Time to Buy a Vacation Home?
Housing prices are more affordable than ever and that’s not just for a primary home. Today, the second-home luxury market is loaded with deals.
Second-homes that once were out of the price range for many are now viable options, according to The Wall Street Journal.
That means that homes that once were $1,000,000+ are now being offered for significantly less. For instance, a Hilton Head Island property in South Carolina sold for $1.2 million back in June 2006. However, by April 2011, the same three-bedroom home sold for $750,000.
Price cuts like these are causing buyers to take note. Reports in The Wall Street Journal indicate that the second-home housing market won’t stay soft forever. Right now some vacation markets are starting to stabilize and prices are even beginning to creep up in, for instance, luxury markets in California and Colorado.
However, hot spots exist for those interested in a vacation home in Miami, Florida, Martha’s Vineyard, or Vail. In these areas foreclosures are helping to keep prices from rising.
Here are some hot spot markets for vacation homes as reported in The Wall Street Journal.
1. Santa Barbara, California: Today’s median home price: $695,000 as compared to five years ago: $1,000,000. Certainly prices are still high in this California market but lower than they were several years ago. It appears this market is stabilizing and may see increases in the future.
2. Martha’s Vineyard, Massachusetts: Today’s median home price: $403,000, but five years ago it was: $638,000.
3. Vail, Colorado: Today’s median home price is $385,000, but five years ago it was $562,000.
4. Miami, Florida: The median home price is now $130,000, but five years ago it was $302,000. In Palm Beach, the median price there today is $254,000, but five years ago it was $758,000.
Earlier this year, the vacation communities saw increases in prices that reached levels equivalent to the days before the housing boom. Analysts attribute the increase to steep discounts and cash purchases.
Homes in prime locations, like those near the water or ski slopes, are selling well. Real estate experts say that foot traffic has increased in some areas by about 30 percent.
Of course, on the lending side, banks are still cautious about making second-home mortgages, especially if they’re jumbo loans (higher than federally guaranteed limits). Many banks have implemented stricter standards for second-home loans.
But for many second-home buyers, getting a loan isn’t a big concern. Many of these buyers pay all cash and skip the entire mortgage process. According to the National Association of Realtors, more than 80 percent of second-home buyers bought their homes not for investment purposes but instead simply for enjoyment and a place to live. Last year 36 percent of the vacation-home sales were all-cash transactions. That’s increased from 2009 when the figure was just under 30 percent.
If a second-home is on your wish list, this may be the best time to shop and find a bargain!
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