U.S. vacation home sales soar during the COVID-19 pandemic led by Southwest Florida
To make a wise real estate investment is to accurately predict future events, even if the current situation points to risk.
Although it was almost closed in the first six weeks of the 2020 pandemic, the US real estate market has resumed operations due to excess demand.Since then, it has been in high-speed operation, with home
Soaring sales prices and fierce competition
Used in existing houses with limited supply.
One of the most interesting developments in the past year has been the surge in sales of existing homes used for vacation properties and destination rentals.
National Association of Realtors
It was found that vacation home sales increased by 16.4% from 2019 to 2020, while the share of vacation home sales in the total sales of existing homes rose from 5% in 2019 to 5.5%.
This year, the pace of holiday home sales has become even more noticeable. From January to April 2021, vacation home sales increased by 57.2% year-on-year, and the share of vacation home sales in total existing home sales rose to 6.7%.
From a perspective, from 2019 to 2020, existing home sales increased by 5.6% as a whole, compared with 2020, the first few months of 2021 increased by 20%.
The most popular holiday home sales locations are Li County, Located on the Gulf Coast of southwest Florida. This type of property accounts for 23% of the county’s housing stock, with a median selling price of $247,000, making it an affordable option. According to NAR data, house sales in Li County increased by 10% in 2020, and the median sales price increased by 12.3%.
Collier CountyAlso in southwestern Florida, there was a surge in home sales last year. Home sales in the Everglades National Park, Naples Zoo and Bird Park increased by 4.6%, and the median sales price climbed 10.2% to $314,000.
NAR research found that vacation home counties in the United States—counties with a high proportion of such houses in the housing inventory—are superior to non-vacation home counties in terms of sales speed and price appreciation.
In vacation home counties, second-hand home sales increased by an average of about 24.2%, while during the pandemic, non-vacation home counties increased by 11.2%. The analysis included 145 vacation home counties and 1,060 non-vacation home counties.
Other popular locations for holiday homes during the pandemic include the counties of Michigan, Carolina, Massachusetts, New York and Maryland. The top 1% of vacation home counties in the analysis are located in 16 states.
The study also found that more and more holiday home buyers are making all-cash transactions at the end of the transaction. From January to the end of April this year, this figure rose to 53% of all holiday home purchases. In the past few years, this number has been hovering around 50%. Compared with all existing home sales, only 22% of purchases in the same period were all-cash transactions.
In a period of uncertainty, how do we understand this preference for holiday homes?
“Currently, vacation homes are a hot commodity,” said Lawrence Yun, chief economist at NAR. “As many companies and employers are still providing workers with remote working options, holiday homes and second homes will continue to be popular choices for buyers.”
People seem to be increasingly aware that these properties will play a dual role as assets. Owners can use them according to their lifestyle, or rent them out to help pay for mortgages and expenses.
For those looking to rent out properties, they are betting that Americans’ interest in vacationing will become strong in the coming years. After being trapped at home for a long time, the recovery of vacation and tourism provides an opportunity in the right market. In addition to long-term investment, it can also turn real estate into a source of income, assuming that the management and marketing of real estate can be handled gracefully.
As the pandemic recedes most and more new homes are launched, whether this trend will continue will be an interesting perspective that deserves attention. Observing the performance of these counties and how these investments affect buyers will greatly help build the wisdom to invest cash in resort properties.
With the gates to society reopened, Americans returned to the airport faster than the airlines expected. In the short term, holiday homes give buyers every reason to be confident in their flexibility.