Investors building high-end spec homes in luxury areas
A growing trend in the luxury vacation home sector is the spec building of second homes by investors. Many investors are focusing on the ultra-luxury communities like Boca Raton and Park City, Utah.
According to the National Association of Realtors, 13 percent of all homes – or 1.02 million – purchased in 2004 were vacation homes, up nearly 20 percent from 850,000 in 2003.
This trend is also common-place in Lee County on Sanibel and Captiva Islands. A quick review if the Lee County Property Records and current MLS listings for the newer high-end subdivisions on Sanibel like Butterknife, The Sanctuary and Beachview Country Club is quite revealing. Many of the newly constructed Sanibel luxury homes listed in MLS are vacant and owned by remote investors.
It will be interesting to see if this type of spec luxury building works for investors in Lee County. Unlike the overall housing, the market for high-end luxury homes in Lee County is soft where the current available inventory for homes over $1 million is 230% greater than a year ago.
This Is the Risk That Jack Took [NY Times]
Second-Home Market Surges, Bigger Than Shown in Earlier Studies [National Association of Realtors]