The Hottest Vacation Home Markets
The Wall Street Journal Online
By June Fletcher
Second homes are sizzling. We tell you where -- and why.
A year and a half ago, David Krahn had never been to the Jersey shore -- but he plunked down almost a million dollars to buy a house there anyway.
Why? The Philadelphia utilities analyst had heard home prices along the shore were booming.
So, for $990,000, he and a business partner bought a four-bedroom oceanfront townhouse in Brigantine, N.J., a barrier island about an hour away, to use as a summer getaway and part-time rental.
The townhouse appreciated so quickly -- local brokers say they can easily get $1.5 million for it today -- that Mr. Krahn is about to buy another, bigger place nearby. That house costs $1.875 million, but he hopes it, too, will be a gold mine.
"Sure it's a risk," he says, "but where else can you make this sort of money so fast?"
The phenomenal real-estate boom of the past five years is sweeping through the vacation-home market. Lured by relatively low interest rates and the promise of big resale value, investors and regular vacationers alike are snapping up second homes -- or, in some cases, third or fourth homes. And though rising interest rates could cool things off, the juggernaut shows few signs of stopping for now, even in upscale areas.
With the trend toward shorter mini-vacations rather than two-week breaks, the market is especially strong in slightly faded resort towns that are an easy drive from major cities, such as Sayville, N.Y., and Newport, R.I. Indeed, the entire Jersey shore is popular with buyers, due to its proximity to New York, Philadelphia and Washington, as is the coast between Los Angeles and San Diego.
Hot Towns
Areas with the biggest five-year gains in housing prices through the fourth quarter of 2004 among ZIP Codes with 500 or more vacant seasonal homes (1) and a median price of $350,000 or more.
TOWN/CITY ZIP CODE MEDIAN
PRICE (2) PRICE CHANGE,
5 YEARS
Oceanside, Calif. 92054 $509,000 161.6%
Morro Bay, Calif. 93442 542,000 150.5
Brigantine, N.J. 08203 358,500 149.9
Oxnard, Calif. 930355 580,000 149.2
Paso Robles, Calif. 93446 415,000 148.0
Beach Haven, N.J. 08008 687,500 146.7
Cambria, Calif. 93428 577,500 145.0
La Quinta, Calif. 92253 416,500 143.0
Newport, R.I. 02840 372,000 141.9
Laguna Beach, Calif. 92651 1,450,000 137.8
Sea Isle City, N.J. 08243 699,000 136.0
Pompano Beach, Fla. 33062 355,000 134.9
Dana Point, Calif. 92629 829,000 132.8
Ocean City, N.J. 08226 650,000 132.4
Newport Beach, Calif. 92663 1,667,000 131.8
St. Petersburg, Fla. 33706 405,000 129.5
North Palm Beach, Fla. 33408 360,000 126.6
Malibu, Calif. 90265 1,700,000 126.1
Carmel, Calif. 93923 970,000 125.4
Lavallette, N.J. 08735 557,500 124.8
Pebble Beach, Calif. 93953 1,255,000 122.2
Carlsbad, Calif. 92009 800,500 122.0
Forestville, Calif. 95436 350,000 121.9
Margate City, N.J. 08402 549,000 121.9
Sayville, N.Y. 11782 435,000 117.7
Source: Fiserv CSW
1) Not occupied by an owner as his or her primary residence
2) As of the fourth quarter of 2004
The Wall Street Journal Online
By June Fletcher
Second homes are sizzling. We tell you where -- and why.
A year and a half ago, David Krahn had never been to the Jersey shore -- but he plunked down almost a million dollars to buy a house there anyway.
Why? The Philadelphia utilities analyst had heard home prices along the shore were booming.
So, for $990,000, he and a business partner bought a four-bedroom oceanfront townhouse in Brigantine, N.J., a barrier island about an hour away, to use as a summer getaway and part-time rental.
The townhouse appreciated so quickly -- local brokers say they can easily get $1.5 million for it today -- that Mr. Krahn is about to buy another, bigger place nearby. That house costs $1.875 million, but he hopes it, too, will be a gold mine.
"Sure it's a risk," he says, "but where else can you make this sort of money so fast?"
The phenomenal real-estate boom of the past five years is sweeping through the vacation-home market. Lured by relatively low interest rates and the promise of big resale value, investors and regular vacationers alike are snapping up second homes -- or, in some cases, third or fourth homes. And though rising interest rates could cool things off, the juggernaut shows few signs of stopping for now, even in upscale areas.
With the trend toward shorter mini-vacations rather than two-week breaks, the market is especially strong in slightly faded resort towns that are an easy drive from major cities, such as Sayville, N.Y., and Newport, R.I. Indeed, the entire Jersey shore is popular with buyers, due to its proximity to New York, Philadelphia and Washington, as is the coast between Los Angeles and San Diego.
Hot Towns
Areas with the biggest five-year gains in housing prices through the fourth quarter of 2004 among ZIP Codes with 500 or more vacant seasonal homes (1) and a median price of $350,000 or more.
TOWN/CITY ZIP CODE MEDIAN
PRICE (2) PRICE CHANGE,
5 YEARS
Oceanside, Calif. 92054 $509,000 161.6%
Morro Bay, Calif. 93442 542,000 150.5
Brigantine, N.J. 08203 358,500 149.9
Oxnard, Calif. 930355 580,000 149.2
Paso Robles, Calif. 93446 415,000 148.0
Beach Haven, N.J. 08008 687,500 146.7
Cambria, Calif. 93428 577,500 145.0
La Quinta, Calif. 92253 416,500 143.0
Newport, R.I. 02840 372,000 141.9
Laguna Beach, Calif. 92651 1,450,000 137.8
Sea Isle City, N.J. 08243 699,000 136.0
Pompano Beach, Fla. 33062 355,000 134.9
Dana Point, Calif. 92629 829,000 132.8
Ocean City, N.J. 08226 650,000 132.4
Newport Beach, Calif. 92663 1,667,000 131.8
St. Petersburg, Fla. 33706 405,000 129.5
North Palm Beach, Fla. 33408 360,000 126.6
Malibu, Calif. 90265 1,700,000 126.1
Carmel, Calif. 93923 970,000 125.4
Lavallette, N.J. 08735 557,500 124.8
Pebble Beach, Calif. 93953 1,255,000 122.2
Carlsbad, Calif. 92009 800,500 122.0
Forestville, Calif. 95436 350,000 121.9
Margate City, N.J. 08402 549,000 121.9
Sayville, N.Y. 11782 435,000 117.7
Source: Fiserv CSW
1) Not occupied by an owner as his or her primary residence
2) As of the fourth quarter of 2004
