Vacation Housing Markets Trending Higher with Buyers Amid Pandemic

Vacation Housing Markets Trending Higher with Buyers Amid Pandemic

Vacation News » Key West Edition | By Michael Gerrity | October 14, 2020 9:00 AM ET

Based on new data from Zillow, impacts from the coronavirus pandemic have rippled out to traditional U.S. vacation destinations, which are seeing increased interest from homebuyers as shifting priorities and preferences transform where and how people want to live.

Page views on Zillow of for-sale listings are up nearly 50% from a year ago in metro areas typically considered vacation destinations, defined as metros with at least 65,000 people and five times more vacation homes than the U.S. as a whole. That's compared to a 37% increase in page views nationally.  Vacation metros seeing an uptick in demand include places like the Jersey Shore area, Myrtle Beach, S.C., Key West, Fla., Lake Tahoe, Nev., Cape Cod, Mass., and Park City, Utah.

Newly pending home sales are also climbing in many of these vacation markets, with 90 percent of the markets analyzed experiencing growth and half up at least 30% from last year. Places like Salisbury, Md. (near Ocean City), Traverse City, Mich., located along the shores of Lake Michigan, and Brainerd, Minn., a forest and lake region along the Mississippi River, were among areas following this trend. Those three areas all saw year-over-year pending sales increases of more than 30%.

"As millions of office workers transitioned to working from home during the pandemic, many of them reconsidered where they might like to live now that the commute no longer mattered," said Zillow senior economist Jeff Tucker. "Vacation towns beckoned to many buyers, offering natural amenities like proximity to the ocean and mountains, along with robust retail and restaurant industries to serve traditional seasonal visitors. It's too early to tell how many of these new vacation town home buyers are moving permanently or planning to return after the pandemic -- they may not even know yet themselves -- but owning a second home in a traditional vacation area provides a lot of long-term flexibility."

It's not just page views and home sale growth that are up in those hot vacation spots. Homes for sale in those metros also are seeing more "favorites" on Zillow, which is a way for people to catalog listings so they can return to or share them with someone later. Zillow research has shown highly-saved homes sell faster and for more money.

Listings for homes for sale in Key West, for example, are saved 8.7 times more often than listings nationwide. In Hilton Head and the Poconos, listings see more than five times the typical share of favorites. The next four vacation areas with the highest share of favorites are all in Florida -- Panama City, Naples, Fort Myers and Punta Gorda all seeing at least three times more favorites than the nation at large.

"The recent spike could be due to international travel restrictions and the ability to work and school from home," said Tommy Mack, a Best of Zillow Premier Agent with Coastal Collection Real Estate in the Florida Keys. "I have many new clients who say they've always wanted to move here and now they can because of changes in day-to-day life from Covid."

Vacation spots in the Northeast also are heating up. Ocean City, N.J., on the Jersey Shore, has the highest share of vacation homes, at almost 50%. It also sees more than twice the rate of listing favorites as the U.S. average, and pending home sales are up 38.1%. East Stroudsburg, Pa., in the Poconos region and well-known for its natural scenic beauty, saw a 90% increase in page views -- with home values expected to grow 5.6% in the next year, compared with 4.9% throughout the state.

The ability to work remotely allowed Emily Rush, a 27-year-old project manager for a market research firm near Philadelphia, to buy her first home in Ocean City, Maryland.

"I love the beach and I would rather be here," said Rush, who used to spend her summers vacationing in Ocean City. "Since I can successfully work remotely, I wanted to live in a place where I can disconnect after work. I feel more relaxed near the water and that's allowed me to have a better work-life balance while working from home. It also felt like a safe investment because if I eventually return to the city, I will still have a great rental property or vacation home."

Close proximity to a beach, lake or ski area is a common theme among the top 5 hottest vacation areas accumulating the most Zillow favorites, including Cape Cod (No.2), Brainerd, Minn. (No. 3), Park City, Utah (No. 4), and Naples, Fla. (No. 5).


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