After soaring through the pandemic, second home transaction volume has started dropping, according to real estate platform Pacaso’s second home market report. Second home rate locks fell 26.6 percent year-over-year this summer, according to Pacaso.
Even so, the overall market share of second homes is still up from pre-pandemic levels. From 2017 through 2019, second home transactions averaged a 3.8 percent quarterly market share of all rate locks. As of summer 2021, second homes made up a 4.3 percent market share.
All but one county tracked by Pacaso saw double-digit price growth in second home purchase this summer. Kauai, Hawaii saw the highest growth, with a median purchase price of $1.25 million, up 83.3 percent year-over-year. Wasatch County, Utah, (up 53.9 percent) and Gunnison County, Colo., (up 53.2 percent) also saw sharp increases year-over-year.
“It’s clear that there’s been a sea change not only in where people live and work, but also where they choose to get away from it all. The market looks completely different than it did two or three years ago,” Pacaso CEO Austin Allison said in a release. “It used to be that major metros were the primary hotbeds of real estate activity, and now we are seeing double-digit price growth across the entire U.S., and intense interest in second homes in places like Boise, Idaho, and Eagle County up in the Colorado Rockies. This widespread demand is creating a new wave of second home markets with more moderate median home prices but the same types of amenities and outdoor recreation options typical of their more famous counterparts.”
Of the top 50 second home destinations analyzed, 46 saw a year-over-year decline in transaction activity in the summer months. However, rate locks for second homes were up in Kauai, Hawaii (23.5 percent), Summit County, Colo. (10.2 percent), Eagle County, Colo. (9.8 percent) and Boise County, Idaho (4.4 percent).
El Dorado County, Calif., saw the biggest year-over-year decline in second home mortgage rate lock volumes (-62.5 percent), almost certainly related to this summer's wildfires, Pacaso said. It was followed by Cass County, Minn. (-60.7 percent), and Chelan County, Wash., and Beaufort County, S.C. (-59 percent each).