Vacation home bargains

Andrew Leckey

July 09, 1991|By Andrew Leckey | Andrew Leckey,Tribune Media Services, Inc.

Americans on holiday, often out of pure curiosity, will leisurely browse local newspapers and local real estate offices for vacation home values.

What's different about the summer of 1991 is that they're actually finding deals.

The once-booming second-home market, especially in the Northeast, is down in the dumps due to the lingering effects of recession. Many a home bought as an investment by a buyer several years ago has turned out to be an albatross.

The inventory of vacation homes -- condominiums in particular -- is high. In many parts of the country, it's a buyer's market.

"The Cape Cod area has experienced a 20 percent across-the-board decline in the value of vacation property," said Barbara LaFleur, a real estate broker with Rene L. Poyant Inc. in Hyannis, Mass. "Three years ago the average two-bedroom vacation home sold for $125,000, but today you could have that same house for $105,000."

Both renters and buyers are reaping rewards.

"Anyone who wants to rent a vacation property in 1991 is going to get a much better deal than in past years, and, if you want to buy a property, opportunities are excellent," said Stephen Roulac, managing partner with San Francisco's Roulac consulting group of Deloitte Touche.

Vacation home values can also be found in Florida, the Southeast coast, Arizona and Colorado. The real estate industry is counting on maturing baby boomers to buy second homes, though no one can be sure this will happen because many are financially strapped.

People who do have money to buy now are setting long-term strategies.

"I recently purchased a home for the purpose of my children and I having a vacation place, but, eventually, it will become my primary home," said Joseph Spataro of Chicago, who recently bought a home in Clearwater, Fla. "We found this a good time to be buyers."

Maintain a cool head, even if it is a buyer's market.

"There's a tendency for people to become moonstruck by a resort area and not think realistically about whether they'd go back there year after year," said Steven Miner, research director for the Ragatz Associates research firm in Eugene, Ore. "Sometimes, people find out that what they thought was a bargain isn't, with either the project having problems or their site not turning out to be optimum."

"Average prices of two-bedroom condominiums have risen to $124,000 from $104,000 in the past three years, although there are still a lot of $75,000 condos in our area," said Ken Slack, president of Coldwell Banker, McFadden & Sprowls in Naples, Fla.

Similarly, condominium prices have risen to $101,000 from $80,000 in the popular Sunriver resort in central Oregon, according to Larry Jacobs, a real estate agent with Duke Warner Realty in Bend, Ore. Single-family homes have increased to $169,000 from $100,000.

The prospective vacation homebuyer should:

* Decide on location and visit comparable properties in the area to study pricing and amenities. Have developers overbuilt?

* Consider how you'll travel to the home once you buy it, taking into account changeability of air fares and the length of travel time.

* Decide whether you wish to rent it out. Seek information not only on how much income you might receive, but substantiation of rental activity from past years.

In this unsure market, keep in mind that you may have to keep the home long-term. Be conservative about price appreciation hopes.

Realize real estate auctions have become common, particularly in slow-selling resorts. Inspect beforehand, be flexible in which unit you're willing to buy and examine the sales contract before signing.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.