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Back to the Beach - The Hangover in Vacation Homes

The reality is that once the demand cycle gets into gear, prices will eventually begin to escalate.

By Tony LoPinto | Updated on January 11, 2011

Back to the Beach – The Hangover in Vacation Homes The front page of yesterday’s Wall Street Journal reported that there has been a steep increase in the sale of vacation homes, with sales volumes, for example in Palm Beach, FL experiencing a rise in activity that brings it on par with the 2007 peak. Markets like Hilton Head, SC; Mercer Island, WA; and Cape Cod, MA are all realizing significant gains in sales volume. The catch is that prices haven’t budged. But the reality is that once the demand cycle gets into gear, prices will eventually begin to escalate. With the beginnings of a recovery in the second home market, there is hope for the homebuilding business in the Sunbelt, although only after the inventory gets cleaned up, which still may take two or three years. More sunscreen please.

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