The National Association of Real Estate Agents (NAR) has published its 2021 Vacation Home Counties Report, who found that during the period of the second half of 2020 and until April 2021, there had been a resurgence of interest in vacation homes, causing the market to spike.
In 2020, the share of vacation home sales in total existing home sales increased to 5.5% (5% in 2019). Vacation home sales increased 16.4%, surpassing overall growth in existing home sales by 5.6%. From January to April 2021, the share of vacation home sales in total existing home sales increased to 6.7%. Vacation home sales jumped 57.2% year over year compared to the 20% year-over-year growth in total existing home sales.
âVacation homes are a hot commodity right now,â said Lawrence Yun, chief economist for NAR. “With many businesses and employers still offering workers the option of remote working, vacation homes and second homes will remain a popular choice among buyers.”
According to 2021 Vacation Home Counties Report report, median selling prices of existing homes in vacation counties have also increased faster than in the rest of the country, rising 14.2% from 10.1% in counties other than vacation homes. Properties in vacation home counties typically stayed on the market longer in 2020 than those in other areas (59 days vs. 30 days). Nonetheless, homes sold broadly at a faster rate in vacation home counties compared to the previous 13-day year, compared to just eight days in counties without vacation homes. Overall, the median number of net migrants in second home counties increased from 78,114 in 2019 to 98,279 in 2020.
For the analysis, NAR classified a county as a vacation home county if vacant seasonal / occasional / recreational dwellings made up at least 20% of the housing stock. Based on five-year estimates from the 2019 American Community Survey of the US Census Bureau, NAR identified 323 of 3,143 counties (including independent cities) as vacation home counties, representing 10.3% of US counties. .
Remote work scenarios related to a pandemic have been the main driver of interest in these vacation areas, with many now having the option of working from home.
âThe enduring remote working opportunity will continue to increase the already high demand for properties in these counties, especially in counties with reliable broadband internet service,â Yun said.
NAR has found that the top 10 counties for vacation homes are:
- Lee County, Florida
- Oscoda County, Michigan
- Swain County, North Carolina
- Collier County, Florida
- Dukes County, Massachusetts
- Alleghany County, North Carolina
- Garrett County, Maryland
- Barnstable County, Massachusetts
- Alcona County, Michigan
- Macon County, North Carolina
Of the nine U.S. divisions, the South Atlantic (consisting of Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia, and the District of Columbia) saw the strongest sales growth, with home sales up nearly 31% in 2020 in vacation home counties. The second strongest sales growth was in the Middle Atlantic division (New Jersey, New York and Pennsylvania), with home sales up 27.8% in 2020 in vacation home counties. The third line was the West South Central (Arkansas, Louisiana, Oklahoma and Texas) division where sales typically increased 25.7% in 2020 in vacation home counties. In the New England division (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont), sales generally climbed 25.3% in 2020 in second home counties.
A short-stock market can also be found in the vacation home space, as just like mid-priced homes, vacation home sales also see buyers resorting to a number of tactics to close the deal. . A recent report from Zillow found that at least half of listing agents surveyed encountered a cash offer, escalation clause, bid before offer review date, higher down payment, or more money when considering offers. This same study found that 28% of them planned to offer more than 20% cash payment, 21% planned to increase their down payment and 17% planned to offer above the asking price or all in cash. Almost half were willing to offer up to 10% above the asking price.
âReal estate agents across the country have reported that buyers who can afford to pay in cash are doing just that,â Yun said. âFrom a seller’s perspective, paying this way is a much more attractive offer given the current high demand for vacation homes. “