Vacation Homes: Why It Might Be Time to Buy

Home price declines remain the norm in many markets, but experts say certain luxury markets are picking up steam and attracting affluent vacation-home buyers. The median second-home price fell 11 percent to $150,000 in 2010 from the prior year, according to the National Association of Realtors; the price dropped 25 percent from 2006, compared to a 22 percent decrease for the overall housing market. Experts say sales activity depends on geography, with buyers more interested in prime vacation spots, and financing remains a challenge given that banks remain skittish about writing jumbo mortgages. However, NAR says more than 80 percent of second-home buyers made their purchases to simply enjoy the home — not as an investment — and the number of all-cash deals rose to 36 percent in 2010 from 29 percent in 2009, enabling buyers to avoid the more complex mortgage process. Prices have stabilized or begun to rise in Santa Monica, Calif.; Aspen, Colo.; the Hamptons, N.Y.; and Hilton Head, S.C. Meanwhile, Martha’s Vineyard, Mass., Vail, Colo., and Miami and Palm Beach, Fla., remain depressed but offer some bargains. | Read More