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I’ve wondered whether the foreclosure wave would eventually lap up onto the vacation/second home market. I’ve heard anecdotally from real estate agents are how some clients were buying second homes using option ARMs, or interest-only loans. They were betting that either their income would rise by the time the monthly payments rose, or they’d be able to flip it for a profit. But as much as I’ve followed the housing bubble, I’ve never seen much hard evidence of beachfront/lakefront/mountain communities suffering from foreclosures—until now.
A Philadelphia TV station ran this story noting that foreclosures on the Jersey shore are up 110% over last year (though doesn’t provide hard numbers).
I’d love for some real-estate professionals to weigh in here with their take on the second-home market—specifically, how sound are all those mortgages underpinning these properties.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.