Vacation markets were hit hard in the last housing downturn, and many buyers are now wondering if it's safe to invest in these properties now, particularly as home price growth slows down and supply is rising.
While the credit box is opening, lending standards are still tighter now than they were before the housing crash, making buying less risky. Real estate broker Robyn Erlenbush of ERA Landmark Real Estate tells Realtor.com that half of all properties in Big Sky, Montana's luxury markets have cash buyers, and that home values in the area are rising, though not reclaiming their previous peaks yet.
Home values in resort areas fell roughly 25 percent to 50 percent, depending on the location, estimates Jack McCabe of McCabe Research & Consulting. That's compared with a 17.5 percent drop nationally in home sale prices from 2006 to 2011, according to an analysis of CoreLogic home sales data. Coastal communities in Florida and California were among those hurt the worst, says McCabe, who's based in Deerfield Beach, FL.
"Housing was hit harder than any previous recession, and a substantial share of that was due to vacation homes,'' says Andres Carbacho-Burgos, a senior housing economist at Moody's Analytics.
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