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Sales of vacation homes dropped 31 percent last year

Sales of condos at upscale properties 
like Mandalay Beach Club in Clearwater, above, are 
suffering from a sharp downturn in the vacation home market.

Sales of condos at upscale properties like Mandalay Beach Club in Clearwater, above, are suffering from a sharp downturn in the vacation home market.

It's a no-brainer among property owners confronting the relatively bleak home sales and prices in places like St. Pete Beach and Clearwater.

Now the National Association of Realtors has confirmed what everyone knew in their gut. In a recently published survey, the association said sales of vacation homes have declined at triple the rate of first-home sales.

Sales of vacation homes plunged 31 percent in 2007, from a record 1.07-million in 2006 to 740,000 in 2007.

By comparison, sales of first — or primary — homes dropped 10 percent. Investment home sales fell 18 percent.

"Certainly, second homes are discretionary purchases, and there is a natural tendency to pull back from big-ticket items in periods of uncertainty," NAR economist Lawrence Yun said.

Florida's complex property tax rules that punish second homes and out-of-state buyers aren't helping things, Realtors say.

Add the cost of coastal hurricane insurance, mix in market turmoil from the higher-than-normal foreclosures, and you've created a lot of hesitant buyers.

"They think they'll pick it up at rock bottom prices," said Martha Thorn, a top Clearwater Realtor with Coldwell Banker. "These people can afford to wait."

The sales slowdown is palpable at upscale Clearwater condo buildings popular with vacation home buyers. Think Mandalay Beach Club, Belle Harbor or Sandpearl Resort.

Even if the developer did well initially selling the condos, the resale rate has been sluggish. The biggest problem: homeowners sticking to high asking prices the market no longer supports.

Nevertheless, vacation and investment homes make up

33 percent of home sales nationally, though less expensive condos grab a bigger share of the market.

Fifty-nine percent of vacation homes bought in 2007 were detached single-family homes, 29 percent were condos and

7 percent were townhomes or row houses.

In 2006, single-family homes accounted for 67 percent of vacation-home sales, while condos were 21 percent.

The median price of a vacation home was $195,000 in 2007, down 2.5 percent from $200,000 in 2006.

To revive their fortunes, Realtors are counting on a surge in baby boomer retirements to boost the second-home market. The leading edge of that demographic, those born in 1946, is taking early retirement this year.

The typical vacation-home buyer last year was 46, earned $99,100 and bought property 287 miles from his home, the association said.

"A peak of population is moving through the prime years for buying recreational property," Yun said.

Sales of vacation homes dropped 31 percent last year 04/06/08 [Last modified: Monday, April 7, 2008 6:31pm]
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