Sales of vacation homes sink 37% in '06

She paid $620,000 for the place 13 months ago. But since then, the California vacation-home market has gone soft.

"If I sold my second home right now, it wouldn't do very well," the Pasadena-based real estate agent said.

Sales of second homes in California's top vacation markets dropped 37% in 2006 from the year before, another consequence of the state's overall housing slowdown, according to data released Thursday by real estate research firm DataQuick Information Systems.

By contrast, sales last year for all homes statewide fell 24.9% from a year earlier, La Jolla-based DataQuick said.

But despite the sales plunge, prices for second homes still rose last year, gaining 10.8% versus 2005 to a median of $400,000. The median price for all California homes rose 6.5% last year to $469,500, according to DataQuick.

Some analysts see the second-home price gains as a positive sign for the economy and overall housing market. If the economy was faltering, second-home owners -- who are typically more affluent -- would be selling at reduced prices.

That's what happened in the early 1990s, when widespread job losses among middle-class workers caused vacation markets such as Big Bear and Palm Springs to tank first.

"If you were in trouble, you would sell your second home first," said John Karevoll, DataQuick's chief analyst. "If there is trouble on the horizon, it hasn't hit yet."

But now that overall home prices have stopped their double-digit gains, Californians seeking a cozy ski cabin or desert getaway are being more strategic about where to spend their real estate nest eggs.

"As prices leveled off last year, interest in weekend retreats declined," DataQuick President Marshall Prentice said.

The drop in second-home sales was about the same in three major vacation markets. Sales in the Greater Palm Springs area fell 38.4%; the Lake Arrowhead-Big Bear area tailed off 37.3%; and the Sierra and foothill communities tumbled 34.7%, DataQuick found.

Even such places as Earp, Calif., a budding second-home market for Colorado River enthusiasts where a 2,000-square-foot house can be had for $159,000, saw a 27% drop in sales -- from 11 homes in 2005 to eight last year.