Expert Insight: The Perks and Practicalities of a Second Home

A few years ago, taking meetings from your oceanfront balcony or the deck of your mountain retreat, or answering emails with a view of the beach, was a rare and impractical occurrence. But in today’s post-pandemic world—where a second home is likely to get as much use as a primary residence—it’s a fact of life for many of us.

Americans went on a record homebuying spree during the pandemic. According to CNN, in 2021 home sales reached their highest level in 15 years, with an estimated six million properties sold—in large part because an increasing number of people were suddenly able to work remotely, splitting their time between two or more residences.

Real estate experts predict that the trend is likely to continue, even as interest rates increase. That’s because until now, most people who owned a second home mostly spent weekends or vacations there. Today, they’re staying for months at a time. In fact, the buying spree for second homes is so strong that The Wall Street Journal coined a term for it: co-primary homes.

Practical Perks*

While splitting your time between two residences undoubtedly has its benefits, it’s not without practical considerations. For example, American taxpayers can have only one domicile, and since state income and property taxes vary, where you choose to have your second home can have significant implications.* It’s for this reason that Florida and the Northeastern states saw an influx of residents during the pandemic from areas known to have high tax burdens.

Taxpayers who own their primary homes in Florida and New Hampshire, for example, are entitled to exemptions on property taxes and don’t pay state income taxes. That’s a significant saving for buyers from states where that isn’t the norm.

Related: Read Our Update on the Real Estate Market in South Florida

Second-home buyers seem to be considering more than just taxes, however. “We’ve seen an influx of people in high-paying industries such as finance, technology, and creative fields looking for second homes here because of climate-related concerns in other regions of the U.S.,” says Slater Anderson, Managing Director at LandVest Inc. in Boston, Massachusetts. “Your job is a huge determining factor for where you live, so having the ability to work remotely changes everything.”

Lifestyle Options

According to the real estate professionals, the demographic of buyers responsible for the surge in second home sales is a younger one. In many cases, they have growing families to accommodate.

“Second-home buyers have traditionally been older empty-nesters. However, over the past two years we’ve seen a substantial increase in young affluent families,” Premier Estate Properties says. “They want private schools, a better climate, vibrant culture, great sports teams, and lower taxes. In short, they want a better lifestyle.”

As a result, affluent buyers are choosing second homes in locations where everyday conveniences are plentiful—things such as access to quality healthcare, which you wouldn’t necessarily consider during a weekend visit or an occasional vacation. “People want everything they might possibly need close by,” Premier Estate Properties says, “including the best restaurants and shopping.”

Related: Discover 5 Pieds-à-Terre Perfect for a Second Home in the City

Easy access in and out of the destination is also key. In Florida and the Northeast, for example, there are multiple large airports with a plethora of direct domestic and international flights. And having a second home you can enjoy in any season is an additional bonus. “The draw of New England is the seasonality, the variety, and the drivability,” Anderson says. “It’s a six-state region that’s easily accessible with simple drives or flights.”

“People seem to be doing a lot of reflection and self-evaluation about what is important, and where and how they want to spend their time,” Anderson says. “Now that people can live anywhere, the question is, ‘Where do I want that to be?’”

Banner image: A waterfront home in Massachusetts, on the market with LandVest.

*Christie’s International Real Estate does not provide tax, legal or accounting advice. This article is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.