According to a new report from Redfin, the annual increase in demand for second homes will almost quadruple year-on-year for primary homes by 34 percent.
The real estate market saw a surge in interest in second homes as concerns about the spread of COVID-19 stalled the US early last year and a migration of Americans moving from crowded, closed cities to the suburbs or even more rural areas.
But nobody really knew when the pandemic was going to end or when (if at all) they were expected to go back to the office.
So to the already overcrowded and Inventory starved In the housing market, many consumers started buying second homes. Over the past year, the number of homebuyers setting mortgage rates on second homes has increased dramatically Record 128 percent Year after year in March, according to a new report from Redfin, a technology-driven real estate agent. This is the 10th consecutive month of growth of more than 80 percent annually.
The year-on-year increase should be seen in context, however, as demand for second homes was relatively weak in March 2020 when the coronavirus pandemic first hit the US and real estate activity was temporarily halted with lockdowns in many parts of the country.
Pandemic demand for second homes is increasing as many remote affluent workers choose to spend at least some of their time in vacation destinations, although some companies plan to return employees to the office. The annual increase in demand for second homes quadruples compared to the previous year’s figure of 34 percent compared to primary homes almost four times.
“The Palm Springs real estate market is incredibly busy, with an influx of vacation home buyers from Los Angeles and San Francisco,” said local Redfin agent Nisa Sheikh. “Many of them are technicians who can do their work remotely, and they enjoy the weather and lifestyle here in the desert. People don’t want to vacation in a hotel room right now, and a lot of my buyers plan to convert their second homes into Airbnb rentals and earn extra income when they’re out of town. “
Airbnb deleted a current report New hosts revealed made $ 1 billion during the pandemic, and hosts made an average of $ 7,900 a year. Now the company expects an increase in early summer.
However, Redfin stated that the increased interest in second homes also helped highlight the uneven financial recovery.
“This recession has drifted wealthy and low-income Americans further apart, and the increasing demand for vacation homes during the pandemic is a perfect example of their uneven financial footing, with some people buying second homes and others unable to buy their first. Daryl Fairweather, Redfin’s chief economist, said. “Home prices only continue to rise. This is a good thing for Americans who already own a home because they can use their increased equity to buy other assets, which in some cases includes another home. But it’s bad for lower and middle class families, especially those who are renters, because the barrier to home ownership is getting higher and higher. “
Property prices in seasonal cities, where these second homes are often located, are higher than property prices in non-seasonal cities. The median sales price for homes in seasonal cities rose 19 percent annually to $ 417,000 in February. This is the eighth consecutive month of growth of more than 10 percent year over year.
By comparison, the median retail price for homes in non-seasonal cities rose 16 percent to $ 370,000. For this analysis, a seasonal city is defined as an area where more than 30 percent of the housing is used for seasonal or recreational purposes.
Email Kelsey Ramirez