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Top Tips For Oro Valley Vacation Home Buyers It''s a great time to buy your dream vacation home--that retreat by the sea or in the woods where you one day might retire. Mortgage rates are low, prices are down and boomers will resume shopping for retirement retreats soon.
But, it''s also a terrible time to buy. Shorelines are disappearing, and tax-hungry locals are putting the squeeze on second-home owners. Worse, prices in certain overbuilt Sunbelt areas, such as Phoenix-Mesa-Scottsdale and parts of Florida, are expected to fall another 20% or more and won''t begin to recover until 2011, Moody''s Economy.com predicts.
Then there are foreclosures. Fort Myers, Fla., has one of the highest rates in the country. Prices have plunged 31% from their 2006 peak in this balmy corner of the Gulf Coast, which includes Naples and Coral Beach.
This sort of drop has brought a slew of problems. A quarter of the houses now on the market there are short sales--where, for example, a home is listed for $250,000 but the seller owes $300,000--says Connie Gustafson, an agent with Prudential Florida WCI Realty. Buyers may be getting a bargain, but short sales are notoriously difficult to close. Lenders are holding up transactions, sometimes for months, rather than committing to taking a loss on the loan.
"We can''t get a solid number out of them until we get an offer," she says of cautious lenders. With 14,600 existing homes for sale in Fort Myers, and thousands of half-finished condos, Moody''s Economy.com believes prices will continue falling for another two years.
Contrast that with Napa, Calif. Prices in wine country are back to 2004 levels. Foreclosures in the newer exurbs of San Francisco mean you can buy a house for less than $500,000--something almost unheard of a few years ago.
If you want to live close to Napa''s legendary vineyards and within driving distance to San Francisco, half a million won''t buy you much, but you will be buying something unique: Land-use restrictions prevented the kind of rampant overbuilding plaguing Florida, Nevada, Arizona and Southern California and that will support a recovery in Napa.
But whether Napa is a bargain depends on your budget; most second-home buyers in wine country are looking at small vineyards, gated golf-course communities or historic homes in Napa city where prices are well over a million.
If Napa is too pricey, your money will go further just about anywhere else in the country. Charlevoix, Mich., on the shores of Lake Michigan, has beautiful weather in the summer, lots of snow in the winter (120 inches last year) and water everywhere.
One California couple recently sold their vacation home in Lake Tahoe, Calif., for $670,000 and traded down to a four-bedroom vacation house in the country club district of Charlevoix for $350,000, says Loren Musilek, a realtor for Prudential in Charlevoix. The century-old lakeside resort is a favorite getaway for residents of Detroit and Chicago. But economic wreckage in Southeast Michigan has dried up demand, says Musilek, and that could continue to weigh on prices. A foot of lake frontage fetched $7,000 two years ago; now, the price is closer to $5,000.
Many bargain hunters go straight to the most bottomed-out markets. But some of the best values aren''t necessarily where destruction has been the greatest.
How is the weak housing market affecting your community? Weigh in. Post your thoughts in the readers comment section below.
The property boom and the bust that followed have hardly touched Spicewood, Texas, a suburb of Austin. Prices have been rising steadily for the last five years, says Lynn Robin-Pitts, a realtor for Coldwell Banker Previews.
"People from out of town don''t believe me until I show them the numbers," she says.
She has seen a lot of incredulous buyers from California, but many second-home buyers come from vibrant cities closer to Spicewood, such as Austin or Houston, looking for acreage in the wide-open hill country. Prices in the Austin area will be flat this year and next, predicts Moody''s Economy.com. But William H. Frey, a senior fellow at Brookings Institution, expects Austin, now with one of the youngest populations in the country, to be a mecca for active boomers.
If you''re ready to look for a lake cottage or mountain retreat, here are a few things your realtor won’t tell you: Buy for the long haul and stick to stable markets.
Send me your comments to iandwight@orovalleyrealestate.com |
