"The easiest home to sell is the second one" - heading back to 2004 (and lower) prices with the second home glut

Ah, gotta hand it to the boomers. Just like going for seconds and thirds at that $9.99 Las Vegas buffet, they went to the trough these past few years and loaded up on second (and third, and fourth) homes.

Everyone's getting rich! It's a can't-miss! We'll retire on the house!

Oops. Maybe not. Baby Boomer Bailout anyone?

Barron's: Second-Home Housing Glut - Real-Estate Bubble Losing Air

It would seem to have it all: four bedrooms, a guest house, a pool and a rock waterfall. But the vacation home in Naples, Fla., hasn't been drawing much interest from buyers, so the seller recently threw in that most modern of amenities: the $1 million price cut. That's brought the asking price down a full 25%.

"If you want to sell, you've got to go back to '04 prices," says Chip Harris of Coldwell Banker Previews International, which is handling the property.

The market for second homes could use a second wind. After a long string of double-digit annual price increases, a number of second-home meccas across the country are suddenly suffering from plunging sales volume and burgeoning inventories of unsold homes.

Result: Naples-style discounting is starting to spread.

It hit the town of Pocasset, on Massachusetts' Cape Cod, just as retired executive Jack Reen was trying to sell his four-acre, six-bedroom beachfront home. He cut the price several times, for a total of 42% off the listing price, before striking a deal at $3.95 million. Reen takes a philosophical view of the experience, noting that the original price was set at the top of the market. "Calling the tops and bottoms is impossible," he says.

It's all a big change from the seemingly endless rises in prices. For more than a decade, baby boomers have been flocking to the second-homes market and lifting prices, just as they'd earlier lifted the market for primary residences. The market barreled ahead during the past few years, and the demographics -- 75 million boomers -- still bode well for long-term growth. But first, the market has some correcting to tend to.

HousingPANIC Stupid Question of the Day

What will America do with all its unwanted and unneeded houses and condos now?

Empty houses and condos at record levels

The number that got all the attention this week was 2.7 percent. That's the percentage of homes that are sitting empty across the United States. And it's certainly noteworthy, because in the four decades since the Census Bureau began tracking that number, it's never gone higher than 2 percent.

Put another way, there are 2.1 million empty homes out there, and the people who own them are taking a vicious beating.

But the really nasty number almost got lost in the shuffle. It's 11 percent. That's the number of buildings with five or more units (read: condominiums) that were unoccupied during the fourth quarter.

These and other numbers are being bandied about this week at the National Association of Home Builders' International Business Show. If you recall, this is the same show at which economists last year announced what developers were already figuring out - that the speculators feeding the condo boom had packed up and gone home.