Housing Market Slump Effects Second Home Purchases

Author:	Lucas Jones
Source:	Homes Discovered
Date:	August 22, 2006

The housing market is is getting weaker by the day and condos, second homes, and vacation homes are the hardest hit sectors.  Not only are the more expensive vacation homes values falling but even converted condominiums are losing value from California to Florida to the Jersey Shore.  The second home market tends to be an overinflated representation of the overall home market and does not accurately represent the primary home market.  The second home market is not driven by demographic changes and shifts such as employment opportunities (or lack thereof) and migration trends like the primary housing market is. In the second home market, sales are down and quantity is up.  Prices are weakening.  Many areas of Richmond that are primarily vacation and tourist destinations are the hardest hit.  Much of the problem is due to over construction brought when the market was booming and investors were snatching up real estate.  Things have changed now as investors are retreating and the inventory has skyrocketed.  Many prospective buyers are too timid to buy due to a sluggish economy, rising interest rates, and increasing energy costs.  Many areas actually price themselves out of the market.

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