Although house prices in many regions of the US are still falling, the luxury holiday home sector is proving to be far more resilient. A number of estate agents are reporting that they are receiving far more enquiries than they have had for years.
It certainly looks like a good time to buy provided you intend to invest for the long term, as property which was once out of reach to many is now far more affordable. A three-bedroom home in Vail, Colorado which changed hands for $3.3 million in 2008, was sold in February for just $2.5 million.
Another property on Hilton Head Island, South Carolina previously sold in June 2006 for $1.2 million, was bought for just $750,000 in April this year.
Overall the average price for holiday homes was $150,000 in 2010, which is a reduction of around 25% since 2006, however homes in the multimillion dollar range have fared much better, and this sector is recovering much more quickly.
The recovery of the second homes market hasn't gone unnoticed, as on Palm Beach Island, Florida, sales have increased by 50% to the year ending June 30, while sales in the Hamptons have risen by 59% during the second quarter compared to a year earlier. Sales in Aspen, Colorado have increased by 10% to the year ending May 31.
In spite of these figures being very encouraging, there is no suggestion of a property boom, as the types of properties which are selling well are those located near water or near ski slopes. Properties in less desirable areas are still taking a long time to sell. Another problem is financing, as banks tend to be much warier about second home mortgages, particularly the so-called "jumbo" loans which are more than federally guaranteed limits.
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