The Summer Home Bust
Good riddance to those cottages on the Cape, those cabins in the Adirondacks!
In recent years, I've approached the summer with something resembling dread. Another three months of having to explain that, no, we won't be spending much time at our place on Cape Cod, seeing as how we don't have one. Sadly, my parents didn't have the foresight to purchase that adorable house in Tuscany for $600 when they happened upon it in 1958. Nor did my ancestors arrive on these shores soon enough to establish a compound on the Outer Banks. Bummer.
In the late boom, the lack of a second home marked you as a downscale outlier. Historically, only rich Americans had second homes. But as easy credit flowed like a mighty stream, second-home ownership trickled down. In 2005, the combined sales of vacation and second homes (many of which are bought either as vacation homes or to rent as vacation homes) accounted for 39 percent of total home purchases. In 2006, a record 1.07 million vacation homes were sold, according to the National Association of Realtors. The typical vacation-home buyer that year had a household income of $102,200—well-off, but hardly rich.
And so it became déclassé to stick around, especially when there were so many exciting places to go. Each Friday, the New York Times "Escapes" section presented a new locale where readers should think about setting up a homestead, each more implausible and inconvenient for New Yorkers than the next: A-frame houses near Lake of the Woods in Minnesota, lakeside developments in Kansas, mountaintop retreats in North Carolina.
But with people underwater on their primary homes, unemployment rising, and lenders melting down, the air has come out of the second-home bubble. Some of the hardest-hit areas of the real estate bust—Florida, Phoenix, Las Vegas—are second-home havens. The real estate market in the Hamptons is as still as the Sargasso Sea. In 2008, sales of vacation homes and investment properties nose-dived 50 percent from their bubble-era peaks. This spring the Times folded "Escapes" as an independent section.
The virtues of second-home ownership were not something I ever grasped. I grew up in Michigan, where many of our neighbors had a cottage or cabin "up north"—the vast stretch of the state that was even colder than where we lived. These primitive structures could be used for summer pleasures, like swimming in freezing lakes and swatting away flies the size of hummingbirds, and for utterly mystifying winter pursuits, like ice fishing and cross-country skiing. My parents were displaced New Yorkers. Our primary winter sports were reading and brooding.
As an adult, after moving to the suburbs and assuming the yoke of homeownership, I discovered that the concept of a second home made even less sense. Finding a plumber who will return your phone calls within 72 hours is a once-in-a-lifetime thing. Finding two? Impossible. The fair Connecticut town in which I reside is blessed with a lovely waterfront that offers golf, tennis, and sailing. The PPC (pools per capita) ratio is close to 1. And yet, come June, to my befuddlement, many of our neighbors shutter their homes and flee to other summer hot spots. It's like living in a seaside resort in Jamaica and buying a time share in Aruba because you need a place to go for Christmas break. Upon learning of these strange habits, I had the same reaction that I did when I read that the Ingalls family left their little house in the big woods for the prairie because Pa thought there were too many people around. When you live in a place that's away from it all, what are you getting away from?
Well, comfort, for one. Many vacation-home owners seem intent on teaching their children and guests a lesson about how things were before modernity and thus outfit their getaways with creaky beds and unreliable showers. Civilization, for another. The invitations I've received to second homes throughout the Northeast—which I do appreciate, really—have always been a cause of anxiety. I spend the drive fretting about the availability of the two essentials for a decent summer weekend: air conditioning and the Sunday Times. (Of course, during the summer-home heyday, expressing such sentiments marked you as a loser. What, you have only one home?)
Second homes are still popular. According to the NAR, the United States has 8.1 million vacation homes and another 40.5 million investment properties. But in this period of deleveraging and simplification, in this age of the "staycation," there's no shame in sticking to a single home.
This summer, I'll finally be able to rusticate in my acre of bourgeois suburban heaven without apology or self-consciousness. Plenty of wildlife traipses through the woods in our backyard—deer, coyote, wild turkey, the stray hedge-fund manager scrounging for food. And our pool, hammock, basketball hoop, and (new this year!) trampoline provide plenty of outdoor diversions. The air conditioning will be cranking (don't worry about the planet—we buy wind-generated electricity), and the Times arrives reliably in the driveway at 7 a.m. every day, including Sunday.
A version of this article also appears in this week's issue of Newsweek.
Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at firstname.lastname@example.org and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.
Photograph of an ocean-front house by Lorraine Kourafas/Shutterstock.com.