Second home market trends: Top markets and key insights

According to second home mortgage rate lock data analyzed by Pacaso’s research team, sales of luxury second homes and “Overall, luxury real estate exceeded expectations and outperformed the rest of the second home category and the overall real estate market in Q2 2022,” said Pacaso Co-Founder and CEO Austin Allison. “Despite a rising interest rate environment and growing concerns of a recession, it is clear that demand for this type of asset remains strong.”   The last two years, particularly during the peak of the pandemic, the housing market experienced record growth. Home price appreciation seemingly peaked in April of 2022, when it was up 21% nationwide. Today, the market is beginning to normalize from those unprecedented levels. In May, home prices decelerated for the first time in five months, but were up double digits year-over-year for the 16th consecutive month. The deceleration was partially driven by rising interest rates, an uncertain economy and geopolitical unrest in the Ukraine. Contrary to some headlines, many economists believe that the housing market will continue to grow through 2022, albeit not at the same pace as 2020 and 2021. The current volatility in the stock market has impacted many consumers’ overall net worth in recent months. This in turn drives many to look to more stable asset classes, such as real estate. “Affluent consumers tend to be more insulated from the impacts of an economic downturn,” continued Allison. “Some consumers will look to real estate as a more stable place to park their money during times of increased market volatility. Although they may trim their budgets, this group is less likely to completely drop out of the market. As a result, demand for luxury real estate remains strong, but the acceleration of home price appreciation for this category will likely continue to slow as we saw during Q2 2022.”  While interest rates are rising compared to record low rates during the pandemic, the housing market is still experiencing very healthy demand, particularly in the luxury second home segment. Thirty-year fixed rates rose above 5% in April for the first time in more than a decade. In the second week of June, interest rates rose by 55 basis points, which was the largest one-week increase since 1987. However, for the past 50 years, 30-year fixed mortgage rates have averaged approximately 8%, even crossing above a staggering 18% in the early 1980s. With rates averaging around 5% today, they are still relatively low comparatively. It is important to note that the total share of second home mortgage rate locks was 2.7% in Q2 2022, dropping below the pre-pandemic national average of 3.5% (based on second home mortgage rate locks between 2015-2019). The luxury category makes up approximately 12% of all second home mortgage rate locks. The median price for all second home mortgage rate locks during Q2 2022 was $435,000, which was up 19% year-over-year. Looking specifically at the luxury category, the median price was approximately $1.4 million, which remained relatively flat on a year-over-year basis. However, when it comes to second homes, more than 50% of buyers pay in all cash*. For this reason, looking simply at second home mortgage rate lock data is not the best indicator of true second home sales in the U.S. The median-to-lower end of the housing market, which makes up approximately 88% of all second home mortgage rate locks is being hit particularly hard, thus driving down total second home mortgage rate lock growth on a year-over-basis. In fact, numerous discount brokerages and mortgage companies are reportedly laying off agents in mass due to decreasing demand for median to lower priced homes.  Second home buyers were focused on locally-relevant destinations that feature outdoor attractions, many located along waterfronts, as the peak summer travel season approached.  “For the past two years, premier second home destinations like Aspen, Malibu and Tahoe experienced strong buyer demand,” said Allison. “As inventories were constrained and prices accelerated in those markets, buyers began looking to more locally-relevant destinations for their second home. In those markets, buyers can get a lot more for their money without sacrificing on the quality of their home or proximity to outdoor activities.” Coeur d’Alene, ID and Williamson County, TN experienced the largest year-over-year increase in the median purchase price for luxury second homes of 52% and 42%, respectively. These destinations offer a wealth of outdoor activities, such as hiking, mountain biking, and fishing, making them optimal second home destinations. Situated along Washington’s Puget Sound, Kitsap County, WA, which boasts miles of beautiful shoreline, golf courses, water activities, and boat excursions, saw the median price of luxury second homes increase 39% year-over-year. Cape Cod, MA experienced the largest increase in second home rate lock transactions during Q2 2022 (+236% year-over-year). Located just south of Boston, Cape Cod offers a wealth of outdoor activities, pristine beaches, five star restaurants and some of the best mini golf courses in the nation for family-friendly fun. Beachfront counties dominated the top ten list of destinations by transaction count, including  St. Johns County, FL which saw a 220% increase. Sevier County, TN, which is known as the gateway to the Great Smoky Mountains National Park, and Clark County, NV, home to The Last Vegas Strip, also experienced strong growth in second home rate locks, up 147% and 108%, respectively. 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. 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. For this analysis Pacaso’s research team looked at mortgage rate lock volume for both second homes and investment properties for Q2 2022 with a purchase price of greater than $1 million to focus on the luxury end of the second home and investment property category. Rate lock transactions and median purchase price data were sourced at the county level for counties that had a minimum of 5 second home transactions and aggregated quarterly, with Q2 representing the months of April through June 2022. * National Association of REALTORS®, June 2021

