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It’s not just puppies and sourdough starter. Another thing that spiked during the pandemic: the purchase of vacation homes.
Housing markets across the country heated up during the COVID-19 pandemic, but demand for vacation homes, including in Colorado, sizzled, according to a new study from the National Association of Realtors. Remote workers who were able to log on from anywhere snapped up homes in vacation areas, sending seasonal home purchases skyrocketing last year. Vacation home sales rose by 16% in 2020 from the year before, outpacing overall growth in existing-home sales last year which was 5.6%, according to a report from the National Association of Realtors. And the trend has continued into this year with sales already up 33% through April over last year.
“Vacation homes are a hot commodity at the moment,” said Lawrence Yun, NAR’s chief economist. “With many businesses and employers still extending an option to work remotely to workers, vacation housing and second homes will remain a popular choice among buyers.”
While the pandemic all but shut down home sales in March and April of last year, the market made a sharp rebound in the second half of 2020, making it the hottest year for real estate since 2006. But the market was even hotter in counties considered second-home destinations, according to the report.
Prices in vacation home counties rose at a faster pace than in non-vacation home counties in 2020, largely because of the low inventory and strong demand. The median existing home sales price typically rose by 14% in vacation home counties, compared to 10% in non-vacation home counties last year.
But apparently buyers were prepared — with cash. People buying vacation homes were more likely to pay cash. While all-cash sales are increasing throughout the residential market, over half of all seasonal purchases this year though April were all cash, compared to 22% of all existing home sales over the same period.
“Realtors all over the country have indicated that buyers in a position to pay in all cash are doing just that,” said Yun. “From a seller’s perspective, paying in this manner makes for a much more attractive offer given the strong demand right now for vacation homes.”
These markets still tend to be incredibly competitive amid record low inventory nationally. As of April, the inventory of available homes was down 21% from a year ago, which is equivalent to just 2.2 months of supply given the monthly pace of demand. A balanced market needs six months of supply.
[Some excerpts by By Anna Bahney, CNN]