases are for vacations, family retreats or future primary homes.
• Who isn’t buying? Corporate executives, who are typically too focused on their careers verses a second home.