Wages have dropped nearly 8 percent since 2006

[Jesus Malverde]

29. Wealth Effect' Drives Vacation-Home Sales

Stock Rally, Real-Estate Rebound Boost Market for Second Houses

Sales of vacation homes are surging again, the result of rising wealth in higher-income households and renewed confidence in the housing market.

The number of second homes acquired for part-time personal use jumped 30% last year to 717,000 homes, according to an annual survey by the National Association of Realtors. The gain was the largest since the association started tracking second-home sales in 2003.

Although the number of second homes sold last year is well short of the high point of nearly 1.1 million in 2006, last year's jump signals a rapidly changing sentiment about the value of residential real estate, which just a few years ago was considered a poor investment amid the broad market bust.

Economists note that the vacation-home market was a beneficiary of last year's big gains in the stock market and rising home values, bringing buyers more wealth and confidence. The Standard & Poor's 500 index of stocks posted a 30% increase last year, its largest since 1997. The median price of an existing home rose by 11.5%, the largest gain since 2005, according to the Realtors group.

http://online.wsj.com/news/articles/SB10001424052702303847804579477770226322860

Party time for the rich.