A recent Wall Street Journal article suggests the clouds may be lifting over the national vacation home market, especially in the luxury segment of the real estate market. Overall, the second-home market is down 11% from 2009 and roughly 25% from 2006, compared to a 22% drop in the overall housing market, according to the article. However, the higher end of the vacation home market ($5 million and up) has held up much better. Douglas Duncan, chief economist at Fannie Mae explains “At the top of the market, particularly luxury homes, prices have proven very elastic, and have sprung upward quickly”.
Markets such as Palm Beach Island, FL, the Hamptons, NY and Aspen, CO have been experiencing an uptick in inquiries and real estate sales. This is not to say the boom is back, however. Overall, properties that are in prime locations, such as waterfront or ski resort properties, are selling, but homes in less desirable locations are still a bit sluggish. In addition, areas that were able to avoid over building and therefore keep inventories at a manageable level have also seen an improvement in sales.
What’s interesting is that most vacation home buyers aren’t looking to make a big profit. According to the National Association of Realtors (NAR), more than 80% of second home buyers surveyed reported that they purchased for consumption reasons – to live in the house and enjoy it – not for investment. Additionally, many second home buyers are cash buyers (36% of vacation home purchases last year were all cash deals, according to NAR) and they can therefore sidestep many of the restrictions placed on second home purchases by lending institutions.
In Jackson Hole, inventory levels remain high, creating many opportunities for second homebuyers in Teton Village, The Aspens, Teton Pines, and Shooting Star Golf Community. If you are interested in a link of available second home properties in Jackson Hole, please email us at email@example.com — The Gillespie Real Estate Team at Jackson Hole Sotheby’s International Realty.
For a full copy of the Wall Street Journal article, click here.