From what I read, there will be a second season, but in a new house with mostly new characters. There are a few videos and such at this link AHS that shows "clues" to next season.
Quote:
As viewers were captivated by the beautifully tragic telling of the Harmon family’s experience in the “Murder House” on FX’s American Horror Story, all eyes are on creator Ryan Murphy and Brad Falchuk as their televisual noir enters into its second season.
With over 3.8 million viewers tuning in to the American Horror Story season one finale, the proverbial book has been closed on Ben (Dylan McDermott), Vivien (Connie Britton), Violet (Taissa Farmiga), Tate (Evan Peters), and Constance (Jessica Lange). The house, both literally and figuratively, is gone – along with majority of the first season cast.
By deciding to make American Horror Story an anthology series from the beginning, it was always Murphy and Falchuk’s ambitious plans to change the narrative focus, location and cast with each season. The only element that will tie the seasons together with be theme of an “American horror” story.
So what awaits fans when American Horror Story season 2 premieres?
Here’s what we know:
The Hints:
Contained within the penultimate episode of season one, entitled “Birth,” are hints that not only reveal the location of American Horror Story season 2, but also what the story will be about.
As previously stated, almost all of the cast of American Horror Story will be replaced for the second season. While Murphy revealed that they’re still negotiating with a handful of original cast members to return as different characters, he also stated that they’re currently meeting with new actors for the majority of the roles.
The first season of American Horror Story dealt with the theme of infidelity in marriage, coupled with the trappings of a haunted house. Heading into the second season, Murphy has stated that the “California house approach” is over.
Electing to change and evolve the series from season to season, Murphy and the rest of the series writers are looking at topical themes effecting society – along with locations “filled with demons and ghosts.”