Second Home Ownership

The idea of owning a summer home by the lake or a cabin in the woods has slowly ingrained itself into the traditional American value of owning a home. An aging Baby Boom generation and a long period of low interest rates have been primary factors for the continued increase of second home ownership.

The National Association of Realtors reported that slightly more than 1 million homes bought in 2005 were vacation homes. This accounted for 12.2 percent of all home sales in 2005. According to a survey released by the realtor trade association in May 2006, half of vacation homes are located in resort or recreational areas, 18 percent in small towns and 16 percent in rural areas. Considering the SOSA region fits all three of those descriptions, second homes are a prevalent feature in many of the counties.

Second-home development contributes to the consumption of agricultural lands in the Sierra through land use zoning changes. In communities where the second homes are prominent feature of the housing landscape, increased property values and land values can push average wage earners out of the community.

In 2000, second homes in the Sierra counties of California and Nevada made up 5.6 percent of the region’s total housing units, significantly higher than the state average of 2 percent for both California and Nevada. However, second homes dominated the housing landscape in several counties, especially Alpine (61.8 percent) and Mono (49.8 percent).

Download data Second Home Ownership

The popularity of second homes is prominent in the Sierra foothills near Yosemite National Park (Tuolumne County: 21.3 percent and Mariposa County: 18.8 percent) and just north of the park in Calaveras County, 24.2 percent. The northern Sierra counties of Plumas, 26.7 percent, and Sierra, 23.9 percent, also had a significant portion of its housing market devoted to second homes.

Simply looking at the raw number of second homes, the region connecting the Sacramento metro region and Lake Tahoe contains the highest concentration of second homes. El Dorado, Nevada and Placer counties account for 35.1 percent of all the second homes in the Sierra Nevada counties.

Case Study: The Social and Economic Effects of Second Homes
                   Northwest Colorado Council of Governments

While ranchettes contribute to rural sprawl with their tendency to fragment large chunks of land, other residential trends, such as second homeowners, contribute to the rise of residential land usage.

Using assessor databases from four counties – Eagle, Grand, Pitkin and Summit – the Northwest Colorado Council of Governments (NWCCOG) created a housing unit database to determine the prominence of second home ownership on the region’s economy and its housing availability. Download The Social and Economic Effects of Second Homes 2004. (Warning: This is a large pdf file.)

Located in the rural mountainous region of Colorado, the counties are home to several world-renowned ski resorts, have a strong historical ranching background and are now dominated by the tourism and service economy sectors. NWCCOG discovered that 60 percent of the housing units in the four-county study area were second homes. The percentages vary from a low of 49 percent of the housing units in Eagle County, 55 percent in Pitkin County, 63 percent in Grand County to a high of 67 percent in Summit County.

Second homes take up large amounts of land in Colorado's mountain resort areas where developable land is already in short supply. As a result, the second homes’ property values and the land surrounding them rises and potentially drive up the price of homes beyond what the average wage earner in the county can afford.

Over time second homes become a large and often dominant part of both the physical and economic landscape. The irony of second homes is they create a demand for construction, maintenance, and operations employees, yet rising home prices drive employees out of the immediate area. As the number of second homes increase, the demand for workers increases as well.

Rising housing costs make it difficult for the workers to live within a practicable distance of their place-of-work. Employees are forced to live in nearby towns with reasonable housing prices, creating bedroom communities coupled with second home communities.

NWCCOG is a voluntary association of five counties and 21 municipal governments in north central Colorado. NWCCOG was the fastest growing region in the state from 1990-2000, with a population growth at 73 percent, more than double the state’s population growth.