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.