Second-home deals
It's not too late to snare that retirement or weekend haven of your dreams
Don and Kathryn MacVicar knew one thing: They had to have a place in the sun. The couple from Halifax, Nova Scotia, have escaped the harsh Canadian winters the past few years by spending some time in Florida, "each year a little bit longer," Don, 61, says with a laugh. And now he and Kathryn, 60, are looking to spend even more, with Don's recent retirement from his job as a bank executive.
But if there was one thing they weren't crazy about, it was the Florida housing market. Prices in places like Fort Lauderdale or Miami Beach had gone "off the charts," he says. Even less-chic spots like St. Petersburg and Sarasota have been getting prohibitive. So the MacVicars kept looking--and looking--until they discovered Venice, a "quiet and laid-back community" just south of Sarasota. They found a two-bedroom condo that was within their price range, 10 minutes from the beach, and right on the seventh fairway of a golf course. It had all the amenities they wanted but none of the bustle of the state's east coast--and as a "steal" at $134,000, it wouldn't deplete their savings in one fell swoop. Don's advice for those looking for an affordable personal getaway? "Buy quick, because it's still going up," he says. "People are coming down in throngs."
Dreaming about a cozy second home on a beachfront or mountaintop, just like the MacVicars? You're not alone; 63 percent of affluent households have investigated the idea of buying a getaway in the past year alone, according to a recent survey by homebuilder Centex. But perhaps it's time for a reality check. Vacation-home communities have been appreciating even faster than the larger real-estate market. Appreciation has been "double what we've seen in primary markets," says David Hehman, president of the website EscapeHomes.com. The last time the National Association of Realtors looked specifically at vacation-home communities, prices had risen 26 percent over two years from 2001 to 2003. Ouch.
The result: According to real-estate watcher Ingo Winzer, president of Wellesley, Mass.-based consultancy the Local Market Monitor, getting into top resorts has become an unlikely dream for many. While most primary markets in the country might be up 3 or 4 percent in the past year, "many places in California and Florida might be up 10 to 15 percent or more," says Winzer. This frenzy, of course, isn't good news for housing affordability. Winzer crunches local income levels, then compares them with a market's median prices. By his calculations, Fort Lauderdale at $238,500 is now 36 percent overpriced, West Palm Beach at $262,300 is 29 percent too high, and Honolulu at $333,900 is 25 percent overpriced. Atlantic City/Cape May on the Jersey shore, at $299,800, is 56 percent above what it should be.
Up-and-comers. Great news if you already own; not so good if you're looking to buy. But don't give up yet. New crops of second-home communities are sprouting up around the country, as buyers cast their sights away from pricey traditional resorts and seek out up-and-coming communities that won't deplete their savings.
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