JAMES H. CROCKER
Complicated zoning
With more than 25 percent of all vacation homes located more than 1,000 miles away from a buyer’s primary residence, real estate experts say that it’s essential to network with real estate agents who specialize in the second-home or vacation resort market.
More than 200 real estate brokers from all around the world had a chance to do just that when they gathered last week for the National Association of Realtors’ second Resort Symposium and Workshop at the Cape Codder Resort & Spa in Hyannis.
The three-day event, the first to take place in the United States, offered not only networking opportunities but also a host of ideas and tips on the vacation home market. A panel discussion on Thursday, for example, provided participants with information on marketing, permitting, developing and financing luxury vacation properties. Later in the day, Tony Green gave a presentation about The Pinehills, an awarding-winning community of condominiums, custom homes, golf courses and commercial space that he is helping to develop in Plymouth.
Recognizing the significance of resort communities, NAR established the Resort Real Estate Committee last year to monitor and analyze issues and trends affecting resort and vacation markets. One trend that appears to be affecting many vacation areas is housing affordability.
Bruce Williams, a mortgage lending officer with Hyannis-based Cape Cod Cooperative Bank who was one of three Cape panelists discussing luxury properties at the symposium, said many second homebuyers face “sticker shock.” More than half of the buyers expect to pay less for their second home than they’ve paid for their primary residence, but that isn’t the case, he explained.
“Keep in mind that the buyers you’re driving around are just stunned” by the high prices, Williams said. “Folks aren’t prepared for it.”
A major factor fueling the second-home market on Cape Cod and other vacation destinations is the aging baby boomer population. The current average age of a baby boomer is between 57 and 58, meaning that they average at least 14 more years to look at properties, explained John Cotton, a Cape real estate broker who spoke on the same panel as Williams. Many of the baby boomers will have a substantial amount of built-up wealth to spend on residential property, he said.
Vacation Markets No Picnic
Those consumers are generally smart and “detest being manipulated,” Cotton told attendees. Cotton, who founded Cotton Real Estate 30 years ago with offices in Osterville and Hyannis and has specialized in the sale of waterfront and vacation residences, said it is important for agents who want to work with second-home buyers to rely on their spheres of influence.
“Understand that these folks travel in packs,” he said. Services that can help “feed sales” include rentals, tax abatements, appraisals and property management, he added.
Cotton also urged agents to have a well-executed marketing plan, consistent branding that links every message to a prior message, and to advertise in upscale magazines and publications, including the “Robb Report,” “Unique Homes” and “Cape Cod Life.”
Serving on the same panel as Cotton and Williams, James H. Crocker, a developer and Realtor in Osterville, discussed the challenges associated with permitting and building vacation properties on Cape Cod.
Crocker, who is president-elect of the Cape Cod & Islands Association of Realtors and owner of Wianno Realty in Osterville, said all 15 towns in Barnstable County have their own zoning ordinances. Picking up a stack of books containing the zoning rules of all Cape towns, Crocker provide examples of how complicated zoning can become. Barnstable, for example, has a 195-page zoning ordinance, while Falmouth zoning regulations are 123 pages long.
In addition to dealing with different zoning rules, Cape developers must contend with overlay districts and local comprehensive and affordable housing plans. On Cape Cod, builders also face competition from the Land Bank, which is funded through a 3 percent property tax surcharge that residents pay. The Land Bank purchases vacant land to preserve as open space.
Last year, Crocker lost out on three potential development deals because the Land Bank purchased the property. “The Land Bank is the best buyer of real estate on the Cape,” he said. And while saving open space is important, the “more land we take off valuation roles the higher taxes we have to pay,” Crocker said.
Other sessions, included information on how to work with elected officials and customers from different countries and cultures, and helping clients maximize their property purchases by understanding state and foreign tax issues. At the end of the symposium last Friday, attendees were invited to tour exclusive gated communities and luxury homes in Osterville.
