U.S. population growth in general and growing wealth in our top 25 percent are the fundamentals driving sales of second homes, land, and land investments in the country. Neither of those engines are likely to change.
But the countervailing trend is the probability of increasingly high energy prices, particularly for petroleum-based transportation fuels. The more it costs to drive to a weekend place, the fewer times the owners are likely to drive it. That’s the theory anyway. The related idea is that the high cost of fuel will discourage buyers from acquiring country property in the first place. This, if true, could depress sales and prices.
At the margins of the second-home and land market, I think $5/g gasoline will discourage purchases and trips. But at this price point–and higher, which I expect–consumers will start substituting fuel-efficient electric and hybrids for the SUV dinosaurs. The market is the self-selected upper one-third, or upper 20 to 25 percent of all taxpayers, so I doubt that the cost of a weekend trip rising from $50 in gas to $100 will actually discourage sales to this group.
But I could be very wrong.
Let me hear your thoughts.
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