Vacation Home Sales Soft - Time to Rent One Perhaps?

In a recent LA Times Article we see that although prices for vacation home in California rose over 10% in 2006, sales plummeted. An excerpt:
"Sales of vacation homes sink 37% in '06
By Annette Haddad, Times Staff WriterFebruary 23, 2007


Monica Wilson loves her vacation home, an ocean-view condo within walking distance of the beach in Carlsbad, Calif.She paid $620,000 for the place 13 months ago. But since then, the California vacation-home market has gone soft."If I sold my second home right now, it wouldn't do very well," the Pasadena-based real estate agent said.Sales of second homes in California's top vacation markets dropped 37% in 2006 from the year before, another consequence of the state's overall housing slowdown, according to data released Thursday by real estate research firm DataQuick Information Systems"

Although this is a bad thing for owners who find themselves strapped with escalating ARM's or who were planning on flipping for a quick profit, it's not a bad thing for vacationers. Why not? This means more vacation homes on the short term rental market=more choice for vacationers=better prices or amenities for vacationers.

In just a year's time, many of my fellow vacation rental owners can be heard lamenting the inreased competition on the by owner listing sites like HomeAway, VRBO, and VacationRentals. In addition owners are becoming more creative to stand out on those listing sites. Only a year ago, I was unique in offering "free golf with weekly stay" in Palm Desert, now my neighbors, friends, and competitors are doing the same. This is a good thing for guests as long as they understand they'll still need to pay a "fair" price.

I've seen a new breed of bargain hunters looking for the bottom in vacation prices, but all it takes is a simple math exercise to understand that if the owners or agents go too low in price, they won't last and may be forced to sell or foreclose. After all no one can operate at a loss for long (except the extremely wealthy which you'll find most vacation rental owners are not or they wouldn't rent in the first place).

Now is a good time to be a vacationer! Enjoy your stay.