Second-home destinations saw YOY price surges in April, with four of the five most popular areas seeing more than 25% growth, Redin reported.
While average rental prices increased 10% in areas not considered second-home destinations by Redfin, prices rose by 17.1% in vacation hotspots to $1,893.
Redfin found a similar trend in the for-sale market, with the typical home in second-home markets selling for $516,423 in April, up 19.9% YOY and a new record. Prices in non-second-home markets increased by 14.8%.
Phoenix, Cape Coral, FL, Naples, FL, Myrtle Beach, SC, and Las Vegas– the top five destinations for second homes– saw significant increases in both rental and home-sale prices. All but Myrtle Beach experienced rent growth above 25% YOY, and all five saw sale prices rise by at least 25%.
“The popularity of vacation towns has sent housing costs through the roof, making it harder for many locals to afford living in their hometowns,” said Redfin Deputy Chief Economist Taylor Marr.
“The second-home boom is ending as many vacation home buyers are priced out of the market due to historically high prices and high mortgage rates, but those same factors have already pushed locals to the sidelines. Locals in popular beach towns and vacation spots have spent the last two years competing for a limited number of homes with wealthy second-home seekers, and often losing.”
Popular cities for pandemic migrants are also experiencing more inflation than less-trafficked areas. Many Americans adapting to remote work moved to the Sun Belt during the pandemic, drawn by its relative affordability. Now it’s seeing the highest rates of inflation.