Nice article recently regarding the national vacation home market and the wild ride we’ve all seen over the last few years. Interesting how closely the Crested Butte market compares to places like Stowe Vermont. We too had a strong run up in prices aided by lack of inventory and strong demand. Now we are seeing asking prices for various properties tapering roughly 5%-10% off of last year’s highs.
Second Home Buyer’s Guide
Vacation homes in popular areas saw their valuations rocket with the broader residential market during the real estate boom. Now that the market has cooled and the investment speculators have gone home, buyers can expect to find a wide selection and prices that are flat or slightly lower — at least in some regions.
While those factors have tilted the balance in favor of prospective buyers, notably in areas with a glut of new condos, prices in many of hottest markets haven’t seen remarkable declines from their highs. Consequently, beachside bargains may be scant – and those seeking deals may have to travel to slightly less fashionable destinations to find true values. But for would-be buyers yearning to relax at their own retreat, rather than to turn a quick profit, conditions have improved.
“During the height of the boom, there was no inventory and what was available was overpriced, so you were apt to compromise on the home itself and the price you paid,” said David Hehman, president of EscapeHomes.com, an online vacation-home marketplace. Now, "it’s a great time to buy (because) there’s more inventory than ever."
Though vacation home sales declined precipitously in some regions, pricing didn’t necessarily follow suit. For instance, in California, where second-home purchases plummeted 37% last year, the median price paid still rose nearly 11% to $400,000, according to DataQuick, a San Diego firm that tracks national home sales.
Buyers have less bargaining power on the vacation home market because homeowners can typically afford to let their properties sit for longer periods. Instead of slashing the price, they can simply enjoy it for another season or rent it out, brokers say.
Pricing trends vary tremendously across geographies and terrain: beach houses tend to be pricer than mountain homes, but a ski chalet in the Pocono Mountains is far more affordable than a mountainside retreat in Aspen.
After experiencing a tremendous run-up in prices over the past four years, Ken Libby, owner of Stowe Realty, in the ski resort town of Stowe, Vt., said buyers now have a window of opportunity. While prices rose about 14% in 2006, he said they rose at a slower clip than the three years prior.
“It’s become a buyer’s market,” said Libby, adding the average home price in his market is the high- $400,000’s and inventories are higher. “Price adjustments are where they need to be, rates are (still relatively low) and the buyers are starting to see that.”
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