Demand for vacation homes in August fell 19.3% year-on-year, marking the third consecutive month of decline while demand for primary homes fell 1%, its second month of decline.
According to Lily Katz, data reporter at Redfin, just because the numbers are down year over year, it’s important to note that demand for second homes soared 172% during the pandemic and peaked in April. But as the market begins to seasonally cool, demand for primary and secondary homes has started to slow.
Chief Economist of Redfin Taylor marr said that although interest in second homes is lower than it was a year ago, it remains higher than before the pandemic and likely will remain so due to a permanent change in work from a distance. According to a recent report of the National Association of Real Estate Agents, vacation home sales accounted for 6.7% of all existing home sales in the first four months of the year, up 5% year-on-year.
The report also found that sales of existing homes typically increased 24.2% in vacation home counties, more than double the pace of 11.2%.
“The pandemic is not over, but the desire to escape is not as intense as it used to be. People are increasingly returning to normal life, children are returning to school and cities are coming back to life. “said Marr. “The housing market as a whole is still booming, but not as strongly as in the second half of 2020. Competition between homebuyers, migration and home sales growth have all slowed.”
The analysis used mortgage rate freeze data from Optimal blue, a real estate analysis company, to monitor the demand for primary and secondary residences. This data for this analysis was available because homebuyers must specify on a mortgage application whether it is a primary residence, secondary residence, or investment property.