Vacation Homes Slim Down to Attract Buyers

Fashion mogul Calvin Klein isn't known for skimping on anything -- except for some underwear designs -- so it came as a surprise that he just downsized plans for his soon-to-be-built Hamptons beach house.

He isn't alone in wanting a more humble vacation retreat. While we already know about the great shrinking single-family home for average folks, now comes word that second homes aimed at the most affluent buyers are also slimming down.

A sales slump and bloated inventories are forcing developers to build smaller, less expensive houses, especially in resort communities, the Wall Street Journal reports. From Caribbean islands to ritzy Rocky Mountain retreats, prices are being slashed by as much as 44 percent -- along with, of course, square footage, acreage and some amenities.

It's easy to see why: Vacation home sales peaked at around one million in 2005, but dipped to about half that last year as the overall real estate market tanked. There's been a bit of an uptick this year, but that's coming off of deep lows.

So will smaller, cheaper cottages help kick-start the depressed market for second homes?
The plan might work. Everyone is looking for a real estate bargain these days, even the rich, who probably won't mind sacrificing some square feet for a lower price, which combined with low interest rates makes a beach house or mountain cabin very attractive.

However, because part of the upswing in vacation home sales are due to foreigners with strong currencies moving into the market, they could balk at having to do with less than a Gatsby-like palace for their overseas hideaway.

To be sure, even homes with more modest dimensions won't mean you have to bunk in a scruffy dacha.

At the Pine Creek Sporting Club in Okeechobee, Fla., you would have paid $2 million and up for a home with between 2,500 and 5,000 square feet; today, there's a $600,000 model with between 1,500- and 2,000-square feet for sale, the Journal points out.

Calvin Klein wasn't that dramatic with his Hamptons downsizing, but he did chop three feet off the height and submerged two sides of the guest wing, doing away with the original design for a two-story above-grade structure (and tear down a 55,000-square foot monster to make way for his new place).

A sleeker, slimmer silhouette for second homes is certainly in vogue.

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