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Living in Your Dream Vacation Home

Thanks to low interest rates and good prices, these couples took the plunge and bought the vacation homes they’d always wanted.

Richard and Laura Ward paid $690,000 for this home in Oxford, Maryland—$305,000 less than the original list price. Photograph courtesy of Laura Ward.

Jane McCarthy and her husband, Stephen, used to spend their weekdays counting the hours until they could escape DC and head out Route 50 to their house on Maryland’s Eastern Shore. “As soon as we crossed the Bay Bridge, my stomach would settle,” says Jane. “I felt like a new person, revived and rejuvenated.”

The McCarthys now live year-round in Oxford, Maryland, where Jane, a real-estate agent, works often with Washingtonians searching for retreats. The past few years have been tumultuous, she says. First, prices skyrocketed, then the bubble burst—by 2010, the number of vacation homes sold nationwide had fallen by almost 50 percent from their peak in 2006. “Second-home buyers were definitely scarce,” says McCarthy. “Buying a primary home was tough enough.”

Although prices in many popular resort areas are still falling, agents and lenders say the market is showing signs of recovery. In Virginia’s Rappahannock County, the number of homes sold climbed by almost 15 percent from 2010 to 2011. Homes in some areas are also selling faster—in Maryland’s Garrett County, they sat on the market an average of 208 days this past November, a drop of 26 percent from the same month in 2010.

Bill McGuire, a lender for First Home Mortgage in Easton, says that historically low interest rates and low prices have finally begun to lure buyers: “A lot of our clients had been looking casually for several years but were too afraid to jump in. They’re realizing that now may be the time to buy.”

New lending regulations make it hard to qualify for a loan, and lenders are requiring bigger down payments—usually a minimum of 20 percent. But it’s not impossible, says McGuire: “The misconception is that you can’t get a mortgage on a second home, and that’s just not true. Is qualifying harder than it used to be? Absolutely. It’s practically open-heart surgery. But once you do, you’re set.”

We tracked down three Washington families who have recently bought a vacation home. Here’s how they made it work.

Strategy One: Don’t Be Afraid to Low-Ball

Buyers: Richard and Laura Ward of Frederick.
Wish list: A family-friendly house on the water that could become a primary residence in the future.
Budget: $700,000.
List price: $995,000.
Purchase price: $690,000.

For years, Richard and Laura Ward kept their 38-foot Saber motorboat in a slip in Annapolis and spent as much time on the Chesapeake Bay as their harried schedules allowed. In 2007, they began storing their boat in Oxford, Maryland, during the winter. “We knew we wanted to end up there,” says Laura. “The idea of being right on the water in such a sweet, quiet town was exciting.”

The Wards—who also own homes in Annapolis and North Carolina’s Outer Banks—had been casually looking for an Eastern Shore house for a few years when a waterfront farmhouse with a red door hit the market in November 2010.

“Although it was perfect, it was a little more than we wanted to spend, so we kept looking,” says Laura. Another buyer made a bid for far less than the asking price, so the Wards decided to make an offer as well. “In the end they accepted ours, as it wasn’t a contingency offer,” she says. “We ended up getting the house for way less than we had expected—and definitely sooner than expected.”

With prices around the region the lowest they’ve been in years, real-estate agents say people are snapping up bargains with the intent of retiring in the homes later. According to the National Association of Realtors, more than a third of vacation-home buyers in the last year plan to use it as a primary residence later. “Waterfront properties in this area are selling for 30 percent less than they were in 2007,” says Jane McCarthy, an associate broker with Benson & Mangold Real Estate.

The Wards say their long-term plan is to sell their other properties and live year-round in Oxford. For now, they’re content to visit during summers and on weekends with their nine-year-old twins, who enjoy searching for sea glass along the shore and riding their bikes around town. The only drawback? Their son’s newfound love of sailing. Says Laura: “We might have to look into a sailboat.”

Strategy Two: Rent It Out

Buyers: Rial and Sandra Coleman of Fort Washington.
Wish list: Lake views from a furnished property.
Budget: $425,000.
List price: $428,000.
Purchase price: $425,000.

Rial and Sandra Coleman had always hoped to buy a vacation home they could share with their family. They envisioned a resort within easy driving distance of their home in Fort Washington. When they visited Western Maryland’s Deep Creek Lake for the first time to attend a family reunion in 2006, they were hooked. “Even the drive to the lake was gorgeous,” says Sandra of the three-hour trip. “Once we realized that it is a four-season resort area, we decided to start looking.”

After three trips to the lake, the couple found Sunplace, a condominium community with 325 feet of common lake frontage, views of the water and mountains, and a western exposure that allows for prime sunset watching. They settled on a three-level, 1,500-square-foot unit and signed the dotted line along with Sandra’s parents.

After a few visits, the Colemans realized the potential for renting out the condo when it wasn’t in use. “It was in a great location with gorgeous views, easy lake access, a pool—and we knew it could be rented all year long,” says Sandra. They hired a management company to oversee the rental arrangements. Within a few months, they had their first customer.

“The key to renting success is to find a home with all the bells and whistles in an area that can attract year-round renters,” says Beverly Everett, an agent with Coldwell Banker Deep Creek Realty. “But it takes a while to build up that pool of repeat renters.” Between management-company commissions—usually around 20 percent—and a competitive rental market, buyers hoping to cover their mortgage costs completely might find themselves in the red.

“We’re definitely not able to cover all of our costs,” says Sandra, whose condo is rented about 20 weeks a year. “And we do have to schedule our time around other people’s vacations. But we are able to cover the unexpected expenses of owning a second home, and it surely takes the sting out of the mortgage payment.”

Strategy Three: Consider a Short Sale

Anthony and Mina Anyadike bought this property in Rehoboth for $685,000. Photograph courtesy of Chris Beagle, Prudential Gallo Realtors.
Buyers: Anthony and Mina Anyadike of Ellicott City.
Wish list: A single-family home with room for extended family, within biking distance of the beach.
Budget: $400,000 to high $600,000s.
List price: $799,000.
Purchase price: $685,000.


With a busy orthodontics practice and three children at home, Anthony and Mina Anyadike wanted a second place within a few hours of their home in Ellicott City. “We have such a small window of time to travel,” says Mina. “We thought if we had a place in Delaware—just two or three hours away—we’d be able to get there on the weekends.”

Low interest rates, competitive prices, and the chance of a good deal convinced them to begin house-hunting in April 2010. “We were intrigued by the idea of a short sale,” says Mina. “We weren’t in a huge hurry, and we thought we’d be able to get a nice house in an ideal location that we wouldn’t otherwise be able to afford.”

But after months of searching in Rehoboth Beach and one failed attempt to buy a short sale last year, the Anyadikes were ready to give up. “The drawback of the short sale is that it’s really a gamble—you never know if your offer is going to be accepted,” says Kathy Douglass, the couple’s real-estate agent. “You’ve really got to be patient and have the luxury of time.”

Last March, the Anyadikes offered $685,000 on a home in Rehoboth’s Canal Corkran subdivision that was listed for $799,000. “The house was perfect—an open floor plan, in great condition, and within walking distance to the beach, shops, and restaurants,” says Mina.

In October, their offer was accepted. “They really did get a great buy,” says Douglass. “Homes in Canal Corkran are selling for up to $1.7 million.” The Anyadikes feel they made a solid investment and expect to retire to their home in ten years, after their youngest child goes to college. Says Mina: “If we had waited ten years, we wouldn’t have been able to buy a home like this.”

This article appears in the February 2012 issue of The Washingtonian.

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