Cheap Air Fares Transforming Second-Home Market As Buyers Look Farther From Home

My wife’s family owns a beach cottage merely 50 miles from their primary residence. These days, according to CNN Money, they’re in the minority among second-home buyers. With the emergence of discount airlines like JetBlue and Southwest, buyers have expanded their target range by a considerable amount.

In a survey conducted last year, Escapehomes.com concluded that 60 percent of people planning to buy a second property were looking more than 500 miles away from where they live. You can call it the “jetBlue Syndrome.”

“Every year we watch as distance becomes less of a factor,” David Hehman, CEO of Escapehomes.com, said.

Paul Prescott, national director for Deloitte & Touche residential development department, concurred.

“The traditional second home was a two- or three-hour drive away. People felt it had to be, in order to get enough use of it to make it worthwhile,” he said.

Traditionally, second-home buyers chose destinations within a short drive of major cites. It’s what made the Catskills and Hamptons the weekend homes of choice for New Yorkers, and Cape Cod so desirable for Bostonians. The New Jersey Shore has long been the primary pick of Philadelphia natives. But nowadays, from New York City, you can fly to Burlington, Vt., quicker than you can drive to the Catskills. With fares as low as $45, it’s an open and shut case, especially with rising gasoline prices these days.

Leslie Gauff, a real estate broker with Carlson Real Estate in Stowe, Vt., said that inexpensive air fares have impacted her business.

“The Bostoners drive up for the weekend, because it’s about three hours. But many New Yorkers fly. I’ve had people say that it’s just as easy, in some ways easier, to fly up here than to drive to the Hamptons,” she said.

The figures agree, with Stowe median prices having appreciated about 18 percent a year for the past three years. Western resorts, meanwhile, are even more dependant on air transportation and likely to see huge growth as a result of low-cost fares. JetBlue flies from Long Beach, Calif., to Las Vegas for $44. Southwest flies to cities within Texas and anywhere within California — the two biggest states in the lower 48 — for $49 and $59, respectively.

But it’s more than just the low fares. It’s also ease and speed.

People are more comfortable flying now than even a few years ago, and fighting traffic to get to a weekend place really takes away from the experience. Anyone on the East Coast (from Florida all the way up to Maine) can easily relate to that. The crazy thing is that while some of these new deals sound great, American carriers are still way behind Europe, where low air fares are transforming the vacation-home market. You can now fly from one country to another for less than the cost of taking the bus to the airport.

The UK’s Abbey National Bank estimates that 1.2 million British citizens own second homes in France, while Germans own some 300,000 in Spain. Why? Take a look at a sample of prices posted on the website of RyanAir:

• Flying one-way from London to Dublin costs £0.79 — or about $1.39 in U.S. dollars.
• From Glasgow, Scotland, to Paris? A paltry £4.49, or $7.86 U.S.
• How about London to Berlin? Free. That’s $0.00 in American currency.

RyanAir has maintained profitability by slashing overhead costs, charging for services such as food and baggage checks, and allowing gambling onboard. As a result, the company claims that more than half its seats will be free within a few years. RyanAir is not the only carrier changing the course of the European industry, either. For example, easyJet will fly you from England all the way to Ibiza, Spain, for £30.99 ($54).

There’s nothing comparable in the United States yet, but give it time. No way you’re going to get a $1.39 flight to Vegas anytime soon, but the low fares could get lower as they become more popular, and already-hot housing markets will be impacted when and if they do. The expectations of the baby boomers are collectively much different than those of their parents. Plus, low fares attract tourists. When it comes to South Florida real estate, that can only mean the continuation of steady growth for decades to come.