Higher Ground

Some months ago, I told about my sister and brother-in-law, who lived in New Orleans and had evacuated to their second home in Massachusetts. Now, says a story in the New Orleans Times-Picayune, real estate specialists are reporting that people "from throughout the New Orleans area are looking at second homes above sea level in rural Louisiana and Mississippi -- or even farther out of state -- so they'll have a ready refuge if another Katrina strikes." Popular spots: Hattiesburg, St. Francisville and Woodville, Miss., Alexandria, Lafayette, Covington, Hammond, and Picayune, La.

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Bubble Softens Parts of California, Florida

It't tough to generalize about the second home "bubble." In its cover story this week, Barron's quotes Robert Toll, CEO of big homebuilder Toll Brothers, calling the U.S. market "very spotty." In some of the markets where Toll builds golf-course and lake communities, like Palm Springs, Calif., Delaware and southwest Florida, demand has softened. The company, however, has had to offer incentives in only two resort communities out of the 15 it owns. "If you've got the right stuff, people still clamor for it," says the CEO.

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Warning: Buying Investment Property May be Addictive

According to the National Association of Realtors, 35 percent "of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they planned to buy another property within two years, and 17 percent said they planned to purchase five or more additional properties." Even though the air is leaking out of the housing bubble? I wonder. And what happens when interest rates hit 9 % or so?

Southwest Condos: HOT Dakotas: NOT

Hope you've already closed on that Scottsdale getaway you've been eyeing. The strongest gains in condo prices in the first quarter of 2006 were in the Phoenix-Mesa-Scottsdale area, the National Association of Realtors reports. First quarter median price of $179,600 was a soaring 38.0 % from a year ago. Ditto Honolulu, where the median condo price of $309,000, a 34.9 % gain. Don't believe those who feel Florida is all tapped out: in the Miami-Fort Lauderdale-Miami Beach area, the median was $221,500, up 31.4 percent.

Looking for cheaper condos? Try Bismarck, ND ($97,400) or Greensboro-High Point NC ($108,000.)

Categories: Southwest, Scottsdale, Phoenix, Honolulu, Florida, Miami, Ft.Lauderdale, Bismarck, Dakotas, Greensboro, HighPoint, NorthCarolina

Cover Your Assets -- With Insurance

With flood waters cresting in parts of New England, I thought it might be a good time to remind second home owners or shoppers that you need insurance on that vacation cottage every bit as much as you need it on your primary home. The Insurance Information Institute urges potential buyers to check the "availability and cost of homeowners insurance before you commit to the purchase." It makes the obvious point: the "very factors that make a vacation home seem ideal" --whether it's a waterfront property or a mountain cabin -- introduces risks, especially if "the home is likely to be vacant much of the time."

And those flood waters? "Damage to your home or belongings resulting from flood is not covered under standard" policies. But you can buy flood insurance provided by the National Flood Insurance Program (NFIP) though many private agents and brokers. Warning: it ain't cheap.

Categories: NewEngland, insurance

Term "Second-Home" May Be Outdated

Here's a twist: Reflecting on the latest survey of second-home owners, National Association of Realtors President Thomas M. Stevens says "the term 'second home' appears to be something of a misnomer.' The fact that so many owners of vacation homes and investment property have additional properties is a bit of a revelation."

It may be a revelation to some, but in places like Aspen and other posh Colorado mountain communities, it's a fact. Wealthy vacationers now have multiple homes and pied-a-terres, as well as investment property.

Stevens points to "a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate."

Let's see if that keeps up as prices flatten and interest rates climb.

Categories: Aspen, Colorado

More on Minority Vacation-Home Owners

A clarification is in order on the post, below, about minorities owning vacation homes. Walter Molony of the National Association of Realtors tells me that of those people surveyed in the new NAR Profile, 2% were black/African American, 3% Asian/Pacific Islander, 7% Hispanic/Latino, 1% other and 93% white. (The total is more than 100 % because respondents were permitted to select as many races and ethnicities as they felt applicable."

