Second home prices up nearly 20%, buyers flock to drive destinations

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Skyline and river views of downtown Austin, Texas. Photo by MJ Tangonan on Unsplash.
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Pacaso Second Home Market Report Q1 2022: Key takeaways

  • The median second home sale price was up 19.7% YoY nationwide in Q1 2022.
  • Idaho, Maine and Texas were among the top U.S. states with counties experiencing more than 50% growth in second home prices.
  • The share of second home mortgage rate locks was 4.2%, 1.2 times above historic norms.
  • The largest year-over-year increases in the percentage of second home mortgage rate locks were located in the Southeast region of the U.S.

Home prices climb, making efficient use of homes crucial

The median second home price was up 19.7% year-over-year nationwide in Q1 2022 and is outpacing the rise in median primary home prices, which were up 15.6%. “Low inventory continues to fuel record high prices of both primary and secondary homes across the nation. With rising home prices and limited inventory, it is more important than ever to make efficient use of existing homes,” said Pacaso Co-Founder and CEO Austin Allison. “Pacaso’s co-ownership business model offers a unique solution to the current housing market challenge. Pacaso is to homes just like carpooling is to traffic. We consolidate multiple buyers to share ownership of one home, which minimizes competition for existing limited inventory and, ultimately, reduces upward pressure of price appreciation.”A Pacaso analysis revealed that the share of second home mortgage rate locks was 4.2% in Q1 of 2022, 1.2 times above the pre-pandemic national average of 3.5% (based on second home mortgage rate locks between 2015-2019).

Regional trends: New communities emerge as top destinations

Transaction growth: Southeast, Southwest are getting noticed

The Pacaso Q4 2021 Second Home Market Report found that most markets with the largest year-over-year increases in the percentage of second home mortgage rate locks were located in the Southeast portion of the U.S. This trend continues in Q1 2022 as Fannin County, Georgia, saw the largest growth in second home transactions, up 109.8% from last year. Fannin's county seat is Blue Ridge, Georgia, a charming mountain town nestled in the lush Chattahoochee National Forest, known for hiking along the Appalachian Trail, nearby rafting on the Ocoee River, and the scenic Appalachian Railway Train. Crucially, Fannin County is only about a two-hour drive from Atlanta, making it a viable second home destination for those wishing to remain within driving distance of the Atlanta metropolitan area.The area with the next-largest growth in second home transactions was in the Southwest in Lincoln County, New Mexico, which saw 61.5% growth in second home transactions from last year. The county is known for seasonal recreation with nearby Ruidoso Winter Park, summer races at the Ruidoso Downs Racetrack, and year-round hiking and mountain biking trails in the Lincoln National Forest. Lincoln County, too, is within reasonable driving distance of a large metro, about three hours southeast of Albuquerque.

Price growth: Metro-adjacent communities gaining interest

Nationwide, the median second home price was up 19.7% year over year, while on a regional level, six counties experienced more than 50% growth in median second home price from last year. Valley County, Idaho, saw the biggest growth, up 98% year over year. Valley County is home to the resort town McCall, bursting with countless outdoor pursuits, from Payette Lake to three area ski mountains, and is a popular getaway destination for Boise city dwellers and those seeking wide open spaces.“The permanent shift toward working from home has forever changed the way people work and is giving second home buyers more flexibility to spend time away from their primary home and office,” said Allison. “Coupled with rising home price appreciation, demand for second homes in regionally driven destinations is growing faster than premier destinations, like Aspen or Malibu. Communities within a short drive from major metros are gaining interest as many families are looking for a second home where they can spend more time living and working. Ease of access, proximity to outdoor recreation, and a desire for community connection remain key drivers in second home buying decisions.”Cumberland County, Maine, recorded the next-largest growth in second home prices in Q1 2022 with 91.3% increase year over year. Cumberland County is home to the popular coastal community of Cape Elizabeth, which is less than a 30-minute drive from Portland. Hugging the shores of Casco Bay, Cape Elizabeth is known for rich history, lighthouses and New England charm.Coming in third is Gillespie County, Texas, which saw 77.7% growth in its median second home price compared to Q1 of last year. The county, approximately seventy miles west of Austin, is situated in Texas Hill Country and has increasingly become a popular wine-tasting destination. The price growth in Gillespie County is likely driven by several factors, most notably its proximity to Austin, one of the fastest-growing cities in the country. The current metro area population of Austin in 2022 is 2,176,000, a 2.79% increase from 2021. “Premier technology companies such as Oracle and Tesla have relocated their headquarters to Austin, and others such as Google and Facebook have expanded their presence in the Texas city,” said Allison. “The nearby boom and infiltration of tech money blended with the beauty of Hill Country probably explains the sharp increase in prices, as inventory remains low and demand continues to outpace pre-pandemic levels nationwide.”

Median second home purchase price

Pacaso reporting countyYear-over-year increase
Valley County, Idaho98.5%
Cumberland County, Maine91.3%
Gillespie County, Texas77.7%
Kittitas County, Washington75.8%
Washington County, Rhode Island54.5%
Chelan County, Washington50.3%
Camden County, Missouri 48.7%
York County, Maine45.8%
Breckenridge, Colorado45.3%
Download the full data set here.

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 and aggregated quarterly, with Q1 representing the months of January through March 2022. 

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