National Association of Realtors Cheerleader Suffers from Burst Bubble Too

David Lereah feels your pain. Today's front page of the Wall Street Journal carries an article about the former chief economist for the National Association of Realtors who is working from home in Virginia these days, trying to pay mortgages on his personal residence and several investment properties with a newsletter he publishes costing $495 a year. He says he has 50 paying subscribers so far. Lereah was quoted here often about the rosy growth in second home investment values before the bubble burst.

Second Home Slump? Not in NYC

While formerly hot second home markets like Miami Beach, Las Vegas and Fort Myers slump, New York City, especially Manhattan, soars. Example: A Time Warner Center 3,000+square foot 65-floor condo, sold by Ricky Martin last year for $9.75 million, is for sale again for almost double: $18.9 million, according to the Wall Street Journal. Pop star paid about $6.8 in 2004 for 7-room pied-a-tierre in the sky.

Vermont Vacation Club Bites Dust For Now

The Haystack Club, a private corporation that bought a 400-acre property for $5 million from Mount Snow, VT in 2005, has folded, at least temporarily . There just aren't the number of tourists visiting because of the unseasonably warm weather, David Dillon, president, told the Brattleboro Reformer. "That means fewer people from Boston and New York with a lot of money to join the exclusive resort are here to take tours and look over plans for luxury mountainside homes and condominiums, the paper reported.

Tax Breaks for the Under $100K Owner

Do you know all the tax breaks open to a second-home owner? Real estate writer Bob Bruss points out that" if you materially participate in managing your second-home rental and if your 2006 adjusted gross income is $100,000 or less, then you can deduct up to $25,000 of second-home tax loss from your other ordinary taxable income." So what's "material participation?" It includes setting standards for tenants, establishing the rent and approving tenants, even if the day-to-day management is left to others.

Slower Market? Buy! Says Expert

"Because houses aren't flying off the shelf, there's less pressure on you to make a quick decision" about that second home you've always wanted. "You can afford to take your time, do your research, and refine your plan," says Christine Karpinski, director of Owner Community for HomeAway.com and author of two books on the subject, including Profit from Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment. In addition, "when your monthly mortgage payment is less than or equal to one peak week rental, twelve weeks of rental will cover your mortgage payments for the entire year," she says.

Like Pizza, Slice of Vacation Home Better Than None

Once upon a time, even the most mid-level middle-income folks could afford a getaway shack, cottage or cabin on a lake, by the seashore or near the mountains. The place I owned in Snowmass Village in the 1980s cost us only $100,000 for a 2-bedroom condo at one of the nation's great ski resorts. Now, the same kind of money will get you only a few weeks -- a timeshare, or fractional ownership, as the sales crowd likes to call it.

There were 188 "fractional interest" projects in the U.S. in 2005 with $2-billion in sales, a 28 percent jump over 2004, according to NorthCourse.com, a research firm that keeps tabs on the market. A newspaper article recently spotlighted a California family that paid $56,000 for the use of a two-bedroom, furnished home in the Old Greenwood development (photo above) at Truckee, near Lake Tahoe, for at least 21 days a year. With their purchase of a slice of the house comes membership in the Tahoe Mountain Club, which includes access to private restaurants and recreational and spa facilities. And of course owners can take a tax deduction on the mortgage interest.

Buying With Friends? Put it in Writing

For more than a decade I owned a vacation condo in Colorado with a friend. When it came time to sell, we agreed that our "business" arrangement worked better than our marriages had! One reason: we had a written agreement as co-owners. This New York Times article points out the plusses & minuses of owning "as a team."

Still Going Up: NC, Texas, Montana

Smile if you are selling a vacation home in North Carolina. The National Association of Realtors reports that's where the biggest total sales increase was for the third quarter. Existing-home sales rose 9.7 percent compared with the third quarter of 2005. In Texas the third-quarter resale pace rose 8.6 percent from a year earlier, while Montana experienced the third strongest gain, up 6.4 percent.

'Wealth Gap' Hits Florida West Coast

Naples, Florida is typical of second-home communities suffering from the "wealth gap." Says an article in USA Today, "investors and vacation-home buyers helped drive up the median home price to $446,900, second-highest in Florida after the Keys." Prices are dropping but not enough for people who work in the region. More than 80% of the workforce is employed in the four lowest-paying industries: construction, retail, agriculture and services (pool cleaners, for instance, and golf instructors). Median income for a family of four: $66,100. That would qualify you for only about a $350,000 house, nearly $100,000 below the median.

Portofino: First Two-Tiered Destinations Club

The universe of ultra-luxe "destination clubs" changed today as two clubs -- Portofino and Signature -- merged. According to a press release, the newly named "Portofino Destinations Club" will be the first residence club with two tiers and will "provide its members access to high-end homes all over the world: the U.S., Mexico, Canada, Italy, France and the United Kingdom."

Membership for the Portofino properties cost as much as $250,000, plus annual membership dues of up to $19,800. Signature membership costs as much as $150,000, with dues of up to $11,500. Each has a core of members in a particular region: Signature is based in Colorado while Portofino's focus is the Pacific northwest.

