In the 90s, entertainers like Puffy and Jay-Z had people imagining owning a vacation home was just something wealthy people did for fun. In 2020, the pandemic showed buying a vacation home is serious business.
Last summer, vacation home sales rose 16.4% and outpaced the 5.6% growth in total existing-home sales, according to National Association of Realtors. Credit to the vacation-home craze largely goes to the pandemic, as people moved to vacation-home hotspots to get out of the city and have more space. In a year where people adjusted their work and home lifestyles, a vacation home provided a work-from-home environment, students schooled virtually, and limited social interaction.
Vacation properties more than just for fun
It’s more than just another get-away spot, these homes are investments , said Caleb Midgett of Scenic Sotheby’s International Realty in Destin, Florida. Midgett noted a recent property sale at Watersound Beach, Florida, went to a buyer who not only had an interest in personal enjoyment but rental income in the future.
“We see this a lot, as people are tired of looking at investment statements and [decide]to put their money in investments their families can enjoy,” Midgett said.
In the months of July through September 2020, the number of homes intended to be used for vacation climbed to 109,100, a 44% gain from the 75,600 figure during the same period in 2019, according to NAR estimates based on monthly Realtors Confidence Index Survey.
Secondary homes become cash deals
Many of those who bought a secondary home paid cash. From January-April of this year, cash sales rose to 53% compared to less than 50% in previous years.
Those who financed their home put down at least a 20% down payment.
Sixteen had counties that were in the top 1% for vacation homes. Florida has two counties in the top five (Lee and Collier). Oscoda, Michigan; Swain, North Carolina, and Dukes, Massachusetts were also in the top five.
Urge for get-away homes dropped
Demand for secondary homes fell for the first time since April of last year according to a recent Redfin report. The number of buyers who locked in mortgage rates to purchase a second home nationwide fell 11.1% in June.
However, other agents don’t see purchases of vacation homes falling off again.
Nicole Carstensen, a sales associate of Mott & Chace Sotheby’s International Realty of Charlestown, Rhode Island said the trend of buying these secondary homes is here to stay.
“It has not died down, those looking [realize that] being close to home with a short commute to a vacation home allows for more use, the ability to work from home, [and are] close to airports if needed,” she said. “People want out of the cities and a peaceful retreat.”
As the year continues, the vacation-home trend is one to keep an eye on.
