Not only are we in a wealthy economy - but the same economic indicators that favor first home ownership also are paving the way for the second home purchase.

Thanks in part to last year's new tax law changes, families can afford to make home purchases based on needs and desires rather than tax consequences. The Taxpayer Relief Act of 1997 excludes up to $500,000 in capital gains when a homebuyer sells a home, making it more possible to own and liquidate a second property.

In NAR's recent homebuyer/seller survey for 1998, vacation homes statistics were included for the first time. Although second homes accounted for only 2 percent of purchases according to respondents, that means over 107,000 vacation homes were sold through Realtors® in 1997.

In some cases, the leading edge of the baby boom generation is using equity from a home sale to trade down to a smaller, easier to maintain primary residence and also buy a second home, possibly as a trial retirement home. Or they may choose to move-up to a larger home and still afford a second home. Favorable economic factors such as demographics, tax changes, the growth of wealth due to the unprecedented stock market, tax law changes and other positive indicators are giving the green light to many second home purchases.

The relatively wealthy Boomer demographic is also known to spend top dollar for consumer goods, and will tend to view buying properties in resort communities as investment opportunities. According to recent research by Coldwell Banker, all the factors are in place to maintain a strong housing market. "Our research shows that consumers are interested in a better quality of life, which includes owning a second home," said Alex Perriello, President and CEO of Coldwell Banker®.

With the largest wave of baby-boomers turning 50 this year, and another 4.2 million reaching their fifties every year, there is a large segment of the population that is in the position or will be shortly to enjoy the good life - in a second or vacation home.

Published: July 24, 1998

Use of this article without permission is a violation of federal copyright laws.

Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.