You might be able to afford a week in the Hamptons after all.
According to the National Association of Realtors, sales of vacation homes plummeted 31 percent last year in the United States. Sales of investment properties also fell 18 percent in the year.
That trend caused prices of vacation homes in East Hampton to fall 10 percent in the first two months of this year to a median $985,000. Mere chump change compared to the previous median of $1.1 million.
From the Bloomberg story:
Sales dropped to 740,000 from a record 1.07 million in 2006, the Chicago-based Realtors said in a report today. Sales of investment properties, which typically are resold without the buyers ever living in them, fell to 1.35 million from 1.65 million a year earlier.
Even as Baby Boomers, the 76 million Americans born between 1946 and 1964, approach their peak earning years they are holding back on purchasing a vacation home as the U.S. real estate slump enters its third year. About 55 percent of U.S. banks tightened underwriting standards on prime mortgages in 2007’s fourth quarter, according to the Federal Reserve Senior Loan Officer Survey, published in January.
“Some buyers simply adopted a wait-and-see attitude,” Lawrence Yun, the Realtor’s chief economist, said in the report.
The median price of a vacation home was $195,000 in 2007, down 2.5 percent from $200,000 a year earlier, the report said. The price of an investment property was $150,000, unchanged from 2006.
Sales have dropped in the Hamptons, but vacation rentals are still very much in demand, especially with the influx of foriegn tourists whose currency compares favorably to our dollar. Our company has been rather busy with clients who want a fabulous home on the water for their families. This may not be the time to sell, but hanging on to yoru property to rent for the season can be lucrative.