The market for vacation homes has caught fire in counties nationwide, as sales of vacation properties have risen 16 percent since 2020 — nearly tripling the gains delivered by existing homes, which were up 5.6 percent according to the National Association of Realtors.
That push, according to Bloomberg, comes as yet another effect of the work-from-home shift on display since the COVID-19 pandemic kicked off 16 months ago and workers relocated from office spaces in major metros to office spaces in their private homes from which they could log in remotely.
And once they began logging in remotely, reports indicate, city-dwelling consumers with means realized they could do so just as well, if not better, from Aspen, Martha’s Vineyard or Miami Beach. And as those urban buyers have flooded in, vacation-home counties have seen median sale prices spike, up 14 percent according to an NAR report out last week, compared with a 10 percent lift in non-vacation counties.
“Vacation housing and second homes will remain a popular choice among buyers,” said Lawrence Yun, chief economist for the National Association of Realtors.
Limits On The Vacation Home Boom
A popular choice, but one that is perhaps going to ultimately end up being limited. An analysis by Redfin Corp. showed that while purchases last month were elevated from year-ago rates, they had cooled from the frenzied levels seen in certain markets that saw massive spikes at various points in 2020. Crystal Bay, Nevada, in one example, saw its price per square foot soar by 72.2 percent. Similarly, Aspen, Colorado saw prices per square foot increase 31.9 percent, while Chilmark, Massachusetts on Martha’s Vineyard saw a 30.6 percent bump.
Moreover, the spike has created tensions in local communities , such that vacation communities like Nantucket are now considering local restrictions like Article 90, a proposal to significantly reduce the number and duration of short-term rentals on the island. That rule went down in a public vote, but most agree the issue will keep resurfacing in places like Nantucket as long as the tourism boom continues — fueled by workers who can set up shop just about any place they have an internet connection.
The Bigger Shift WFH Has Created
Moreover, the sudden spike in vacation property values is a small strand of a larger story of the changes the shift to work-from-home by the white-collar workforce has wrought in the last 16 months, and which of those changes are likely to stay around when office buildings re-open for business and workers start getting back to their desks.
Will consumers return to the weekly trek to the grocery store, as had been their pre-pandemic custom? According to PYMNTS research, some will, but many won’t and those who don’t will be the highly desirable millennial consumer demographic who represent what the future of shopping will look like.
PYMNTS consumer studies on the grocery shopping habits of U.S. consumers demonstrate that while roughly 80 percent of consumers report they still go to the grocery store to buy their food some 20 percent of consumers are now buying more of their groceries online than they once did in the physical store. And of those digital shifters, 60 percent are millennial and bridge millennial cohorts whose spending power supermarkets want to capture and grow. Moreover, further PYMNTS data has demonstrated that, no longer tethered to a 9-to-5 work schedule, 62 percent of consumers who are grocery shopping in stores less often than they did before the pandemic say they do not want to return to physical shopping as much as they did before the pandemic began.
And, looking over the data more broadly, workers aren’t all that excited to be going back. Consumers who are working from home have increasingly grown to like it as time has gone on, and have become less interested in ever getting back to their physical workspaces. Seventy-nine percent of remote workers said they do not want to return to a physical office, placing it statistically behind seeing friends, traveling internationally and shopping in a grocery store on the list of things they are eager to resume doing when asked earlier this year.
Which means the real estate boom home-based workers have set off in the last 16 months may cool. But the shifts created by the WFH economy may more broadly may be with us for some time, particularly if the shift back to the office ends up being much slower and less robust than it was once expected to be.