Credit crunch takes bite of vacation houses

The vacation home market in the United States appears to be divided into two areas – traditional and unstoppable. In many traditional vacation home regions, the credit crunch and the subprime mortgage collapse that have damaged real estate values across the country are also sabotaging the second-home market. But luxury homes – which are sometimes third or fourth homes – appear to be holding up well. “Prices are coming down even more on second homes than primary homes, unless you’re in an affluent area like the Hamptons or Nantucket,” said Alan Rosenbaum, president of New York City-based mortgage firm GuardHill Financial Corp. Weakness in most second home markets had become evident more than a year ago in a 2006 survey of buyers conducted by the National Association of Realtors (NAR).