Vacation Home Demand Soars During the Covid-19 Pandemic
Home sales are booming in popular vacation spots, as the pandemic leads more Americans to seek places to work or relax within driving distance of home. In traditional vacation destinations such as Key West, Fla., Ocean City, N.J., and Traverse City, Mich., online house shopping and pending sales are up relative to the country overall, according to a new analysis by Zillow Group Inc. Similar to the recent rise in interest for suburban and rural homes that are a car ride from major cities, the growth in demand for homes in vacation towns shows how Covid-19 is reshaping home shoppers’ priorities, said Jeff Tucker, senior economist at Zillow.
“Home shoppers are particularly motivated to shop for a home in these markets because right now they have the freedom to probably work from home in many cases and even have their kids go to school from home,” he said. “They would get a lot more time to actually enjoy the natural amenities in these locations.” In the 20 U.S. metro areas with the highest share of vacation homes, page views of for-sale listings on Zillow in August rose more than 50% from a year earlier, while nationwide page views rose 37% in the same month.
In 12 of those markets, including Hilton Head, S.C., and East Stroudsburg, Pa., in the Poconos region, pending sales in the week ended Sept. 26 were up more than 30% from a year earlier. Nationally, pending sales rose 22% year-over-year in the same week, Zillow said.
The pandemic-driven recession has deepened the country’s economic divisions. Many higher-wage workers who are able to work from home can put money they would have spent on entertainment or international travel toward buying a home. Home sales around the country have risen to the highest level since 2006, buoyed by record-low interest rates.
Second or vacation homes are rising as a percentage of all mortgages. Mortgage-rate locks for second-home purchases made up 5.3% of all locks for purchases in the week ended Oct. 9, up from 3.9% at the start of the year and 4% in the same week last year, according to the American Enterprise Institute. U.S. home prices have risen 3.1% since February, according to Zillow. Some vacation spots have posted stronger gains, including Ocean City, up 6.4% in the same period, and Sevierville, Tenn., up 4.9%, according to Zillow. In the Panama City, Fla., metro area, Zillow page views in August were up 74% from a year earlier. Pending sales in the week ended Sept. 26 rose almost 24% year-over-year, Zillow said. “We’ve always been a drive-to destination, which during this pandemic has been vital for people” who want to travel while staying distanced from strangers, said Jonathan Spears, a team leader at Scenic Sotheby’s International Realty, which sells homes in the Panama City area. “We’ve never seen a market like this, and it’s specifically due to this pandemic.”
While some buyers are permanently relocating to the region, many are second-home shoppers who expect to rent out the homes part of the year, he said. - Wall Street Journal