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http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-06-05T095953Z_01_N01347201_RTRIDST_0_ECONOMY-HOUSING-LUXURY.XMLNEW YORK, June 5 (Reuters) - U.S. mortgage rates are at four-year peaks and climbing, cooling a torrid housing market from five years of record sales, but high-end households are still pumping money into second homes with cash to spare for amenities and travel, according to Coldwell Banker.
More than a third of owners of houses valued over $1 million in states other than California -- where the cutoff is $2 million -- own second homes, according to the 2006 Coldwell Banker Previews International Luxury Survey. Another 35 percent are considering buying one.
"This market is hot because 43 percent of these people make over $500,000, and 70 percent of these people said that interest rates had no bearing on their purchases and no bearing on some of the leisure things they do," said Jim Gillespie, chief executive of Coldwell Banker Real Estate Corp.
Buyers in this category are typically younger baby boomers, the survey found. The second-home purchases are either for family use or for investment.
Coldwell Banker last year sold about $56 billion of homes worth at least $1 million, up from $35 billion in 2004 and $23 billion in 2003. The company did not provide an estimate of its luxury home sales pace so far this year.
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Speculators "are the people right now that are in trouble in Florida because of oversupply," Gillespie said of owners who bought mainly condos intending to sell at a quick profit. "If you're going to invest in real estate or stocks bonds or gold, don't be a flipper," he said. "You need to be a smart investor, and a smart investor does not buy to flip right away."
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