Second-home mortgage-rate locks hit 5.7% early last year before dropping, then bouncing back to 5%. The top market? Fla.’s Sumter County with a 65% increase.
SAN FRANCISCO – The percentage of second-home mortgage-rate locks hit its highest recorded level in the first quarter (Q1), with the share of transactions reaching 5.7%, according to the Pacaso Second Home Market Report, a company focused on second-home sales. In the next two quarters, however, the percentage decreased to 4.6% (Q2) and 4.5% (Q3).
Second-home sales rebounded in the final quarter of 2021, though, reaching 5%.
Pacaso’s report looks at data on property use and mortgage rate locks in counties whose percentage of seasonal homes and median home values are at or above the top 20th percentile.
Pacaso CEO Austin Allison thinks people “stopped to take a beat” in the second quarter to see what a post-pandemic recovery would actually look like – notably whether they’d have to return to their offices. “But these last few months, many employers finally decided to make remote work more permanent,” she says. “This seems to have spurred renewed interest in second-home ownership.”
Florida counties top list of second-home markets
Most markets with large year-over-year increases in second-home mortgage-rate locks were located in the Southeast U.S. In Florida, Sumter County saw the largest national growth spurt with a 65% year-over-year increase.
“For the past year, we’ve been tracking up-and-coming second-home hot spots,” says Allison. “Sumter is a perfect example of the kinds of locations we call ‘vacation-destination-adjacent’ that have been catching our eye. If established second-home destinations are like Broadway, these emerging nearby destinations are like Off-Broadway.”
Florida’s St. John’s County also saw an increase in transactions, with second-home mortgage-rate locks up 9.7% year-over-year in Q4. One of the county’s notable cities is St. Augustine, known for being the nation’s oldest city, with historical landmarks and cobblestone streets that date back to the late 1500s.
Overall, Florida has seen “more significant development” than any other area, but it hasn’t seen the highest price increases. In 43 of the 50 counties Pacaso tracks, prices increased by double digits in 2020.
Mono County, California, which borders Yosemite National Park, topped the charts in terms of price growth, with a median purchase price of $790,000, up 83.7% year-to-year. On the flipside, Atlantic County, New Jersey – home to Atlantic City – saw the biggest 2020 price drop for second homes with a decline of 14%.
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