Shopping for a vacation home? Prices are up a little

• Vacation-home prices may take longer to rebound than other kinds of homes
• Asking prices are up 1%25 in vacation areas vs. 7%25 in others%2C Trulia data show
• More household wealth to drive higher vacation-home sales%2C economist says

Home prices in vacation areas are on the upswing with the rest of the housing market but not as much.

As of May 1, median asking prices per square foot for homes in vacation areas were up 1% from last year vs. a 7% gain for other areas, show data pulled from millions of listings on real estate website Trulia.

Prices in vacation areas are rebounding more slowly than prices generally because vacation homes are luxuries and luxury spending takes more time to recover after a severe recession, says Jed Kolko, Trulia chief economist.

"Traditionally, we run six months behind" local market trends, says Steve Keefe, broker owner of Coldwell Banker Sky Ridge Realty in Lake Arrowhead, 80 miles east of Los Angeles.

In March, the median price for a single-family home in Los Angeles was 17% over last year, CoreLogic data show. Prices are up about 3% year-over-year in Lake Arrowhead, Keefe estimates.

Likewise, Phoenix median home prices were up 19% year-over-year in March, CoreLogic says. Prices in the vacation hotspot of Sedona, about 120 miles north, are not up as much, says associate broker Gila Hager-Sherman of Russ Lyon Sotheby's International Realty in Sedona.

One reason? Phoenix has a lot of investor buyers who are turning homes into rentals. In Sedona, "people don't buy to rent. They buy to live," Hager-Sherman says.

Trulia defined vacation areas as those in which at least a quarter of homes are used occasionally or seasonally, based on the 2010 Census. Prices per square foot show changes in values but aren't influenced by changes in the size of homes on the market, Kolko says.

Demand for vacation homes is being propelled by the same forces as the overall market, including a stronger economy and stock market. Sales will improve more this year because of increases in household wealth, says Lawrence Yun, the National Association of Realtors' chief economist.

Vacation-home buyers also see now as a good time to buy, says Diane Saatchi, agent with Saunders & Associates in the Hamptons on Long Island. "They think the bottom is here, and they're tired of waiting," Saatchi says.

First-quarter median prices were up 11% year-over-year in the Hamptons, where a $1 million to $2 million vacation home is really a "starter" home, Saatchi says.

While bargain-shopping investors have swamped Phoenix, demand in the Hamptons is strongest in the $7 million-and-up range, Saatchi says.

"The billionaires came back before the millionaires," she says.

Vacation areas are seeing tight supplies of available homes, just like the overall market.

In Lake Arrowhead, inventories are slim for homes less than $300,000 but ample in the $600,000-to-$2-million range, Keefe says.

Sedona has less than half the number of homes for sale that it did four years ago. Only about 7% of them are foreclosures or short-sale properties. "They used to be 40% of the market," Hager-Sherman says.

Nationwide, vacation-home sales were up 10% last year, accounting for 11% of all home sales, says the National Association of Realtors. That compared with a 17% jump for primary-residence purchases.