Despite the threat of rising interest rates, the second-home market remains strong, according to a recent study by EscapeHomes.com, an online marketplace for vacation-housing real estate. The median year-over-year price for homes in the Web site's price index was up 22 percent in the first half of 2004.
That price index includes these markets: Bend, Ore.; Holden Beach, N.C.; Incline Village, Nev.; Myrtle Beach, S.C.; Naples, Fla.; Park City, Utah; Santa Barbara, Calif.; Sarasota, Fla.; St. Helena, Calif.; and Truckee, Calif. The index reflects single-family home prices.
"We continue to see strong price appreciation and high consumer demand in our index markets for several reasons," says David Hehman, CEO of EscapeHomes.com. "First, the large base of baby boomers entering their retirement years is putting pressure on these markets. Second, the top vacation and retirement markets are limited in choice homes. And finally, people are choosing real estate to diversify their portfolios, especially since interest rates are still at historic lows."