In Professor Robert Shiller’s article for Project Syndicate called Home Sweet Home he discusses the changing attitudes for vacation properties. The surging demand has made their cost rival primary homes and gain market share. Their cost may outpace GDP in many countries. This is a global phenomenon.
A study by the National Association of Realtors (NAR) indicates that 13% of all homes purchased in the United States in 2004 were vacation homes. This does not include buyers who purchased homes as investment properties, mostly to rent out. According to the NAR, investment buyers account for another 23% of home sales, bringing second-home purchases to 36% of the total.
He observes that to many, it has become the true meaning of life, to the haves and not on the radar for the have nots. The rising prices will eventually knock many out of the market but that this would spur development of higher density of vacation properties. Therefore the options for quiet vacations spots will evaporate for many.
He concludes, quitely gloomily
“But, for many of those who imagine relaxing in a place that offers a quaint life of undisturbed beauty, there is a strong risk that prices will rise out of reach in future decades. No economic strategy can change that, even if it produces spectacular GDP growth.”