The 50 Most Expensive Small Towns in America: Where You Should Buy a Second Home

If you are mulling a location for your second home, here’s an article that is like a beacon of real estate appreciation light: the 50 most expensive small towns in the U.S. At first when I read this, I was sad: most of the towns are in New York, New Jersey, Maryland, Washington (state), Cali and Florida. (Jupiter Island, home of Tiger Woods, has been holding court at number two spot for a long time.) Those places are pretty far from me in Texas. But then the investment light-bulb went off. What can we learn from this list about making a sound investment in a second home? Let’s face it, we do not want to buy in a place where values are going to plummet. And no one really expects huge appreciation in this market short term. Long term is what it’s all about, and if I buy, I want a place my grand kids can say, boy that crazy granny of our’s was one smart cookie to buy this when she did. We could never touch this now.

So what do we learn from this list, no matter where we are buying?

1. Buy where other rich people are buying. I know this sounds like “follow-the-Prada” herd mentality, but there is a kernel of truth. Why has Aspen real estate always done so well? Because people with money, who are insulated from market turns and tuggles, live there. They don’t have to sell because they are underwater. They don’t get underwater. They weather the storm and hence, your neighbor’s property values are not about to go into the toilet.

2. Buy near a body of water. With the exception of a ski home, or possibly a mountain retreat, people have a natural inclination to flock to water. (I swear I stared this blog just to be able to buy a beach house all my own, somewhere.) Maybe it’s the evolutionary genes calling us back to the water, but look at this list and find me one spot that is not near water. Yes, there are storms and hurricanes and wood rot and oil spills but has anyone heard about the end of building on Florida’s Gulf Coast? Will Pebble Beach ever be underwater? I don’t think so.

3. Golf courses must be good for real estate value. I’m told that during the boom, a golf course was developed almost every day in the United States, which means we have a ton — way too many, in fact. And golf is a dying game. The younger gen doesn’t embrace it like our gen, and our gen is not even as golf hardy as our parent’s gen. Golf courses have had to make drastic changes to stay in business — go casual, offer amenities, go green. And they are costly to maintain so watch your HOA dues that may be shelling out big bucks for tees. Still, if there is a golf course nearby, it means something for friends to do when they get together. It’s an added plus and besides, the wealthy love to golf.

4. Activities are a must. You can only hike and bike so much, and getting fried on the beach is no longer fun nor recommended by dermatologists. A good second home community is not too far from great shopping, movies, restaurants, equestrian centers, wineries, skiing (if mountains), fishing, boating. One of my sources tells me he is seeking a resort with great snorkeling because not everyone can S.C.U.B.A., but even a 70 year old can snorkle.

5. Find a town where people don’t worry about locking their doors. The town is small but loaded with families. It is safe enough that small kids can have total freedom during the day. We used to ski in Utah at Snowbird when our kids were young. I’ll never forget the freedom I felt when I said, here are the keys to your room, you are free to go anywhere in the resort. We lived in a big city where they had to be shadowed, supervised and shuttled everywhere for protection. How refreshing it was for both of us to be able to navigate in a safe environment, much like most of us did growing up in the 1950’s and 1960’s.