In this year's Top Second Home Markets Report, we unveil the top 10 luxury second home markets of 2023 and delve into the top 10 markets to watch in 2024. "The primary U.S. housing market grappled with dynamic challenges throughout 2023, characterized by low inventory, high rates, and rising prices,” said Pacaso CEO and Co-Founder Austin Allison. “These challenges have reverberated into the second home market, giving rise to new trends, including a return to metro-adjacent homes and the emergence of new front-running destinations that offer buyers significant price appreciation and access to outstanding nearby amenities.” 2023’s top luxury second home markets To determine the top U.S. markets, Pacaso analyzed the year-over-year growth in closed transactions of second homes valued over $1 million. Here are the 10 U.S. counties that saw the biggest increases in second home transactions in 2023. New England favorites, distinctive West Coast coastal retreats, and metro-adjacent hideaways nab top spots Newport County, Rhode Island, takes the lead with an impressive 64% surge in second home transactions in 2023, marking a significant increase from 2022. Famous for its iconic Gilded Age mansions, once the favored second home spots for renowned families like the Vanderbilts and Kennedys, Newport boasts a diverse range of activities and attractions, from scenic strolls along the Cliff Walk to savoring the town's most unique shops and restaurants. Other New England counties, traditionally acknowledged as vacation getaway destinations, saw substantial growth in second home transactions in 2023. Noteworthy destinations such as Kennebunkport and Portland, Maine, along with Portsmouth, Rhode Island, recorded more than a 13% increase in transactions from 2022. Big Apple border suburbs Amongst this year’s top 10 markets for second home transactions is Fairfield County, Connecticut (14%) and Westchester County, New York (10%). "In today's dynamic real estate landscape, it's no surprise to witness metro-adjacent counties like Fairfield and Westchester, leading the charts in second home transactions. With the onslaught of hybrid back-to-office policies by several companies, home buyers are seeking the perfect blend of spacious, nature-centric living, all while maintaining the convenience of a short train ride to the city,” said Austin Allison. Distinct western waterways spark interest Douglas County, Nevada (13%), and Island County, Washington (11%), experienced notable year-over-year increases in second home transactions among the top markets. Douglas County, located on the southeastern border of Lake Tahoe, is renowned for lakeside gems like Zephyr Cove and Stateline on the California-Nevada border. Further up north, Island County, Washington, housing Whidbey Island, is primarily recognized for the Naval Air Station but is most visited for its stunning Pacific Northwest landscape, encompassing Destinations to watch in 2024 An addition to this year's Pacaso second home markets report is our analysis of destinations to watch in 2024. To determine the top U.S. markets to watch, Pacaso analyzed the top U.S. counties that saw the biggest appreciation in second home value for homes priced above $1 million.  Florida gets its time in the sun The pandemic-fueled rush to Florida and the surge in second home transactions in previous years seemingly persist, as three Florida counties secure spots on Pacaso’s 2024 watchlist. The top market to keep an eye on in 2024 is Volusia County, Florida, witnessing a remarkable 47% year-over-year increase in average second home value. Volusia also experienced a surge in second home transactions, registering a 19% growth and ranking as the second-largest year-over-year expansion. Volusia is most known for Daytona Beach and other picturesque beach towns like New Smyrna Beach and Ormond Beach. Notably, Volusia County has emerged with the highest average second home price in 2023 year-to-date, boasting an impressive average of $4,105,174. Orange County and Indian River County, Florida are also on our must watch list as they both saw more than 20% appreciation on luxury second homes. Destination dupes “Expedia recently highlighted the phenomenon of 'destination dupes'—budget-friendly alternatives to popular locations—that have left a lasting impact on the travel scene,” said Allison. “It seems this trend is extending into the real estate realm, with locales providing more affordable housing options while offering comparable amenities, access to outdoor activities, scenic beaches, and charming towns, akin to their more famous counterparts. Consider Bald Head Island, North Carolina, as a dupe to South Carolina’s Kiawah or the Charleston barrier islands, Mt. Rose as a substitute for Tahoe’s ski resorts, and even Golden, Colorado, as an alternative to the expected Colorado mountain towns.” In Washoe County, Nevada, home to Reno, also known as the “biggest little city,” there was a remarkable 26% appreciation from 2022. This growth is attributed to its proximity to Lake Tahoe, absence of state income tax, and the presence of amazing yet less-populated ski resorts such as Mt. Rose. Brunswick County, North Carolina, the southernmost county in the state, experienced a 26% appreciation. This picturesque area is home to idyllic beach towns like Ocean Isle, Oak Island, and Bald Head Island.  