The Third Home Comes Within Reach

Posted by Sheila Redick on December 31, 2005

Third homes are now within reach of an increasing number of modestly well-off Americans. The New York Times and the Chicago Tribune have recently reported on the trend. Some multiple home owners are pursuing a "season-to-season lifestyle." Others do it for work. Still others want to add a downtown perch close to restaurants, cultural and sports events and nightlife.

The New York Times quotes Paul Bessler, vice president for strategic marketing at Dallas developer Centex Destination Properties, saying, "Depending on the community, between 8 percent and 38 percent of our buyers have three homes or more." The current trend, he told the Times, is driven by baby boomers who are reaching their peak earning years. He likened third homes to other luxury lifestyle markers that have trickled down from the have-a-lots to the mere haves, like spa vacations and multiple cars.

According to the U.S. Census Bureau, there are 43.8 million second homes in the U.S. and 2.82 million second homes were sold in 2004.

A Miami couple explained their pursuit of a fourth home to Times reporter Melinda Blau this way. "We can always sell and make money. And if I had to, I'd do it the same way over again. It makes for a fun, interesting life, and a good and early retirement."

The acquisition of third homes can be good news or bad news for cities. For appealing cities, it can mean continued energy in the real estate market, a new burst of downtown housing, new citizens to enter into civic life and support for those things that make a city lively and fun. Less appealing cities may become simply places where people have work or family obligations, while they pursue their civic commitments, entertainment and nonessential shopping elsewhere. That could mean a loss of sales tax dollars, a smaller market for entertainment options, fewer people to get the civic work done, fewer philanthropic dollars.

Is your city a logical choice for third home owners?