Second Home Transaction Volume Decreased from Pandemic Peak but Still Higher than Pre-pandemic Levels

Pacaso's Second Home Market Report finds 49 of the 50 top destinations saw double-digit price growth in summer months

- National second home rate locks soared during the pandemic, more than doubling their level from a year earlier (peaking at 103.7% YoY growth as of fall 2020), but fell 26.6% YoY this summer.

- Second home mortgage rate locks continue to account for a higher share of the total market than they did before the pandemic.

- Kauai County, Hawaii saw the greatest appreciation, with second home median sale prices up 83.3% YoY.

News provided by

Pacaso

Oct 06, 2021, 09:00 ET

SAN FRANCISCO, Oct. 6, 2021 /PRNewswire/ -- Pacaso, the leading real estate platform that helps people buy and co-own a second home, today released the new Pacaso Second Home Market Report, the most timely and localized data available for the top 50 second home markets. The report is a composite including property use and mortgage rate lock data. It includes counties with a percentage of seasonal homes and median home values at or above the top 20th percentile. Mortgage rate lock data is a leading indicator of second home buying activity.

Share of Second Home Mortgage Rate Locks

"A year ago as Pacaso was preparing to launch, we wanted to better understand the second home market, and quickly realized there was a massive gap in local, timely second home data," said Pacaso CEO Austin Allison. "It's estimated that there are nearly 10 million second homes in the U.S., and with pandemic-driven shifts that have allowed people greater flexibility around where they live and work, we expect to see this number continue to grow. The second home housing market represents a significant subset of the market that is critical to watch in order to fully understand the U.S. housing market."

The report found that across the nation, second home rate locks--a proxy for transactions-- increased throughout the pandemic, peaking in Summer 2020 and again in Spring 2021, but falling 26.6% year over year this past summer. Despite this recent cooling of the pandemic-fueled second home surge, overall market share of second homes is still up from pre-pandemic levels. From 2017 through 2019, second home transactions averaged a 3.8% quarterly market share of all rate locks. As of summer 2021, that percentage was up from pre-pandemic levels, with second homes comprising a 4.3% market share.

Across the board, second home transactions are mostly down, but prices remain highly elevated and continue to rise. All but one county tracked in Pacaso's report saw double-digit price growth in second home purchase prices this past summer. Kauai, Hawaii saw the highest growth, with a median purchase price of $1.25 million, up 83.3% compared to a year ago. The island of Kauai has seen sharp growth in tourism and leisure travel since travel bans to the area were lifted. Wasatch County, Utah and Gunnison County, Colorado also saw sharp increases, up 53.9% and 53.2% respectively year over year. Prior to this spike, Wasatch County historically had a lower median second home price than neighboring Summit County, Utah, which is home to popular resort town Park City. Meanwhile, Gunnison County, located in the Colorado Rockies and home to ski resort Crested Butte, still has a lower median second home price than neighboring Summit County, Colorado, which is home to Breckenridge.

Of the top 50 second home destinations analyzed, 46 saw a year-over-year decline in transaction activity in the summer months. However, four markets stood out as exceptions: In Kauai, Hawaii, rate locks for second homes were up 23.5%. Summit County and Eagle County, Colorado, also saw annual increases of 10.2% and 9.8%, respectively, and Boise County, Idaho, saw a 4.4% increase in second home mortgage rate locks 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," said Pacaso CEO Austin Allison. "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."

At the other extreme, El Dorado County, California saw the biggest decline in second home mortgage rate lock volumes, down by 62.5%, which was almost certainly related to this summer's wildfires in Lake Tahoe. Cass County, Minnesota (-60.7%), Chelan County, Washington, and Beaufort County, South Carolina were just behind, both down 59% year over year. Most of these markets posted extreme growth the year before, which was not sustained.

Methodology
Pacaso identified the nation's top second home markets by compiling census data on counties with a percentage of seasonal homes and median home values at or above the top 20th percentile and by excluding those below the bottom 10th percentile of counties with the fewest households. Counties without at least 20 second home transactions in the period were also excluded from the analysis.

Pacaso then analyzed real estate activity in the top second home markets by observing mortgage rate lock data, a leading indicator of second home buying activity. When applying for a mortgage rate lock, a home buyer must specify whether they are securing a mortgage rate for a primary home, secondary home or an investment property. Approximately 80% of mortgage rate locks result in home purchases. Mortgage rate lock data was provided by real estate analytics firm Optimal Blue and includes a sizable share of the market that is taken to be representative of the whole. Second home rate lock transactions and median purchase price data were sourced at the county level with the months June through August 2021 comprising the "summer" period in this analysis.

To view the complete report, please visit the Pacaso blog.

