It's a great time to buy your dream vacation home--that retreat by the sea or in the woods where you one day might retire. Mortgage rates are low, prices are down and boomers will resume shopping for retirement retreats soon.
But, only in certain areas like the Pikes Peak Area of Colorado. Prices in certain overbuilt Sunbelt areas, such as Phoenix-Mesa-Scottsdale and parts of Florida, are expected to fall another 20% or more and won't begin to recover until 2011, Moody's Economy.com predicts.
Then there are foreclosures. Fort Myers, Fla., has one of the highest rates in the country. Prices have plunged 31% from their 2006 peak in this balmy corner of the Gulf Coast, which includes Naples and Coral Beach.
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This sort of drop has brought a slew of problems. A quarter of the houses now on the market there are short sales--where, for example, a home is listed for $250,000 but the seller owes $300,000--says Connie Gustafson, an agent with Prudential Florida WCI Realty. Buyers may be getting a bargain, but short sales are notoriously difficult to close. Lenders are holding up transactions, sometimes for months, rather than committing to taking a loss on the loan.
"We can't get a solid number out of them until we get an offer," she says of cautious lenders. With 14,600 existing homes for sale in Fort Myers, and thousands of half-finished condos, Moody's Economy.com believes prices will continue falling for another two years.
Sunnier Skies
Contrast that with Napa, Calif. Prices in wine country are back to 2004 levels. Foreclosures in the newer exurbs of San Francisco mean you can buy a house for less than $500,000--something almost unheard of a few years ago.
If you want to live close to Napa's legendary vineyards and within driving distance to San Francisco, half a million won't buy you much, but you will be buying something unique: Land-use restrictions prevented the kind of rampant overbuilding plaguing Florida, Nevada, Arizona and Southern California and that will support a recovery in Napa.
But whether Napa is a bargain depends on your budget; most second-home buyers in wine country are looking at small vineyards, gated golf-course communities or historic homes in Napa city where prices are well over a million.
If Napa is too pricey, your money will go further just about anywhere else in the country. Woodland Park, Co., around the corner of Pikes Peak, has beautiful weather in the summer, any pretty mild snow fall in the winter (120 inches last year) and mountain views everywhere.
One California couple recently sold their vacation home in Lake Tahoe, Calif., for $670,000 and traded down to a four-bedroom vacation house in the Pikes Peak Area of Colorado for $250,000, says Brian Lloyd, a local Realtor in Colorado. The Mountainus area is a favorite getaway for residents and vacationors alike.
Many bargain hunters go straight to the most bottomed-out markets. But some of the best values aren't necessarily where destruction has been the greatest.
How is the weak housing market affecting your community? Weigh in. Post your thoughts in the readers comment section below.
If you're ready to look for a year round cottage or mountain retreat in the Pikes Peak Area of Colorado contact me today and let's get you in while the gettings good.
Brian Lloyd 719-243-4057
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