Invest in Yourself

Forget the Rolex, the BMW, the giant-screen TV. Those baubles are so last century. The hottest status symbol today holds its value considerably better. It's real estate-specifically second homes and vacation getaways.

According to the National Association of Realtors, 359,000 second homes were sold in the United States in 2001. During the first quarter of 2003, 15 percent of homebuyers were either purchasing a second home or already owned one.

Second homes appeal to those wary of stock market aftershocks as well as to those who prefer that their investments bring tangible psychic benefits. Indeed, surveys show that the vast majority of second-home buyers-close to 80 percent-buy properties primarily for their own use.

Florida, with its bounty of sun and sand, has always been one of the preferred venues for seasonal and vacation homes. Census Bureau data for 2000 shows 13.5 percent of all second homes in the U.S. are located in the Sunshine State. South Florida, in particular, has lured flocks of snowbirds for decades.

But in recent years, second-home shoppers increasingly have been sampling the charms of Northeast Florida.

"People have traditionally thought of Jacksonville as a working city, rather than as a place to vacation or retire," says designer Rita Williams, owner of Rita Williams Merchandising Plus. "But that's changing. We've got the ocean, we've got golf, we've got tennis and we've got a slight change of seasons, which people enjoy."

Northeast Florida's second-home market started with Amelia Island in Nassau County, but has now moved south through the Beaches and all the way to Jacksonville" target="_blank">Flagler County.

Vicki Dillard, director of marketing at Jacksonville" target="_blank">Flagler County's posh Hammock Dunes, says her project has benefited from this trend. And she adds that many second-home buyers become so attached to the area that they become permanent residents.

"We have people who bought patio homes or condos for vacations who liked it so much they started spending more and more time here," Dillard says. "The next thing you know, they've traded up to bigger second homes on the ocean, and now consider their house elsewhere to be the 'second home'."

Dillard says second-home buyers are discovering the "hidden jewel" that is Northeast Florida. "You've got Jacksonville and its amenities, historic St. Augustine and the beach is next door," she notes. "But you can still find vacation homes that feel far from city life."

Although Northeast Florida is fast-growing, the area still hasn't come close to the population density-and the attendant traffic and infrastructure strains-of South Florida. It's also more affordable-a factor that is attracting buyers from other parts of Florida as well as the traditional Snow Belt states.

"People come up from South Florida and they're amazed at how much house they can get for their money," says Claude "Chip" Boring, National Association of Realtors vice-president for Region 5, which includes Florida. "They're also surprised at how much lower the taxes are than in South Florida. Plus you've got fauna, lakes and oceans to choose from. That's very attractive to retirees and to people who are still raising families."

Economists say that aside from stock-market shy investors, the current bull market in second homes is being driven by low mortgage interest rates, by tax laws that favor dual-home owners and by forward-thinking baby boomers who have amassed considerable equity in their primary residences.

These factors explain why the typical second home buyer is financially comfortable, but not necessarily wealthy. NAR research shows such buyers, on average, to be 47 years of age with a household income of $85,900. The median second-home price in Florida during the first quarter of 2003 was $150,000, according to NAR research.

Real estate professionals have also noted a trend toward more locals buying second homes within easy driving distance of their primary residences.

Jeannine Balanky and Lenny Daughtry, a 40-something San Marco couple, own an oceanfront condominium in Jacksonville Beach. The efficiency is 20 minutes away from their primary residence, which means the couple and their two children can enjoy the Beaches whenever they want.

"We love to escape on a Friday afternoon," says Balanky. "We love the ocean, we love the restaurants and we have friends who meet us there. Our house in the city is near work and the kids' schools. The condo is about getting away. It makes for a nice balance."

Although old-money Jacksonvillians have for generations owned second homes at the Beaches, Balanky says more of her work-for-a-living peers are considering similar arrangements because of travel hassles caused by tighter security at airports and a lingering unease over taking long trips.

"Since 9/11, I think people are staying closer to home during their vacations," she says. "Once you start thinking about spending your vacation time nearby, it makes sense to find a place that you can use whenever you have a few days to spare."

While the Jacksonville Beaches have seen the most second-home activity so far, downtown may be the next getaway hotspot. Nationwide, 2003 saw a trend toward homebuyers eschewing remote hideaways and buying vacation condos in the middle of metropolitan areas-and in Jacksonville, there are now some appealing urban options.

Such close-in getaways suit buyers whose idea of a vacation involves museums, theaters, concerts, restaurants and nightlife. Jacksonville's night-on-the-town options are set to expand with new eateries and clubs opening in advance of the city's Super Bowl 2005 festivities. In addition, the recently opened 16,000-seat Jacksonville Coliseum promises to bring big-ticket concerts and events to the once-sleepy downtown area.

Riverfront residential developments such as The Plaza, Berkman Plaza Townhomes, The Shipyards and The Peninsula are already seeing some second-home activity. Perhaps the most high-profile purchasers thus far have been Jacksonville Jaguars majority owners Wayne and Delores Weaver, who snapped up a unit at The Shipyards. The Weavers' primary residence is in San Jose, less than a half-hour away.

Smaller multifamily projects planned for downtown and in the adjacent neighborhoods of Riverside and San Marco promise to bring more second-home activity to the city's urban core.

VillaRiva, for example, is a new 66-unit luxury condominium development facing the St. Johns and squarely in the middle of the Riverside/Avondale Historic District. Developer Bryan Weber of The Auchter Companies says second-home buyers have shown particular interest in the project, where prices start at $650,000.

So, should you consider buying a second home? Experts say buyers should select secondary digs that meet at least two of these three criteria: Love, investment potential and utility.

As with a piece of art, you should be clear about your reasons for wanting a particular place. The rustic cabin you love may not be your best financial investment and the suburban condo with the best resale profile may not be a place you'll want to spend much time.

Utility may be the factor that tips your purchase toward love or investment potential. If you're buying strictly for love, and you'll be able to spend a lot of time at your property, by all means have at it.

Just don't tell your boss, your neighbors or your inlaws where they can find you.