Credit (Escapo @ Flickr)Just as we began our search for a vacation home, the economy went south. One did not need to be a financial analyst to recognize that the economic slowdown was going to be sustained and depress housing values. Indeed, each time we went out, prices in our resort areas of choice were lower. The real estate agents, naturally, insisted that the bottom was here. However, it was obvious that the bottom couldn't even be seen from here.
We made the decision that we would continue to go out and see property several times a year, in order to keep ourselves informed about values and conditions, but we would wait to buy until prices stabilized. Sadly, Big Bear Lake suffered unprecedented numbers of foreclosures during this period. In some areas half of the cabins were empty. This process only accelerated in 2008. Eventually, entire neighborhoods in this beautiful mountain community became ghost towns. We went into several cabins that squatters had devasted. Prices tumbled further and further in Big Bear. Each trip to the town of Big Bear convinced us of two things: the 2+ hour drive was long, and the problems of the area were profound and would have lasting quality-of-life implications. Somewhere around a year ago, we agreed that Wrightwood would become the area in which we would concentrate.
However, Wrightwood had yet to feel the entire brunt of the recession. The obvious decision was to wait for prices to catch up with economic conditions. This soon happened. Cabin prices fell to half of their 2006 values. Fortunately, the Beirut-syndrome which had afflicted Big Bear did not visit itself upon Wrightwood. By June of this year, we knew it was time to get serious about a purchase. This became even more apparent as interest rates reached historic lows.
Economic conditions should dictate any vacation home purchase. These conditions may affect your family's income, down payment, interest rates, or property prices. In the next several years, prices and interest rates will probably begin to rise. For many couples seeking a vacation home, the necessary consequence of waiting may mean higher prices. However, not waiting may mean not having that nest egg topped off to the point you would like. Once again, communicating with your partner and staying informed will go a long way to helping you make the best purchase for your familial circumstance.
We made the decision that we would continue to go out and see property several times a year, in order to keep ourselves informed about values and conditions, but we would wait to buy until prices stabilized. Sadly, Big Bear Lake suffered unprecedented numbers of foreclosures during this period. In some areas half of the cabins were empty. This process only accelerated in 2008. Eventually, entire neighborhoods in this beautiful mountain community became ghost towns. We went into several cabins that squatters had devasted. Prices tumbled further and further in Big Bear. Each trip to the town of Big Bear convinced us of two things: the 2+ hour drive was long, and the problems of the area were profound and would have lasting quality-of-life implications. Somewhere around a year ago, we agreed that Wrightwood would become the area in which we would concentrate.
However, Wrightwood had yet to feel the entire brunt of the recession. The obvious decision was to wait for prices to catch up with economic conditions. This soon happened. Cabin prices fell to half of their 2006 values. Fortunately, the Beirut-syndrome which had afflicted Big Bear did not visit itself upon Wrightwood. By June of this year, we knew it was time to get serious about a purchase. This became even more apparent as interest rates reached historic lows.
Economic conditions should dictate any vacation home purchase. These conditions may affect your family's income, down payment, interest rates, or property prices. In the next several years, prices and interest rates will probably begin to rise. For many couples seeking a vacation home, the necessary consequence of waiting may mean higher prices. However, not waiting may mean not having that nest egg topped off to the point you would like. Once again, communicating with your partner and staying informed will go a long way to helping you make the best purchase for your familial circumstance.
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