The second home market slipped last year, but not so much that second home buyers should be alarmed.  Main Street remains a better investment than Wall Street.
Even as the National Association of Realtors was reporting the 359,000 single-family second-home sales in 2001 represented a nearly 5 percent drop from the record 377,000 sales in 1999, the median price of a second homes was up 26.8 percent during the same period.
Meanwhile, since the dot com meltdown that began more than a year ago, stock market investors continue to take a beating as the DOW can't seem to hang onto 10,000 and Nasdaq languishes around 1500.
On the other hand, ssk any investor who purchased and held onto both a home and stocks a few years ago which investment has carried them through
unemployment or other hard times.
"Make no mistake, the second home market is extremely hot and will be for some time to come," said NAR president Martin Edwards Jr.
Edwards said the typical second home now costs more than a primary residence in many locales as the median has risen from $127,800 in 1999 to $162,000 last year.
The recent second home sales let down followed a recessionary economy which curtailed discretionary spending for many big-ticket items.  The slowdown
followed a second home boom spawned by favorable personal income tax law changes, a growing number of baby boomers reaching retirement age and the longest economic expansion on record, driven largely by the technology sector. Many buyers gained admittance to the second home market with equity gained ducats from their first homes.
As the economy gains steam again, a second home purchase is a natural
investment for a nation wary of terrorism alerts and stock market doldrums as buyers look for a secure home away from it all.
"Most people end up living and retiring in their second home, which makes it a great value because if they end up selling their primary residence, the value (of the first home) typically exceeds the cost of the second home and they can pay off the second home and live off any extra money," said Ken Brunt vice
president of Orinda, CA-based EscapeHomes.com, the Web's leading portal for second, vacation and resort homes as well as time shares and similar
investments.
Current market conditions of reduced demand, but low mortgage rates make it a relatively good time to buy -- for now.  Limited inventories in all housing
sectors will likely drive up prices as second home buyers return to market with the strengthening economy.
"Nationally, we've had tight housing inventories generally.  Professionals
specializing in recreational property say there aren't enough vacation homes to meet demand in many areas, causing prices to rise sharply," said David Lereah, NAR's chief economist.
"The availability of vacation homes is reported to be especially tight in coastal markets," he added.
The survey doesn't provide a geographic breakdown, but anecdotal reports from recreational property sales people say oceanfront property in the
mid-Atlantic region doubled in value between 1997 and 2001.
"The strong second-home price increase over the last two years reflects
exceptionally strong demand in the more desirable locations," Edwards said.
That's not true everywhere.
"There are still a number of undiscovered vacation destinations where the
housing prices are a steal.  EscapeHomes has some of these towns listed," says Clark Thompson, CEO of EscapeHomes.com.
To get the most bang for you buck in a second home, there are some specific considerations.  That includes not forgetting that you likely aren't in it just for the money.  A second home is also a lifestyle choice.  Choose one based on your personal desires, for starters.