The New York Times has this report on second homes. "The brand new 6,000-square-foot vacation home has been on the market for more than a year. After plenty of showings, but no offers, the investor who built the house recently cut the price twice, by a total of $600,000, to $4 million."

"It has still not been sold. The price reductions have created more interest, and he now hopes that it will be sold right after Labor Day, a prime season for home transactions in the Hamptons. 'My feeling is that everybody is waiting for the dust to settle before they make their big decision,' said the agent, Ira Birns. But, he acknowledged ruefully, 'there is a lot to choose from.'"

"It is not just the most expensive vacation homes that are going begging. A wide variety of popular locations for second homes, areas like Florida, the Jersey Shore and Lake Tahoe, as well as the high-price playground on the East End of Long Island, has slowed markedly in recent months."

"As the overall housing market weakens, the interest in buying vacation homes appears to be falling faster. 'Second-home buying is very discretionary,' said Edward Leamer, an economist at the University of California, Los Angeles. 'There is no force of demographics that is pushing people into buying homes as there is in primary home markets.'"

"Prices at all levels are softening, and in a few places recently have begun dropping. In Florida, price declines have been most pronounced in areas dominated by second-home sales. In June, median prices fell 8 percent from a year earlier in Naples and nearby Marco Island on the west coast and 10 percent in Panama City in the Panhandle."

"Paul Ciotti has had his two-bedroom beachfront condominium in Naples on the market since late last year. He first asked $999,000, when 'everybody was going for pie in the sky.' He has since cut the price to $799,000. Mr. Ciotti bought it for $515,000 in 2004."

"This spring and summer, median home prices in the Ocean City, NJ., area have fallen by 10 to 15 percent from a year earlier. Sales have slowed and more houses are sitting on the market, according to Nicholas J. Marotta, president of the Ocean City Board of Realtors."

"He blames speculators for rapidly inflating and then depressing the market by trading in condominiums and oceanfront homes that they bought with low-interest loans requiring only small down payments."

"A local developer added that new construction had flooded the market, with more than 100 homes priced at $2 million or more. 'We believed in our own confidence,' said the developer, Raffaele Pansini, who has been building homes for nine years. 'And in a way, we proved ourselves wrong because we don’t have 100 buyers coming in.'"

"Anecdotal evidence suggests that vacation homes might have reached a new high-water mark in 2005. 'I saw a lot of clients buy first, and ask questions later, on second and third properties,' said Leo Grohowski, at U.S. Trust, which caters to affluent families."