Wealthy Buyers Fuel Market For Second Homes

Source: The New York Times | November 8, 2011

 The combination of low prices for vacation properties, the volatility in the stock and bond markets and the American love of property is proving too tempting for people seeking second homes in desirable locales. Sales in Miami were up 34.1 percent in September from the same month last year, according to the National Association of Realtors. Sales in other hard-hit areas also rose. Atlanta was up 24.7 percent and Phoenix was up 25.3 percent in September. “There’s a certain confidence in parking their cash here right now, as opposed to leaving it in the stock market or whatever country they’re from,” said Allison Turk, of EWM Realtors. Their hope is for a 2 or 3 percent return on the properties today that will grow to an 8 or 10 percent return in five to 10 years. Buyers believe that vacation homes in crucial markets are priced at the bottom, while investors from abroad see these areas as safe harbors that could drive up their returns. And so the real estate cycle begins again. [Read this article]