Luxury Second-Home Markets Surge Despite Rising Prices
Despite the challenges of increasing home prices and mortgage rates, second-home investors are flocking to select vacation real estate markets across the United States. Online marketplace Pacaso has recently highlighted a selection of counties in New Jersey, Florida, and Massachusetts as emerging leaders in the luxury vacation home sector.
Top Counties for Luxury Second-Home Sales
Pacaso’s latest report identifies the top 20 counties for luxury home sales nationwide. Rankings are based on an index score, which considers the proportion of second-home sales to primary home sales from 2023 to 2024. The analysis excludes counties with fewer than 50 mortgage rate locks for second homes and focuses on areas with average prices exceeding $700,000, with expectations for further growth.
Leading Markets
The report showcases the following top five markets:
-
Cape May County, New Jersey
- Ratio of 150% second homes to primary homes
- Average price: Approximately $1.1 million
-
Gulf County, Florida
[link-whisper-related-posts]- Ratio of 77.7%
- Average price: Just over $1 million
-
Walton County, Florida
- Ratio of 67%
- Average price: About $1.44 million
-
Barnstable County, Massachusetts
- Notable entry among luxury destinations
- Collier County, Florida
- Ratio of 52.9%
- Average price: Approximately $896,000
Expert Insights
Austin Allison, CEO and co-founder of Pacaso, remarks on the diverse nature of luxury vacation home markets:
“The destinations on this year’s list really capture the breadth of the luxury vacation home market. Legacy destinations remain as timeless as ever, Florida’s panhandle is solidifying its status as a favorite for vacationers, and Manhattan is resurging as a place where buyers are doubling down on second-home investments.”
Allison emphasizes that these properties are "not just weekend getaways anymore" but significant lifestyle investments, enabling families to create lasting memories.
Market Trends and Mortgage Rates
Mortgage rates appear to be stabilizing, with purchase mortgage applications reaching their highest levels since January. Increased inventory is also encouraging more transactions, signaling:
- Stronger demand for primary and secondary homes
- Growth anticipated into 2025
Noteworthy Highlights
- Cape May County witnessed a dramatic shift in popularity, moving up from the last position on Pacaso’s rankings just a few months earlier.
- New Jersey continues to be a strong contender for home equity growth, enhancing buyer capacity for investing in luxury real estate.
Florida’s Dominance in Second-Home Markets
Florida maintains a stronghold in the luxury second-home sector, boasting three counties in the top five. The allure of the Sunshine State remains significant for buyers:
- Gulf County and Walton County are solidifying their places as premier vacation destinations, with attractive ratios and average prices.
The increasing appeal of Collier County, with its reasonable average sales price, further complicates the luxury home buying landscape.
New York County’s Resurgence
The report also mentions New York County (Manhattan), which is witnessing a notable resurgence of investors looking to acquire luxury properties in a post-pandemic environment.
The Rise of Real Estate Co-Ownership
Pacaso has introduced an innovative model for real estate co-ownership, allowing multiple parties to invest in vacation homes. As Allison puts it:
“Co-ownership of luxury vacation homes is carpooling for second homes. Instead of having eight people buying up median-priced homes in a second-home community, you have eight people sharing a luxury home, creating more opportunities for the local workforce.”
Conclusion
As the luxury vacation home market evolves, investors are increasingly seeking properties that not only serve as weekend retreats but also as integral parts of their lifestyle. The trends in counties across New Jersey, Florida, and Massachusetts suggest a vibrant market poised for growth. Whether exploring the picturesque coasts of New Jersey or the sun-soaked sands of Florida, buyers have a wealth of options to consider.
For further insights and detailed market analysis, visit Pacaso and keep abreast of the evolving trends in luxury real estate.