New York City has weathered the national real estate downturn better than most American cities, but how have New Yorkers’ favorite vacation destinations stacked up?
This month, for The Real Deal’s special supplement, we look at the second-home markets in destinations where New Yorkers have traditionally flocked for their holidays, to relax with a book on the beach or to hit the ski slopes.
Broadly speaking, today’s credit crunch is spilling over into the second home market. But within that market, it is homes priced at the mid-level, not the ultra-expensive, that are feeling the pinch. Experts say that prices are dropping faster for mid-level second homes than for primary homes. (See Credit crunch takes bite of vacation houses.)
A year ago, residential markets were beginning to cool, but historically, low mortgage rates and strong demands from aging baby boomers seemed to stabilize prices for vacation homes. According to real estate professionals, that has now changed.
Hardest hit is Florida, the most popular second-home market in the nation. Roughly 15 percent of real estate transactions in the Sunshine State involve foreign buyers. The areas popular with international investors are faring better, but the overall market is still sluggish. (See Paradise tries to dig out of rut.)
Meanwhile, off-shore, vacation properties in Mexico and the Caribbean are booming. In Mexico, the surge stems from changes in banking laws that finally allow foreigners to buy via mortgages. (See The mortgage comes to Mexico.) And in the Caribbean, the most elusive of all purchases, a private island, offers another temping option. (See Needing their own private islands.)
Closer to home, the market is more fickle. Resorts and vacation home destinations in Vermont, for example, are testing new strategies to lure weekenders by adding more off-season attractions like golf courses, performance centers, spas and day care facilities. (See Drawing tourists after snow melts.)
Our supplement also looks at the status of the markets for New York City’s closest escape destinations. What we found is that the highest end of the market in the Hamptons remains strong. (See High-end Hamptons defies slowdown.) And many young professionals are turning to the Catskills, traditionally a weekend getaway, for year-round residences because the cost of buying an apartment or home in the city has become so expensive. (See Priced-out New Yorkers look north.)
Finally, we looked at the rise of the Cape Cod community of Provincetown as a destination for gay couples looking to buy vacation homes. The legalization of same-sex marriage in Massachusetts has helped to further establish it as an epicenter for gay homebuyers. (See Provincetown grows prouder.)