Now is not a good time to buy a home if you’re looking for a steal. It is definitely a seller’s market. But guess what? It’s not just primary residences that are hot right now. Vacation homes are equally hot. And in fact, Americans are buying vacation homes in record numbers.
According to the National Association of Realtors, vacation home sales were up by 16.4% in 2020. If you think that’s good, consider 2021. Through April 2021, vacation home sales demonstrated a 57.2% increase over the same period the year before. That is a lot of homes being sold, from Florida’s sunny shores to the beautiful mountains of Utah.
So why are so many Americans opting to purchase vacation homes? Here are five possible reasons:
1. COVID Pandemic Fallout
One of the reasons often cited by the mainstream media is fallout from the COVID pandemic. As the thinking goes, people are tired of being stuck at home. They are also wary of traditional travel involving airplanes and hotels. Yet they still want to get away on vacation. Their solution is a vacation home.
2. Attractive Interest Rates
Interest rates on home mortgages have been very attractive for more than a decade, thanks to the 2008 housing crash that ushered in the Great Recession. Any thoughts of raising rates in recent years were put on hold as a result of COVID’s economic damage. Yet we all know that low interest rates will not last forever.
It is quite possible that the Biden administration will work to force rates upward in order to stimulate positive inflation. If they do, buying a vacation home will only get more expensive. For now, interest rates remain low enough to make buying a second home a possibility for many.
3. The Rise of Remote Work
Sparano + Mooney, a Park City, Utah architectural firm that specializes in mountain modern architecture, says they have been designing a lot of vacation homes for clients looking to work remotely for longer periods of time. And why not? If you are no longer required to go into the office, why not work from an idyllic location that allows you to mix work with whatever you like to do for leisure?
Imagine owning a Park City ski lodge of your very own. You hit the slopes for an hour in the morning, then return home to work. Eight or nine hours later, you grab a quick bite to eat before heading out to enjoy some night skiing. In between, you’re working in an office with windows that afford you a magnificent view of the slopes.
4. Possible Rental Income
Vacation properties are also hot right now because they offer the possibility of rental income. If you only use your home eight weeks out of the year, you have another 44 weeks to generate income from it. That makes a vacation home as much an investment as a leisure property.
5. Your Own Piece of Paradise
One final reason people might be investing in vacation homes is a desire to have their own piece of paradise. Let’s face it, the last 17 months have not been all that pleasant. People are starting to rethink what is important to them. Many are discovering that life is too short to be obsessed with things that don’t matter. And for some, what matters is having a piece of paradise where they can spend quality time with family.
Vacation homes are hot right now, that’s for sure. Will they stay hot forever? No. Real estate is cyclical. But for now, the cycle is on an upswing.
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