Are California Vacation Homes a Good Buy Now? You Decide.

California might be a great place to pick up a vacation home right now, declares real estate commentator Broderick Perkins. He notes that the California Association of Realtors reported this fall that the median price of housing in key coastal and tourist areas was way way down -- down "50 percent to nearly 60 percent in the Monterey and Monterey County regions; down 30 to 50 percent in Santa Barbara regions; down more than 42 percent in Palm Springs; down 35 percent in Los Angeles; down 33 percent in San Diego and the Wine Country; down 32 percent in Santa Cruz; and down 29 percent in San Francisco Bay Area." Then he quotes others, such as Christine Karpinski, director of Owner Community for HomeAway.com, as arguing that buyers with cash who can buy and then rent out a vacation home can make it a nice investment. However, these owners should be able to pay the monthly mortgage with enough rental weeks to eke out a profit.

2nd Home Markets: Still Sinking

The latest S&P/Case-Shiller home-price indexes, via the Wall Street Journal: "Las Vegas and Miami were again the weakest markets over the past year, posting 26.8% and 26.7% drops, respectively. Las Vegas and Miami were the weakest markets each of the other months this year. S&P noted that the two markets saw some of the fastest growth in the 2004/2005 periods, with annual growth rates surging above 53% and 32%, respectively.

Also plunging: Phoenix, San Diego, San Francisco, Los Angeles. Pied-a-terre bargain hunters, investors -- time to shop or time to wait for sinkholes to deepen?

High Winds Blow NYC, DC No Good, Sez Expert

Thinking about buying a pied-a-terre in New York City or Washington, DC? Or a second home in Naples, Fla.? Keep your checkbook in your pocket, says real estate consultant John Burns. His "barometer" of housing affordability blows these cities off the charts in terms of bubbledom. "Nine markets have even worse affordability levels than when mortgage rates were 18%+ in the early 1980s: New York, Washington, D.C., Los Angeles, Seattle, Portland (Oregon), Baltimore, Edison (New Jersey), Nassau (Long Island, NY) and Naples," says Burns's latest newsletter.