Meanwhile, Jefferson County, Colorado, a suburb of Denver, witnessed an impressive 37% appreciation. Located in close proximity to the city, it offers a short drive to ski resorts and is home to the iconic Red Rocks Park and Amphitheatre. Park City prevails  Summit County, Utah, the cherished home of the year-round destination Park City, has experienced an impressive 18% increase in second home values from 2022 to 2023. It comes as no surprise that this beloved destination, recognized as one of Pacaso's core second home locations, boasts one of the largest and most pristine ski areas in the U.S. Alongside its proximity to outdoor recreation in all seasons, a lively downtown atmosphere, and its role as the host of the internationally renowned Sundance Film Festival, Park City continues to be a sought-after destination. Homes within the Pacaso marketplace in Park City consistently deliver Methodology Pacaso identified the top U.S. luxury second home markets of 2023 by selecting the 10 counties with the highest year-over-year growth in closed transactions of second homes valued over $1 million from 2022 to 2023. To ensure robust analysis, counties with fewer than 20 second home transactions during this period were excluded. The definition of luxury second homes in this context encompasses residences sold for $1 million or more, specifically designated for seasonal and/or recreational purposes.  Destinations to watch in 2024 are defined as the top U.S. counties that saw the biggest appreciation in second home value for homes priced above $1 million from 2022 to 2023.  Data was provided by real estate analytics firm First American Data & Analytics and includes a sizable share of the market that is taken to be representative of the whole. 

Second home market trends: Key takeaways Second home market cooled in summer, but still relatively hot Across the nation, second home rate locks — a proxy for second home 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. “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 Pacaso Second Home Market Report, which analyzes timely and localized data for the top 50 second home markets, 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 consumer second home buying activity. Transaction volumes decreasing, but home prices up across top 50 markets Most of the top vacation destinations are seeing second home mortgage rate locks decline, 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 Wasatch County, Utah, and Gunnison County, Colorado, also saw sharp increases in second home purchase prices, 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 a number of famous ski destinations like Breckenridge, Keystone, and Copper Mountain.  Of the top 50 second home destinations analyzed, 46 saw a year-over-year decline in transaction activity in the summer months. However, trends in four second home markets stood out as exceptions:  Demand is creating a new wave of second home markets “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. 

There’s no denying the challenges and unpredictability of today’s macro environment. Suddenly, the idea of owning a second home — which saw a surge in demand during the height of the pandemic — sounds a lot less feasible during these changing times. As the market shifts and inventory tightens, is there still value in the second home market? To help answer that question, Pacaso compiled its Here are the biggest takeaways from the report.  1. Demand remains strong for the luxury second home market Sales of luxury second homes and Home prices decelerated in May 2022 for the first time in five months, likely driven by rising interest rates, uncertain economic conditions and geopolitical unrest. The volatility of the stock market has impacted the overall net worth of many consumers. Despite these changes, affluent consumers are increasingly looking at more stable asset classes like real estate. While interest rates are rising, demand for the housing market continues to be healthy, particularly in the luxury second home segment. While the total share of mortgage rate locks for all second homes fell below pre-pandemic levels, this was in large part due to the median-to-lower end of the housing market. In addition, more than 50% of second home buyers pay in all cash. For this reason, looking simply at second home mortgage rate lock data is not the best indicator of true U.S. second home sales. Luxury second homes overall make up about 12% of all second home mortgage rate locks, and median prices remained relatively flat on a year-over-year basis.  3. Second home buyers are flocking to local destinations For the past two years, premier second home destinations like Malibu, Aspen and Lake Tahoe have seen accelerated prices. This has led buyers to increasingly look at more local destinations for their second home — in particular, destinations where buyers can get more for their money without compromising on their home or nearby attractions. Beachfront counties and areas with year-round outdoor activities saw impressive growth, including Coeur d’Alene, ID, Williamson County, TN, Cape Cod, MA and Sevier County, TN to name a few.  The stability (and opportunities) of the second home market Despite our current reality of rising interest rates and concerns of an impending recession, the numbers show that demand for luxury real estate — the second home market in particular — remained strong during the second quarter of 2022. For clients still hoping to enter the second home market, trends show that real estate remains a stable place to purchase, and even more so through responsible and accessible ownership models, like co-ownership. This can be a huge opportunity for both your clients and your business. For the full analysis and methodology, click

