You’ve been thinking about buying a vacation home for a while, but you’re not sure whether now is the right time to buy. This is a big purchase, so you want to make sure it’s a sound investment.
Advice: 25 Things To Sell When You’re Ready To Retire
Find: 6 Household Staples That Are a Waste of Money
Demand for vacation homes tumbled in February, with mortgage-rate locks for second homes declining to their lowest levels since May 2020, according to Redfin. Demand was still 35% higher than pre-pandemic levels, but there was a notable decline from the 87% increase realized one month earlier.
Some parts of the U.S. are more affordable to buy vacation homes than others. According to a recent Realtor.com study, these 10 cities are the best choices for a second home right now:
- Branson, Missouri
- East Stroudsburg, Pennsylvania
- Whitewater, Wisconsin
- Myrtle Beach, South Carolina
- Cullowhee, North Carolina
- The Villages, Florida
- Lake Havasu, Arizona
- Salisbury, Maryland
- Claremont, New Hampshire
- Sevierville, Tennessee
POLL: Do You Think Student Loan Debt Should Be Forgiven?
Cash Is King in Vacation Market
Geordie Romer, managing broker at Windermere Real Estate/NCW, based in Wenatchee, Washington, said demand for vacation homes is also extremely high in his local area, despite increased fears of inflation and rising interest rates.
“Our inventory of homes listed for sale remains at historic lows, which, coupled with massive demand, continues to lead to soaring price increases,” he said. “The average home price went up 13% here in 2021, and I expect we may see numbers much higher than that in 2022.”
He said some analysts are using mortgage demand as a proxy for homebuyer demand, but that isn’t helpful in the vacation home market.
“Cash buyers are a huge percentage of the buyers in a second-home market, and a lack of mortgage originations doesn’t mean much to me,” he said. “In a similar vein, rising interest rates will not affect the buyer pool very much, since financed homebuyers are often outbid by cash buyers in our hypercompetitive market.”
Ultimately, he said whether or not this is a good time to buy a vacation home depends on your local market, but he expects buyers looking for deals to be sorely disappointed.
‘Don’t Wait Too Long’
Zachary Staruch, a real estate agent with The Pelican Team, based in Southwest Florida, said he sees a lot of second-home buyers in his area — both as vacation and retirement homes.
Warning: 10 …….