Demand for second and vacation homes has risen 84% year over year – more than double the demand for a primary home, according to a new report from Redfin.
That follows a startling trend of high vacation home demand, continuing an eight-month streak of more than 80% and includes a peak of 118% year-over-year in September 2020.
Redfin Economist Taylor Marr said the popularity of vacation homes is indicative of the rise in remote work due to the coronavirus pandemic. More families are spending time outdoors, and those that can afford it are opting to move to less-crowded parts of the country.
Others, Marr said, are choosing to spend as much time as possible during the pandemic at vacation destinations, or “seasonal towns” – even for work.
“The popularity of vacation towns is not a fad,” Marr said. “Many Americans have realized remote work is here to stay, allowing some fortunate people to work from a lakefront cabin or ski condo indefinitely.
How to Diversify Your Brokerage to Weather Economic Hardship
Diversification is one approach brokerages can adopt to help ensure stability in unavoidable times of uncertainty, work to protect their revenue and – ultimately – financially weatherproof their business.
Presented by: Motto Mortgage
A seasonal town is defined by Redin as an area where more than 30% of housing is used for seasonal or recreational purposes. The median sale price for homes in seasonal towns rose 19% year over year in December to $408,000.
Agents began reporting bidding wars for luxury and second homes as early as last summer. July showings in Summit County, Colorado, for example, were up 92% year-over-year. Summit County includes popular tourist and vacation destinations Breckenridge and Keystone. Jackson Hole, Wyoming, became a popular summer destination as well, with 46% of homes listed above $1.5 million receiving bids in the summer.
Seasonal town popularity continued into the third quarter of 2020, when some of the country’s popular vacation areas began reporting staggeringly high year-over-year increases in population. Home sales in the Hamptons shot up 51% in the third quarter; contracts for homes in Palm Beach rose 62%; and skiing destinations like Aspen, Colorado saw an uptick in children’s school enrollments.
But the exodus to vacation towns and second homes by affluent Americans has, however, shined a light on the hardships being felt by lower-income families during the COVID-19 pandemic. Many of these families continue to suffer financially while many high earners benefit from skyrocketing home values and well-performing stock portfolios, Marr said.
“It’s representative of the K-shaped economic recovery from the pandemic-driven recession,” Marr said. “Many well-off remote workers are able to follow their dreams and purchase second homes, but it has become even more difficult for many lower-income people to buy a primary residence as home values rise and the recession disproportionately impacts employees in the service sector.”
