After declines in Q2 and Q3 of 2021, the percentage of second-home transactions in the US saw an upturn in Q4, reaching 5% of total market share, according to newly released data.
While 5% may not seem like a substantial portion of the market, it is important to note mortgage lenders issued a whopping $1.61 trillion in purchase loans through the entirety of 2021, based on estimates by the Mortgage Bankers Association.
The second-home data, collected by second-home marketplace provider Pacaso, found most markets with the largest year-over-year increases in second-home mortgage rate
locks were located in the Southeast portion of the U.S., with 43 of the 50 counties tracked having witnessed double-digit price growth.
Mono County, California, which borders Yosemite National Park, topped the charts in terms of price hikes, with a median purchase price of $790K, up an astonishing 83.7% compared to a year ago.
Growth abound, Q4 numbers are still not as high as the first quarter of 2021 when the housing market was still riding pandemic highs. At the time, the percentage of second-home mortgage rate locks hit an all-time national peak and rose to 5.7% share of all mortgage-rate locks across the U.S.
Pacaso CEO Austin Allison noted in April of last year that buyers took a pause to see how things would shake out in what everyone hoped would be a post-pandemic reality. For some, that also meant going back to the office, and perhaps not coincidentally, second-home sales started to slow, Allison added.
Now, however, a growing trend in “vacation-destination-adjacent” locations is picking up speed in the realm of second-home buying. Less traffic, quieter settings and more affordability are the likely catalysts for these second-home hotspots.
For example, Sumter County, Florida, nestled inland between Orlando and Tampa, saw the largest national increase in second-home rate lock transactions, with a 65% year-over-year increase.
St. John’s County in Florida, which boasts cities in between Jacksonville and Daytona Beach also saw an increase in transactions, with second-home mortgage rate locks up 9.7% year over year in Q4.
“If established second-home destinations are like Broadway, these emerging nearby destinations are like Off-Broadway, and their moment in the limelight – or the sunshine – is coming,” Allison said.
Of course, not all areas experienced heated growth. Atlantic County, New Jersey, home to Atlantic City, saw the biggest annual declines in second-home median sale prices, down 14%. New Jersey has been particularly susceptible to foreclosures, and according to Attom data, New Jersey counties had the third-highest amount of foreclosures in the country in Q4 (1 in every 1,288 units).