Pacaso Second Home Market Report Q4 2021: Key takeaways Numbers point to upswing in second home activity The Many of those trends continued throughout 2021. In fact, in the first quarter of  2021, the percentage of second home mortgage rate locks hit its highest recorded level, reaching a 5.7% share of all mortgage rate locks. In the second and third quarters, second home share decreased (to 4.6% and 4.5%, respectively) before rebounding to 5% late in the year.  “In April of last year, people stopped to take a beat, to see how things would shake out in what everyone hoped would be a post-pandemic reality,” said Pacaso CEO Austin Allison. “For some, that also meant going back to the office, and perhaps not coincidentally, second home sales started to slow. But these last few months, many employers finally decided to make remote work more permanent. This seems to have spurred renewed interest in second home ownership.” Regional trends for Q4 2021: Big gains in ‘Off-Broadway’ markets Transaction growth: Central and North Florida Sumter County, Florida, nestled inland between Orlando and Tampa, saw the largest increase in second home rate lock transactions, with a 65% year-over-year increase. “For the past year, we’ve been tracking up-and-coming second home hot spots,” said Allison. “And actually, Sumter is a perfect example of the kinds of locations we call ‘vacation-destination-adjacent’ that have been catching our eye. If established second home destinations are like Broadway, these emerging nearby destinations are like Off-Broadway, and their moment in the limelight – or the sunshine – is coming.” St. John’s County in Florida also saw an increase in second home transactions, with second home mortgage rate locks up 9.7% year over year. One of the county’s notable cities is St. Augustine, located just south of Jacksonville and north of Daytona Beach. St. Augustine is known for being the nation’s oldest city, and is often referred to as The Ancient City because of its historical landmarks and cobblestone streets that date back to the late 1500s.  Price growth: Eastern California 43 of the 50 counties tracked in Pacaso’s latest report saw double-digit price growth in second home prices. Mono County, California, which borders Yosemite National Park, topped the charts in terms of price growth, with a median purchase price of $790K, up an astonishing 83.7% compared to a year ago. That increase is likely driven by the confluence of several factors, including the area’s extraordinary endowment of natural beauty, its relative proximity to expensive West Coast population centers, and limited new construction. The latter is in stark contrast to some other second home hot spots, like those in Florida, which have seen more significant development.  Price drops: New Jersey Atlantic County, New Jersey, home to Atlantic City, saw the biggest annual declines in second home median sale prices, down 14%. New Jersey has been particularly susceptible to foreclosures, and according to Download the full data set 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

More people are buying second homes than ever before. Although the pandemic-induced buying frenzy slowed in 2021, second homes purchases remain historically high. In popular vacation destinations across the country, demand continues to rise, as do prices, with nearly all top markets seeing To determine the “We know that the pandemic fueled a major surge in second home buying demand, and that national demand peaked in the Rural southeast counties had highest rates of growth In addition to revealing the top second home market in every state, the analysis also highlights the percentage of growth each market has seen over the past year. Perhaps surprisingly, Top 10 markets with biggest increases in share of second home rate locks in 2021 High-priced markets more likely to see declines in rate locks Some markets, despite their popularity, experienced significant declines in their share of second home sales. Dukes County, which includes Martha’s Vineyard and 10 other islands off the southeast coast of Massachusetts, is the top second home market in that state. Still, it saw the biggest year-over-year decline in second home share among all top 50 markets that made the list, down 19.4% from last year. With an average second home price of $1.6 million, Dukes County is also one of the most expensive markets.  Price increases and limited inventory may have contributed to the annual decrease, as well as the emergence of other, more affordable markets with more inventory. Teton County, Wyoming — home to the popular Jackson Hole ski resort — has the highest average second home sale price of all the markets on the list: $3.4 million. It also saw a moderate dip in the share of second home mortgage rate locks, down 7.9% from last year.  Find your second home with Pacaso With prices and demand for second homes continuing to rise in many areas, co-ownership offers a more accessible, simpler option for would-be buyers. Pacaso has co-ownership listings in destinations across the U.S. and in Spain, and is rapidly expanding to new markets. Methodology Pacaso identified the top second home market per state by selecting the county with the highest total percentage of second home mortgage rate locks between January 1 and October 13, 2021, in each state. Counties without at least 50 second home transactions in the period were excluded from the analysis.  Mortgage rate lock data is an 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 mortgage rate lock transactions and average second home purchase price data were sourced at the county level.