The COVID-19 pandemic appears to have inspired more people to look at buying a vacation home, according to a new analysis of mortgage data by the online real estate brokerage Redfin.
In its analysis, Redfin found that mortgage applications for second homes jumped by 84% in January, compared to one year ago. And in September 2020, they surged by 118% year over year.
Taylor Marr, an economist at Redfin, said that although demand is down slightly in January from its peak last fall, the fact that there were nearly twice as many applications for a second-home mortgage as there were in the year before means that this is no fad.
“Many Americans have realized remote work is here to stay, allowing some fortunate people to work from a lakefront cabin or ski condo indefinitely,” Marr said.
The annual rise in second-home applications is more than double the increase in applications for primary homes, according to Redfin’s analysis. That has led to a rapid increase in the prices of homes in vacation hotspots, with many towns and cities seeing double-digit yearly growth. The high prices are partly due to the limited inventory of homes for sale in those places, Redfin said.
Jaime Moore, a Redfin real estate pro in Las Vegas, said that the desire for vacation homes there is as strong as ever. The problem, she said, is that inventory is so low that fewer people are actually able to find a home that meets their needs and budget, submit an offer and then apply for a mortgage on it.
“The market is still highly competitive, and almost all the buyers are people from the San Francisco area purchasing their second home,” Moore said. “The only time I see a buyer looking to purchase a primary residence is when they already live here in a rental, and they’re looking for something more permanent.”