Vacation Home Slowdown? Not in Aspen

The bubble may be deflating elsewhere, but it's still aloft in Aspen, where the Residences at The Little Nell have set a new records for fractional purchases, According to a press release. The owners say 4-bedroom units are now going for around $2.5 million, while 3-BRs now sell for $1.475 million. That's for a 1/8 share, which guarantees 4 weeks of use, two in winter prime season and two in summer prime. Owners also may reserve two additional weeks on a first-come-first-serve basis, and may extend their stays on a space-available basis.

Got some loose change you need to spend? Visit RLN's Web site and shop for your very own unit. Don't book your flights just yet, though; the condos are still under construction adn the owners hope they'll be done in time for the 2007-2008 ski season.

Dissed By Your Home Insurance Company?

That's the way some folks in southwest Florida feel. Citizens Insurance Company has sent out thousands of letters to policy holders with coastal property demanding that they prove their home is their primary residence.

It's because of a change in the law, says an article in news-press.com of Fort Myers. The background:

"In the spring, the Legislature passed new laws that treat second-home owners different from Citizens policyholders who insure their primary residences through the state-run insurer of last resort.

"Starting with new policies and renewal notices that go out after March 1, owners of vacation homes, rentals and other non-homestead property will be kicked out of Citizens and forced to try to buy their insurance again on the private market."

IRA Can be Individual Retirement Abode

Anyone seeking a second home might consider buying it as an IRA -- Individual Retirement Abode. One company, Sum Total Financial Management of Chicago, says you can buy a place “outside” of an IRA while using funds from an IRA to pay for it. "This program complies with all legislative and IRA/Tax laws," the company declares. (When property is purchased “inside” the IRA it cannot be enjoyed or occupied by the investor.) Some details at at the firm's Web site.

Economy.com Forecasts Major Florida Price Plunges

For those who own vacation homes or investment property in Cape Coral, Sarasota and Naples, Florida, fasten your seat belts -- you're in for a bumpy ride. Moody's economy.com projects more than an 18 percent decline in prices by February in Cape Coral, 14 percent in Sarasota by March and almost 13 percent in Naples by March. Note: numbers based on media existing home prices.

More Park City News: Leaf-peep With Stein

Count on rental income? Some managing companies are better than others in promoting "off-season" packages. Example: Stein Eriksen Lodge in Deer Valley, Park City's high-end neighborhood.

From Oct.15 through Nov. 21, the ski legend's lodge (which includes many condos) offers a "Fall getaway" where guests "enjoy unsurpassed luxury and brilliant foliage," according to a press Release. One-BR suite + 3-course dinner= $99/per person. That kind of rate can boost owners' bottom line during traditionally slow times of year.

Perk for Park City Second-Home Skiers

Maybe you own own a vacation home, condo or timeshare in Park City, Utah. If so, maybe you're so wealthy you don't care about freebies. But thanks to a promotion offered by the town's three ski resorts, you can convert your airline boarding pass into a same-day lift ticket to The Canyons, Park City Mountain Resort or Deer Valley Resort. You must bring the completed, required redemption voucher, along with same-day boarding pass and out of state photo I.D., to the resort ticket window. Since an adult ticket will cost $77 at Deer Valley (the others have not yet announced daily ticket prices) that's a perk that should not be ignored.

Another 9-Figure Sale Price

First there was Prince Bandar's house in Aspen for $135-million. Then there was Donald Trump's little getaway in Palm Beach for $125-million. Now comes word of a third unbelievably pricey "vacation" home for sale -- Tommy Hilfiger's "Tranquility" on the Nevada side of Lake Tahoe, on the market for $100-million. A publicist for the broker, Shari Chase of Chase International, says the amenities include a cigar lounge (that's a first for me -- anyone ever hear of a cigar lounge in a private house?) and 210 "secluded" acres. The estate's main residence is 20,000 square feet. Want a peek? Call Shari at 775 588-6130.

Bias in Second Home Sales?

The Wall Street Journal recently ran a disturbing article about minority second-home buyers who were either blackballed or otherwise discriminated against when they tried to buy a vacation home. Where? In "Palm Beach County, Fla., there were 144 race-based housing complaints made to the local chapter of the nonprofit National Fair Housing Alliance in 2005, a 30 percent increase over the previous year, with many of them being filed by first-time second-home buyers. Bias claims are also up in Naples, Fla., and San Diego County, according to data from the U.S. Department of Housing and Urban Development." The article included a tale of an African-American doctor who had a deal on a house in Sedona, AZ that was suddenly cancelled. Do you know of a bias case? Let me know.

Glut by the Seashore

A Maryland man has not only dropped the price for his weekend condo but has added two WaveRunners and a pier into a package deal to anyone who will take the place off his hands. It's typical, says a Baltimore Sun article, of what's happening in Western Maryland resort areas -- a glut of condos and townhouses flooding the market.


At Ocean City and at Western Maryland's Deep Creek Lake, "the market is cooling as inventory has climbed and properties sit on the market longer. Nationally, the market for condos slowed significantly during the first half of the year, with more for sale now than at any time since the early 1990s, according to statistics from Moody's Economy.com."

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.