US vacation home sales are rising during the COVID-19 pandemic led by Southwest Florida

Smart real estate investing is about accurately predicting future events, even if current circumstances indicate risk.

Despite a virtual shutdown in the first six weeks of the pandemic in 2020, the U.S. housing market got back into action with an unleashed glut of demand. Since then, things have been in full swing with rising property sales prices and fierce competition for a limited supply of existing properties.

One of the most interesting developments in the last year was the sharp sale of existing properties that are to be used as holiday properties and destination rentals.

Research by the National Association of Realtors found that vacation home sales grew 16.4% from 2019 to 2020, while the share of vacation home sales in total existing home sales increased from 5% in 2019 to 5.5% .

This year the pace of vacation home sales was even more dramatic. From January to April 2021, vacation home sales shot up 57.2% year-on-year and the share of vacation home sales in total existing property sales rose to 6.7%.

In perspective, the sale of existing properties increased by a total of 5.6% from 2019 to 2020 and by 20% in the first months of 2021 compared to 2020.

The most popular place for vacation home sales was Lee County on the Gulf Coast in southwest Florida. This property category accounts for 23% of the county’s housing stock and is an affordable option with an average sales price of $ 247,000. Lee County home sales increased 10% in 2020 and the average sales price increased 12.3%, according to the NAR .

Collier County, also in southwest Florida, also saw an increase in home sales last year. The home of Everglades National Park, Naples Zoo, and Bird Garden, home sales rose 4.6% and the average sales price rose 10.2% to $ 314,000.

The NAR survey found that vacation homes in the US – those with a high proportion of such homes in their housing stock – outperformed non-vacation rental countries in both sales pace and price increases.

In the counties with vacation home, beaten home sales rose an average of about 24.2%, compared to 11.2% in the counties with no vacation home during the pandemic. The analysis covered 145 holiday home districts and 1,060 non-holiday home districts.

Other popular places for vacation homes during the pandemic include counties in Michigan, the Carolinas, Massachusetts, New York, and Maryland. The top 1% of vacation rental counties included in the analysis were in 16 states.

The study also found that increasing numbers of vacation home buyers were making cashless transactions to complete. That number rose to 53% of all holiday home purchases from January to the end of April this year. In recent years this number has been around 50%. And compared to all sales of existing properties, only 22% of the purchases were pure cash transactions in the same period.

How is this preference for vacation homes to be understood in times of great uncertainty?

“Vacation rentals are a hot commodity right now,” said Lawrence Yun, chief economist at NAR. “With many companies and employers still offering workers the option to work remotely, vacation rentals and second homes will remain popular choices with buyers.”

There also seems to be a growing awareness that these properties will serve a dual purpose as an asset. They can be used or rented at the owner’s discretion to cover the mortgage and expenses.

For those looking to rent their homes, the bet is that the American vacation appetite will be strong in the years to come. After a long time at home, the resurgence of short breaks and sightseeing offers the opportunity in the right markets to turn a property into a revenue generator in addition to a long-term investment and take on the management and marketing of the property can be handled with grace.

Whether this trend continues as the worst of the pandemic recedes and more new homes hit markets across the country will be an interesting look. Watching how these counties fare and how well these investments pay off for buyers will go a long way in establishing the wisdom of investing money in vacation property.

The Americans have rushed back to the airports faster than the airlines expected as the floodgates to society are reopened. In the short term, holiday homes give buyers every reason to trust their flexibility.

See similar https://www.phillyvoice.com/greg-englesbe-reale-estate-vacation-home-sales-soar-us-during-covid-19-pandemic-led-southwest-florida-0599945/

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