Vacation-home demand continues to grow
While some companies are announcing dates of when employees must return to offices, plenty of others are pushing back their requirements or abandoning them in favor of an all-remote or a hybrid workforce.
The ability to work from anywhere drove vacationhome demand beginning in mid-2020, when it became clear that the pandemic would linger longer than anyone anticipated in its early days. Affluent Americans who could choose to live anywhere began buying vacation homes they expected to use more frequently.
But even as some people are thinking about a potential return to the office, vacationhome demand continues unabated. A recent report by Redfin real estate brokerage found that demand was up 87% in January compared to pre-pandemic levels. Redfin’s researchers analyzed residential mortgage data on rate locks, which are an indicator of an imminent purchase, and found that demand for second homes far outpaced the 42% demand increase for primary residences in January.
Vacation homes are seeing faster price appreciation than homes in non-vacation markets, too. Median sales prices rose 20% in vacation-home locations in December 2021 compared to December 2020, versus a 13% increase in the median sales prices of homes in nonseasonal towns, according to Redfin.
Zillow’s researchers also found evidence of a spike in demand for vacation homes, with search traffic on its site and home price appreciation higher for vacation-home areas than for the nation overall. Zillow defines a town as a vacation area if at least 10% of the homes are vacation properties.
Searchers on Zillow “favorite” homes to visit them again or share them with a partner, and the site’s research has found that homes with many favorites sell faster and for more money than those with fewer favorites. The number of vacation towns with a larger share of favorites than typical listings has nearly tripled since the start of the pandemic. Home values in nine of the top 10 most popular vacation towns are appreciating faster than the typical U.S. home, according to Zillow.
Vacation towns can be found in a variety of locations, including near beaches, lakes and mountains. Zillow’s analysis found that the most popular vacation markets for searchers, with the highest number of favorites per listing, include Astoria, Ore.; North Port, Fla.; and the Poconos community of East Stroudsburg, Pa.