Have you ever daydreamed about having a home at the mountain or the beach? I’ve got key news for you.
All through the last 4 years of the real estate bust, I’ve been talking like a broken record about how the greatest opportunity for deals is at the mountains, the beach, the lake and resorts in any true second home community.
When push comes to shove and the market falls apart, people tend to hold onto their primary home and let their vacation home go into foreclosure. I’ve personally benefitted from a foreclosure in a second home mountain community. A lot of people have griped that I’m taking advantage of another’s misfortune. I’ve never understood that; the home was already in foreclosure, it’s not like I caused it. I was just there to take advantage of the opportunity.
It seems that only in the last year have people seized the day as I’ve suggested. I read a recent story in The Wall Street Journal about how second home communities are seeing sales rise by 40-50%. I guess banks are now seeing reality and selling their REOs (real estate owned) at great prices. So you have a situation where sales are up while the average selling price is way down.
I used to be a property owner in Park City, Utah and still get newsletters from real estate agents back there. What I was reading in those newsletters corroborated what The Wall Street Journal is saying.
Under normal circumstances, prices usually rise as demand rises. But that’s not been the case in the second home community. We’re at a capitulation point where owners are realizing what their second homes are really worth and are becoming more realistic in pricing. Once that happens, the buyers materialize.
Now, it’s not like tomorrow all the opportunity for those who want a second home will end. But the big overhang of supply is going to whittle down over time. I think we’re still in a sweet spot through 2011 (and maybe into 2012) to get a great deal on the second home of your dreams.