To help second home shoppers identify the best place to purchase their new
home next to their favorite hobby, Zillow produced a Second Home Index;
comparing cities throughout the United States. Scores Range from (0-100); here’s
how it works.
This endeavor had two steps—first to identify vacation cities near popular
destinations, then to order those cities according to their investment and rental
income potential.
There were three destination types that Southwest Florida locations scored very
well in:
- GOLF – Zillow identified places whose land area, starting from the city center and radiating out to five miles, were at least 5 percent covered by golf courses. To ensure a fun and lively community in these golfing hot spots, they required that the housing stock was composed of at least 15 percent being used seasonally or occasionally, as measured by the U.S. Census Bureau -aka vacation homes.
- BEACHES and BOATING – Zillow identified all places within 5 miles of a body of water spanning more than 40 square miles. To ensure these waterfront towns were vacation worthy, they required that the housing stock was composed of at least 15 percent being used seasonally or occasionally
- AMUSEMENT PARKS or ATTRACTIONS – Zillow chose cities within 10 miles of amusement parks, zoos, or other attractions and with at least 5 percent vacation homes in the area.
Within each of these city sets, they then calculate the Second Home Index. Homeowners want a second home purchase to have strong investment potential. That includes both future home value growth as well rental income opportunity for those homeowners expecting to spend a fraction of the year in their second home and renting it out during the rest.
To capture these requirements of the seasonal home buyer, it included two metrics: the price-to-rent ratio—or the ratio between the home price and annualized rent—and the 12-month home value forecast. For each metric, a score ranging from 0 to 100 is assigned of which the city falls. To combine these scores into one index, we simply average the two scores and then re-stretch to range from 0 to 100 within the set of cities assigned to each destination type.
The resulting Second Home Index surfaces cities whose homes have good investment and rental income potential perfect for the vacation of your dreams, no matter what kind of person you are.
Ready to see how Southwest Florida Cities Scored?
Ft Myers – Ranks #3 in the U.S. with a 88.9 score for homes between $150K-$250K and an anticipated 5.6% 12-month appreciation
Bonita Springs – Ranks #2 in the U.S. with a 74.1 score for homes between $250K-$400K and an anticipated 4.5% 12-month appreciation
Ft Myers Beach – Ranks #3 in the U.S. with a 93.6 score for homes between $250K-$400K with an anticipated 4.3% 12-month appreciation
Bonita Springs – Ranks #4 in the U.S. with a 92.9 score for homes between $250K-$400K with an anticipated 4.5% 12-month appreciation
St. James City – Ranks #5 in the U.S. with a 91.2 score for homes between $250K-$400K with an anticipated 3.4% 12-month appreciation
Bokeelia – Ranks #6 in the U.S. with a 92.6 score for homes between $150K-$250K with an anticipated 3.8% 12-month appreciation
Cape Coral – Ranks #3 in the U.S. with a 89.1 score for homes between $150K-$250K with an anticipated 7.9% 12-month appreciation
Numbers don’t lie! Southwest Florida is a Top Destination for Vacation Home Buyers who want to chip and putt, cast and relax, or simply just be entertained.
Summary of Zillow Study by Nathan Davis- Complete article at https://www.zillow.com/research/second-home-index-summer-2014-7160/
