John Philip Mason is a residential appraiser with 20 years experience and covers the Hudson Valley region of New York. He’s a good friend and a true professional who provides unique insight to appraisal issues of the day. Here is his weekly post called Solid Masonry. This week John addresses how real estate location does not necessarily adhere to the tried and tested rules of thumb anymore. Jonathan Miller
It would seem the old adage of defining the value of real estate by “location, location, location”, has been turned on its ear. Whether by efficiency or through over competition, the airline industry seems to be a factor contributing to higher real estate values in “second home” markets. In a recent article by Les Christie of CNNMoney.com, Real Estate: The JetBlue Effect [CNN/Money], we find that those cheap air fares are finally good for something as more and more people are now flying off to their second homes.
Now I believe I speak for many of us who have a hate love relationship with the cheap fares. They’re great when you want to get away from it all or to go someplace special. But, we’ve also been hounded by distant relatives (we’d like to keep distant), who kept reminding us they are only two hours and a $59 plane ride away!
In the article Mr. Christie states, “You don’t have to be affluent to fly off to your weekend getaway anymore — with the rise of discount flyers like JetBlue and Southwest Air, second-home buyers have expanded their target areas outward.” He goes on to say, “In a survey last year, Escapehomes.com found that 60 percent of respondents planning to buy a second home were looking more than 500 miles away from their primary residence.”
So it would seem many people are no longer content with a simple country home just minutes from the highway or with a beachfront house within a few minutes walk from the ferry. The idea of a nearby place to get away from everyday life has a whole new twist. Neither the high cost of fuel nor post 9/11 security concerns seem to be putting a dent into this trend.
While Americans like to think they are always at the head of the pack, Europe is leading the way in terms of airfare pricing. Mr. Christie points out, “Although some of the fare deals sound pretty great, American carriers are still way behind the Europeans. In Europe, low air fares are transforming the vacation-home market. It’s now possible to fly from one European country to another for less than the cost of riding the bus to the airport.” The writer indicates the results are equally evident, as he goes on to say, “The UK’s Abbey National Bank estimates that some 1.2 million Brits now own second homes in France and on the Iberian Peninsula. Germans own some 300,000 homes in Spain. The French are even buying homes in Britain, to the tune of about 20,000.”
So now the term “location” is hardly a thought for anyone with access to airlines providing cheap fares. And being able to tell everyone you’re flying off to your “weekend place” is bound to impress, well, everyone! So what about location, location, location?
[about a month ago, I flew Jet Blue and there was a lot of turbulence and I promptly turned green. I now dub them: Jet Green -ed]