Last Updated Apr 26, 2011 4:43 PM EDT
- The good news: Home values are not dropping uniformly across the sector.
- The bad news: You'll need some pretty serious cash to tap into this real estate growth area.
Not much more than a year ago, the price of high-end homes sat an average of 20 percent below a 2007 peak. The situation for vacation homes was even bleaker. But two years into the Great Recession, those with the means have returned to spending on personal comfort and real estate that makes a statement.
Here is Barron's list of the Top 5 Places to Buy a Second Home:
#1 - Sea Island, Georgia
The island made its bones as a destination for the upwardly mobile in 1928, when the Cloister Hotel opened its doors. Sea Island endured as a fabulous resort community for over 70 years before the faltering economy intervened. Now managed by a new group of investors, including billionaire Philip Anschutz, the island is well positioned to reattain its former prominence.
The natural beauty of the area is tough to duplicate, nestled among salt marshes and ocean breezes. Newly minted homeowners gain access to the resort's 65,000-square-foot spa, golf courses and seemingly endless miles of private beaches.
Median home prices are down a million year-to-year, holding steady at $2.3 million. However Barron's does not expect this "bargain" to last much longer.
#2 - Maui, Hawaii
The islands have always been a draw for the rich and famous, but not even paradise was immune to the economic downturn. After two years of decline, sales and home values are climbing back up.
Listed prices for oceanfront homes in the towns of Wailea and Makena currently range from $5.7 million to $22 million. Surrounded by water, sandy beaches and an all-but-perfect climate, new residents may find their money was well spent.
Median home prices are up $200,000 year-over-year, so if you're interested, you may want to speak to a Realtor sooner rather than later.
#3 - Hamptons, New York
The Hamptons are almost synonymous with American notions of wealth, luxury and high society. The summer playground for New York City's elite is the perfect vacation spot for the ambitious looking to rub elbows with Wall Street's finest.
The average listed price for a Hamptons property is up $100,000 versus the same period last year, and industry experts agree that area home values are highly unlikely to decrease. This makes the pricey enclave a steep, but worthwhile investment for those with the means.
#4 - Aspen, Colorado
How would you like to call Victoria and David Beckham, or Goldie Hawn and Kurt Russell your neighbors? However, even by luxury standards, property in the area is a pricey buy. Barron's estimates that you'll need at least $5 million to secure a piece of Red Mountain.
While the overall Aspen market is at a lower price point than its 2008 peak, median home values are up more than a million year over year. The Wall Street Journal recently called Aspen the most expensive city in America.
Discounts, such as they are, are not expected to last long.
#5 - Martha's Vineyard, Massachusetts
Another mainstay for the extravagantly wealthy, President Bill Clinton put the area on the pop cultural map in 1993 while vacationing with his family. Since that time, sales figures and prices have exploded.
Although several miles from the coast, Martha's Vineyard is known for its natural beauty and open spaces, a perfect place to escape the hustle and noise of city life. Average home prices have been virtually flat for the last 12 months, but they are starting to inch upward.
If you had the extra cash, would you purchase a second home in one of these locales?
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.