Demand for vacation homes sits at its highest level in a year.
Everyone Still Wants a Vacation Home
At two years and counting into the pandemic, buyers who can afford to still want to buy a vacation home. According to Redfin, second-home demand sits +87% higher now than pre-pandemic levels.
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Vacation home demand jumped to the highest level it’s been in a year, just below the 90% record gain of September 2020, during January 2022.
Compare this gain of +87% from pre-pandemic levels for vacation homes to a gain of just +42% from pre-pandemic levels for primary homes.
Why Such Strong Demand for Vacation Homes in January 2022?
“Demand for second homes was strong in January as buyers tried to lock in relatively low mortgage payments,” said Taylor Marr, Deputy Chief Economist with Redfin.
Marr continued. “Mortgage rates surpassed 3.5% in January for the first time since March 2020, encouraging buyers who were on the fence about purchasing a vacation home to commit before rates increase further. While I expect demand for second homes to remain higher than it was before the pandemic, mostly because of remote work, it may fall slightly in the coming year as mortgage rates continue to go up and fees for second home loans increase.”
Seasonal Towns Benefitting Most from Second Home Splurge
Median home prices in seasonal home markets ($501,000) have jumped +20% y/y (with 18 consecutive months of double-digit price growth) compared to +13% in non-seasonal towns ($408,000). (Redfin considers a seasonal market to be one with more than 30% of its housing used for recreational or seasonal purposes, according to 2019 Census data.)
Likewise, strong demand for vacation homes in seasonal towns is depleting the number of for-sale homes. During Q4 2021, inventory in seasonal towns was down -29% y/y while inventory in non-seasonal towns was down -16%.
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Thanks to Redfin.
