According to the 2006 Coldwell Banker Previews International Luxury Survey, it shows that more than a third of owners of houses priced over $1 million in states other than California -- where the cutoff is $2 million -- own second homes. Another 35% are considering buying one.

The company reported that home price gains are slowing after five years of double-digit increases and inventories of unsold homes are swelling. The Fed has slowed the white-hot pace of housing, particularly purchases by speculators, as it aims to quell inflationary pressures.

Pulte Homes Inc., the second-largest U.S. homebuilder, slashed its profit outlook on Friday, helping send building stocks to low last seen in 2004. This was the latest evidence that rising interest rates and lofty home prices are crimping demand for housing.

Coldwell expects the second-home buying by high-end owners to stay strong as baby boomers plan for future retirement. Because of smart investments, equity in their homes and in some cases inheritances, luxury properties have become attainable for many Americans.
 
By M. Sese
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