Pacaso Second Home Market Report
County	Metro (For Reference)	Share of 2nd Home Rate Locks	2nd Home Transactions YoY	Median 2nd Home Purchase Price	Median 2nd Home Purchase Price YoY	Median 2nd Home Purchase Price Last Year
Summit County, Colorado	Breckenridge, CO	60.2%	10.2%	$821,000	30.5%	$629,000
Summit County, Utah	Park City, UT	28.4%	-42.4%	$915,000	20.5%	$760,000
Valley County, Idaho	McCall, ID	58.1%	-51.7%	$585,000	46.6%	$399,000
Barnstable County, Massachusetts	Barnstable, MA (Cape Cod)	33.5%	-56.2%	$660,000	25.7%	$525,000
Eagle County, Colorado	Vail, CO	30.1%	9.8%	$975,000	43.3%	$680,000
Grand County, Colorado	Granby, CO (Winter Park)	59.9%	-24.2%	$695,000	20.9%	$575,000
Mono County, California	Mammoth Lakes, CA	41.1%	-58.4%	$679,000	33.9%	$507,000
Cape May County, New Jersey	Ocean City, NJ	55.1%	-53.5%	$650,000	28.7%	$505,000
Park County, Colorado	Fairplay, CO	34.8%	-14.6%	$559,000	34.7%	$415,000
Gunnison County, Colorado	Crested Butte, CO	31.8%	-41.3%	$780,000	53.2%	$509,000
Routt County, Colorado	Steamboat Springs, CO	30.5%	-37.5%	$740,000	45.5%	$509,000
Monroe County, Florida	Key West, FL (Florida Keys)	34.6%	-44.0%	$780,000	22.8%	$635,000
Worcester County, Maryland	Ocean City, MD	58.4%	-53.5%	$375,000	19.6%	$314,000
Calaveras County, California	San Andreas, CA	27.0%	-46.4%	$495,000	36.0%	$364,000
Collier County, Florida	Naples, FL	24.2%	-21.3%	$455,000	11.0%	$410,000
Dare County, North Carolina	Kill Devil Hills, NC	49.0%	-47.3%	$510,000	24.8%	$409,000
Archuleta County, Colorado	Steamboat Springs, CO	32.0%	-53.9%	$492,000	22.6%	$402,000
Wasatch County, Utah	Heber, UT	21.9%	-39.5%	$947,000	53.9%	$616,000
Carroll County, New Hampshire	Conway, NH	35.8%	-26.6%	$397,000	34.6%	$295,000
Tillamook County, Oregon	Tillamook, OR	39.1%	-12.8%	$529,000	21.6%	$435,000
Nevada County, California	Truckee, CA	15.1%	-43.5%	$956,000	39.6%	$685,000
El Dorado County, California	South Lake Tahoe, CA	9.0%	-62.5%	$600,000	14.2%	$525,000
Sussex County, Delaware	Rehoboth Beach, DE	32.1%	-38.2%	$475,000	14.7%	$414,000
Beaufort County, South Carolina	Hilton Head Island, SC	21.2%	-59.0%	$496,000	28.8%	$385,000
Tuolumne County, California	Sonora, CA	20.8%	-41.1%	$425,000	34.9%	$315,000
Clatsop County, Oregon	Astoria, OR	20.3%	-16.7%	$505,000	16.2%	$435,000
Boise County, Idaho	Boise, ID	44.4%	4.4%	$509,000	45.1%	$351,000
Watauga County, North Carolina	Boone, NC	47.3%	-48.0%	$413,000	13.0%	$365,000
Lincoln County, Oregon	Newport, OR	23.8%	-31.4%	$490,000	11.5%	$440,000
Washington County, Rhode Island	Providence, RI	24.2%	-39.4%	$660,000	22.5%	$539,000
Kauai County, Hawaii	Kapa'a, HI	19.1%	23.5%	$1,250,000	83.3%	$682,000
Kane County, Utah	Kanab, UT	56.5%	-49.0%	$360,000	28.6%	$280,000
Belknap County, New Hampshire	Laconia, NH	25.5%	-42.4%	$421,000	17.8%	$358,000
Walton County, Florida	Miramar Beach, FL	37.0%	-35.1%	$750,000	27.8%	$587,000
Currituck County, North Carolina	Currituck, NC (Outer Banks)	25.4%	-58.8%	$655,000	37.9%	$475,000
Coconino County, Arizona	Flagstaff, AZ	31.2%	-48.0%	$558,000	36.1%	$410,000
Bonner County, Idaho	Sandpoint, ID	20.5%	-53.5%	$675,000	37.8%	$490,000
Lake County, Montana	Polson, MT	30.1%	-38.9%	$583,000	22.8%	$474,000
Kittitas County, Washington	Ellensburg, WA	21.4%	-36.8%	$633,000	10.0%	$575,000
Camden County, Missouri	Camdenton, MO	48.0%	-52.6%	$319,000	21.2%	$263,000
Hancock County, Maine	Bar Harbor, ME	30.1%	-44.4%	$420,000	20.0%	$350,000
Carteret County, North Carolina	Emerald Isle, NC (Crystal Coast)	34.0%	-44.5%	$464,000	26.1%	$368,000
Windham County, Vermont	Stratton, VT	35.5%	-56.9%	$338,000	32.4%	$255,000
Nelson County, Virginia	Lovingston, VA (Shenandoah Valley)	45.5%	-28.6%	$374,000	30.2%	$288,000
Chelan County, Washington	Wenatchee, WA	25.0%	-59.0%	$699,000	39.8%	$500,000
Brunswick County, North Carolina	Carolina Beach, NC	22.4%	-54.1%	$447,000	28.5%	$348,000
Grafton County, New Hampshire	Lebanon, NH	18.0%	-57.6%	$329,000	25.9%	$261,000
Cass County, Minnesota	Lake Shore, MN	33.9%	-60.7%	$405,000	24.6%	$325,000
Windsor County, Vermont	Hartford, VT	28.1%	-37.3%	$406,000	16.0%	$350,000
Lee County, Florida	Sanibel Island, Fl	16.7%	-3.6%	$350,000	8.0%	$324,000

About Pacaso
Pacaso^® (pronounced like "Picasso") modernizes the decades-old practice of co-ownership by creating a marketplace that makes buying, owning, and selling a luxury second home easy. From curating the best listings in top second home markets to offering integrated financing and sales from as little as ⅛ to as much as ½ ownership; upscale interior design; and professional property management, Pacaso provides owners with all the benefits of owning a second home with less hassle. After purchase, Pacaso manages the home on an ongoing basis and supports a frictionless resale process in partnership with a licensed real estate professional.

Pacaso was co-founded by former Zillow executives Austin Allison and Spencer Rascoff.

Contact: Amy Musser, [email protected]

SOURCE Pacaso