Constance Mitchell Ford explains why it’s happening more than you think
My Aunt Deloris had a bold and adventurous nature. As a young woman, instead of taking a “normal” job in an office like most of her siblings, she accepted a job on a luxury ocean liner and spent the next 25 years traveling around the world, visiting hundreds of ports of call on every continent. One day she was reading a newspaper that a passenger left behind. In it, she noticed a classified advertisement offering a house for sale in Monticello, a village in the Catskills mountains of upstate New York. The price was $10,000 and the seller wanted cash. Eager to settle down, Aunt Deloris wired the money to the seller and shortly afterwards was the proud owner of a home she purchased sight unseen. It was the 1970s. Luckily, it all worked out. She adored her house and spent many years there.
Who does that?
Every time she told the story of buying a house sight-unseen, I would shake my head in amazement and wonder “who does that?” In those days, few people would purchase a house they’d never seen, with the exception of Americans working abroad who needed to resettle back in the U.S. quickly, especially members of the military and, apparently, workers on ocean liners. Today, the number of people willing to take that risk is growing, due to technology and the Covid-19 crisis. A survey conducted in June by Redfin, the online real estate company, found that 45% of respondents said they made a bid on a home in the past year without seeing it first, which was up from 28% in 2019. Most of those bids may not have resulted in an actual completed sale. But the fact that more buyers are considering buying a home sight-unseen is sign of the times. Daryl Fairweather, Redfin’s chief economist, said the large increase in the number of people bidding on homes they haven’t viewed is the combination of several factors, including the low availability of homes that has promoted bidding wars, the pandemic-induced reluctance of buyers to tour homes that are occupied by strangers and technology which makes it possible to do virtual walkthroughs. In vacation-housing markets, all of these factors have been exacerbated. And because most vacation homes are hours away from a buyer’s primary home, the chances of seeing a vacation home in the hottest markets prior to placing a bid is becoming less likely.
Act fast and trust your agent
Agents and brokers keep lists of eager buyers and their property preferences. When a listing comes along that matches the buyers needs, the agent makes contact and contracts can be signed within hours or days. “The market is moving so fast. Our agents are very upfront with people. We tell them that if the home matches what you’re looking for, you must move quickly. If you wait to see it first-hand you may miss out,” said Lindsay Bolton, marketing manager at Finger Lakes Premier Properties in Canandaigua, N.Y. It all means that buyers are more reliant on agents and brokers than ever before. Brenda Connolly of the Connolly Agency in Avon-by-the-Sea, N.J. recently sold a $500,000 one-bedroom condominium sight-unseen in Asbury Park, N.J. to a buyer from St. Louis. Even though the buyer hadn’t set foot in the condo or building prior to placing a bid, he knew the area well and had visited often. “He had some familyties this way and it’s working out great,” said Connolly. If fact, most buyers who make sight-unseen offers are familiar with the community or have family members or friends who already live in the area. The proliferation of home-renovation television shows, which popularized the idea of turning a run-down—and sometimes scary—home into a castle, may be influencing some buyers to take more risk. “Someone from New York City buying a $200,000 lake house sight-unseen often expects to dump another $200,000 into the renovations,” to make the house perfect, said Brian Neilson, director of finance for Finger Lakes Premier Properties. Mr. Neilson purchased his own home in the Finger Lakes region sight-unseen. But he knew the area and made an offer as soon as the home was listed, fearing that if he waited the house would be gone. Since the Covid-19 pandemic “buyers have to remove as many contingencies as possible from the buying process to get it. One of those contingencies is buying sight unseen.” Not everyone thinks buying sight-unseen is good thing and warn buyers not to get caught up in the euphoria of the market. “I personally don’t recommend it,” said Cindy Mead, broker and owner of Gallo Realty in the Lake George, N.Y. area. She, and others, recommend that buyers at least get to know the area and location where they want to buy and rent a home in the area before actually buying. When she does get sight-unseen offers from buyers, Ms. Mead encourages them to find a friend or family member to visit the home. In those cases, she said, they “aren’t completely sight unseen. They’re asking their brother or Aunt Judy to come and take a look at it.”
In the News
Airbnb fuss and froth.Over on this hospitality blog, online travel tech consultant Max Starkov has some must-read analysis for second-home investors, prompted by the pre-IPO hype of Airbnb. He’s more cautious:
“…there is a limited inventory of these rentable second homes. In 2019 the total count of second homes in the U.S. was 7.4 million, accounting for 5.6% of the total housing stock. Europe’s housing stock is less than 5%. Many second homes are not-rentable since they are on the shabby side: cabin in the woods, fishing cabin by the lake, etc.”
He adds: “The working remotely mandates means that many owners of second homes – potential Airbnb hosts- are now working for months from their second homes (this is what I do currently), which means a segment of the rentable second homes are off the market.”
And some other headwinds to watch if you plan to buy a home, with an eye toward renting it out on occasion: “Due to the pandemic, popular are rentals of holiday villas/stand-alone vacation homes in resort areas, sector dominated in the U.S. by Vrbo; urban inventory, dominated by Airbnb, is definitely out of favor.”
Let us know how the ability to Airbnb and VRBO factor into your purchases.
Products We Love
We’re focusing this week on furniture that can do double duty — like all of us these days.
Take a seat. If you want extra seating for visitors (when that happens again), we recommend tufted or accent chairs to work between the living and dining room. Check this style out.
Office in the living room. If your home is now the office and school and basically everything, try this coffee table that lifts up to become a desk or table.
Slide out of bed. If your kids are feeling like the vacation home has become anything but as they do remote schooling, this bunk bed might cheer them up. You can still fit a desk underneath but the slide adds a whimsical start to the day.
On the market
This week we are featuring a unique custom log home, located on 23 private wooded acres in Guilford, New York, listed for $775,000. Why the owner loves it: The property has LAKE ACCESS and a WATER VIEW. Check out the listing here.
By the numbers
The median home price in California as of September, which has been hitting record highs for the last four months.
$ 3 Million
The price of an apartment inside of a historic 1800s church in Hoboken, New Jersey.
The percentage of Airbnb’s nights booked with professional hosts at the end of last year. Many individual hosts have complained that their listings get crowded out by corporate hosts.
These locks, recommended by the Wirecutter, sold out quickly on Black Friday. But the manufacturer assures us they are back in stock today. Use ULTRALOQ-STAYCATION for a 10% discount.
Like what you’ve learned? Please spread the word about The Escape Home. Sign up here. Your first six months are free. After that, subscriptions are just $99 for the year. You can also follow our Facebook page or join our private, no-shaming-allowed, members-only Facebook community.