The Alabama Gulf Coast's white sugar sand beaches and clear warm Gulf water have been the draw for millions of visitors each year. Now, those characteristics and its proximity to many large cities has Gulf Shores ranked in the top 10 best places to buy a vacation home.

Last week Vacasa, a vacation rental management platform in North America, released the 2022 Top 25 Best Places to Buy a Vacation Home list. The rankings were based on the rate of return on investment, median home sale price and annual gross rental revenue. According to Vacasa, a theme among this year's top markets is they are all drive-to, waterfront destinations. Gulf Shores topped the list at No. 10 with an average rate of return at 7.5% and area media home sale price of $437,250.

Local realtors David and Angie Swiger, owners of Swiger & Company, Realtors, said they tend to see two groups of buyers in the Gulf Shores market: young couples looking for
vacation homes and older people relocating to the area.

Vacation Renter becomes Property Owner

The Swigers have seen a trend in their average vacation homebuyer - past renters looking to become property owners.

"Young couples, in their 40s typically, want to buy a condo to rent it and enjoy it," Daivd Swiger said.

Angie Swiger added, "What they are trying to do is maybe start a portfolio and create some investment income for themselves."

"They know they can rent it because they have been renting themselves for years and have always wanted to be on the other end of it. It is common for us to have a couple from Georgia, Louisiana or Texas and they buy a small house or condominium. Their game plan is to enjoy it and put it on Airbnb or VRBO and rent it. They are sophisticated, smart and teach savvy. They have watched all the HGTV shows and are ready to transform the places they buy and rent it out," David said.

What price point are buyers looking at most?

The Swigers said most of their buyers are looking for a deal and value in the $300,000 to $400,000 range but they are getting harder and harder to find.

The Vacasa listed the median home sale price in Gulf Shores as $437,250 but according to the Baldwin Realtors Association statistics the average sale price for Gulf Shores in June 2022 was $555,986.

"We have a lot of people who try to get into the market in the $300,000 to $400,000s, but there is just not much there," said Angie Swiger. "We have had some people that have increased their buying power into the $500,000s so they can get something closer to what they are looking for."

Condo or Home?

The increase in year-round residents makes it difficult to pinpoint the number of properties purchased as vacation homes. The 2020 U.S. Census results showed the resident population of Gulf Shores increased by over 5,000 since the 2010 U.S. Census. Angie Swiger said most condominium sales are going to be investment properties.

"The inventory in the condo market was about the same as last year," said David Swiger. "We had about 1,030 condominiums sell through May 2021 and 1,043 through May 2022. An increase of about 1% but the average price per square foot has gone up about 27% during that same period."

Why Gulf Shores?

The easy day drive from large cities, the lifestyle, low crime rate and quality of life are all attractive to investors.

"A lot of issues we have out in the world just don't exist here," Angie Swiger said. "They (city officials) are careful about how we grow so that we don't turn into an over commercialized area like a lot of other beach towns. People care about the community, and it makes people want to move here or visit. It is two sided."

To see the full Top 25 Best Places to Buy a Vacation Home list, visit vacasa.com.

David and Angie Swiger are Gulf Shores based realtors. For more information about Swiger & Company, Realtors, visit swigerandcompany.com.