Demand for vacation homes declines
Demand for vacation homes slipped modestly in December, but remained 77 percent above pre-pandemic levels prior to March 2020, according to a report released Thursday from Redfin.
The December numbers were down from November 2021, which saw demand spike 80 percent from pre-pandemic levels, and down from their peak 0f 92 percent in January 2021 amid a huge pandemic-induced spike.
The numbers, however, were still up from a low point in August of 2021.
Interest in second homes hit record highs in mid-2020 as remote work became entrenched and wealthy Americans fled urban cores. Redfin attributed the December slowdown to the holiday season, rather than any longer-term slowdown in demand.
Home sale prices also hit a new record high in December, which could possibly be responsible for demand slowing down.
Redfin sourced their report using data using mortgage-rate lock data from the real estate analytics outfit Optimal Blue, creating a seasonally adjusted index that shows comparisons of second-home demand before and during the pandemic.
Redfin Chief Economist Daryl Fairweather predicted that demand will remain high in the new year, with mortgage rates low for the time being and remote work remaining popular.
“The wealthy are still flush with cash and have access to cheap debt, which is why second home purchases remain far above pre-pandemic levels,” Fairweather said. “While interest in second homes is stabilizing after the big boom in the second half of 2020 and the beginning of 2021, I expect demand to remain high well into this year. Remote work isn’t going anywhere and mortgage rates are still quite low.”