Vermont Beats Metro NY! Or, Bloomberg vs. Bloomberg

How about this tidbit to make Gothamites squirm: "Vermont real estate values are rising faster than in the New York metropolitan area, helped by bargain hunters and increased airline flights to the state. "

Where's that from? None other than Bloomberg News. For those unfamiliar with the name, the gentleman whose company started the news service is mayor of New York City. Of course, once he became mayor, Mr. Mike put his fiscal and editorial control in a blind trust, or wherever one puts editorial control in such cases....

Categories: NewYork, Vermont, NewEngland

We are Shocked, Shocked! By Your Affluence

What? You only have one "second" home? Tsk, tsk. The latest National Association of Realtors survey, released today, shows "an unexpectedly high number of vacation-home owners -- 21 % -- own two or more vacation homes. In addition, 34 percent of vacation-home owners report they own two or more investment properties."

And here are more statistics to knock your socks off: the typical vacation-home owner earned $120,600 last year. A huge 83 % of owners are married couples More than half of investment property owners -- 53 percent -- own two or more investment homes and 12 percent own two or more vacation homes.

Duh. Were you under the impression that those chalets in the mountains, cabins by the lake, or McMansions in the Hamptons were owned by food-stamp users?

Minorities Snatch Up Vacation Homes

You've done it again, baby boomers -- you've made "news" that anyone with half a brain already knew intuitively. The latest National Association of Realtors survey "shows baby boomers continue to dominate the market." But in truth, there is some interesting info in the latest press release. A "growing number of second homes -- more than 1 in 10 -- are owned by minorities," says the NAR. Alas, the NAR doesn't elaborate on which minority groups it is talking about.

NH Sellers Set Sights Lower

It's mud season parts of New Hampshire, but that's not the reason vacation real estate prices are getting a bit squishy. Agents,"rather than seeing a bursting bubble" see it "as a little air being let out of a balloon,"according to the UnionLeader.com . Bristol realtor Alan DeStefano, who is VP of the Lakes Region Board of Realtors, said sellers are coming to a "more realistic" prices. In one case, the asking price of a property that had been listed two years ago after a big jump in value was lowered by a full 10%. What about those rosy projections the past three years of a 36 % hike in values? The site says sellers are thinking more now about 6 %.

Categories: NewHampshire, NewEngland

New Gold Rush in Sierras

California mountain homes in the Central Sierra counties of Tuolumne, Calaveras and Mariposa are luring buyers priced out of other regions, according to the Modesto Bee. It quotes Escape Homes' David Hehman: "Vacation home buyers want beautiful and natural areas, and the Central Sierra is an emerging destination. The attraction there is the natural beauty and affordability." Home prices: $350,000 or more, with many priced above $1 million.

Categories: California,, Sierras

Why Second Homes Deserve Tax Breaks

A columnist for the Hillsboro Argus in Oregon, Dolores Raymond, in the middle of a rant about immigrants, asks: "What makes a taxpayer affluent enough to own a vacation home at the beach, in addition to his primary residence, deserving of a tax credit for a second home? On the other hand, if the second home is provided as the rent free residence for a low income, elderly family member, that's another matter." The answer, I think, is that this nation believes that homeowners take better care of property than renters and wants to foster ownership. What a second home is used for is, indeed, another matter.

Investor Frenzy Could Boost Apartment Rentals

With home prices out of sight (and reach) in many areas, this will be the year that the apartment market surges, says real estate consultant John Burns. Why? Here are factors he cites:

Mortgage Rates - Falling mortgage rates over the last 6 years have created a tremendous boom in for-sale housing.

Lack of Construction - Apartment developers became condo developers because it made more financial sense.

Condo Conversions - Condo conversions also took apartment units out of the market.

Rising Homeownership - With investors renting them so many homes they have bought lately, the nation's rental stock has dwindled.

Burns also thinks fast pace of condo conversions means market could become flooded and those condos will land with a thud in the rental market.