During the recession, real estate agents around Lake Huron’s southern shore saw massive changes to the real estate market, and not just in terms of foreclosed homes. As the automotive industry scaled back, so too did blue-collar families who had owned vacation homes along the shores of Lake Huron in Michigan. Families no longer able to afford two homes were forced to sell their summer homes for a more fiscally responsible future, a true reflection of the changing economy.
To understand this better, we must go back to 2001. After the terrorist attacks on the Twin Towers, auto workers flocked to buy second homes in case another attack threatened their city residences. Vacation homes were supposed to be a place to have fun; a place where families could go and forget their troubles.
But wages back then were much higher than they were during the recent recession, many financial experts point out. Back then, two incomes often times supported the lifestyle of having two vehicles, college educations and second homes.
But during the recession, many blue-collar families, who had some vacation homes in their families for generations, were now forced to sell them, making way for executives, professionals and business owners with more disposable income.
Along with the demographic shift in home owners came a startling decrease in real estate prices. Homes that were once going for $269,000 were now being sold for $199,000. A great deal for buyers but a poor deal for sellers who were likely not seeing return on their investments.
The decline in the automotive industry has had a huge impact on the number of vacation homes once owned by these blue-collar workers, say many experts. It’s a sign that the economy may have had a greater impact on the real estate market than many people had originally thought.
Source: The Bloomberg Business Week, “Blue-Collar Vacation-Home Dreams Fade With Auto Jobs,” Chris Christoff, Nov. 12, 2012