Buying a vacation property became increasingly popular as people looked for somewhere—anywhere—to get away amid the pandemic.
Vacation homes accounted for 5.5% of existing home sales in 2020 and 6.7% of in the first four months of 2021, according to a monthly survey of transactions released Tuesday by the National Association of Realtors. As shown in the chart below, that’s a noticeable jump from what had been a fairly steady trend in earlier years and is probably because people able to work from home have looked for a retreat during the pandemic, according to the group.
"Vacation homes are a hot commodity at the moment," said Lawrence Yun, NAR's chief economist, in a statement. "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."
People looking for vacation homes have created more competition for the few homes available. Residential real estate has been in high demand during the pandemic, as the desire for more space and low interest rates on mortgages helped deplete inventory and caused home prices to shoot to record highs. Some buyers have opted to waive the home inspection, make all-cash offers, or bid above list price, all in hopes of gaining an advantage.
People who buy vacation homes are more likely to pay entirely in cash at closing. In the first four months of 2021, 53% of vacation home purchases were all-cash, NAR said, compared with 22% of all existing-home sales.
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