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Luxury co-ownership company Pacaso has released research on the most active second-home markets for 2022.
In an announcement sent to Inman, the company shows that a one-time remote county in southern Utah’s high desert experienced the most number of mortgage rate locks for second homes. Washington County saw a year-over-year jump of 10.3 percent, Pacaso said, followed by Osceola County, Florida, at 6.1 percent, remarkably the geographical opposite of the top performer.
Sunny, red rock-strewn Washington County is home to Zion National Park, as well as a number of other notably scenic state parks and recreation lands. St. George, Utah, another rapidly growing metro along Interstate-15, connecting Los Angeles and Las Vegas to Salt Lake City, is also in Washington County.
“Despite a national cooling in residential real estate, we’re finding that the luxury real estate market is still in a league of its own,” said Pacaso CEO and co-founder Austin Allison in a press release. “We’ve continued to see luxury sales volume growth in many top destination communities across the U.S.”
Following Osceola County is Nevada County, California, which stretches into the ski communities of Truckee and North Lake Tahoe at 4.5 percent growth and Indian River County, Florida, at 2.8 percent. Napa County, California, rounds out the top five fastest-growing second-home regions at just over 2 percent year-over-year growth, according to Pacaso.
Pacaso arrived at its findings using second-home mortgage rate lock data across the U.S., an indicator of second-home buying activity. It surveyed activity from Jan. 1 to Dec. 6, 2022, including only markets with 50 or more second-home transactions and a share of second-home mortgage rate locks at or above 10 percent.
Destination markets for second homes are clearly being more defined of late by active lifestyles as opposed to places characterized by classical retirement tropes, such as golf and static lifestyles. Southern Utah is highly regarded as a global mountain biking and rock climbing destination, as California’s Lake Tahoe region is known for skiing.
However, many of 2022’s most popular second home markets are familiar to Pacaso, according to Allison.
“What’s interesting here is that many of the counties that saw the largest year-over-year shift toward second home buying activity this year are already regarded as luxury top second home destinations,” he said in the announcement. “Places like Napa, Kauai, and New York City all made the list this year. More modest price growth, and perhaps even price drops in some markets, could be contributing to some buyers turning again to these established locations to find the second home of their dreams.”
Pacaso largely pioneered the formalization of co-ownership. Despite the purchasing model being around for decades, it ultimately lacked a coherent long-term benefits explanation or ideal market in which to thrive. Pacaso sells up to eight shares in the majority of its homes, pays cooperating agents three percent commissions and equity bonuses and has partnered with a number of local third-party service providers to assist its owners.
It introduced a co-ownership certification program for agents this year and also partnered with a number of notable brokerages to promote the model.
Even though the housing market has experienced a turbulent year, resulting in a large number of layoffs throughout proptech and brokerage including Pacaso, the company remains confident in the market’s interest in second homes, largely because of its buyers.
“It’s just not the whiplash-inducing lightning-speed growth we saw throughout much of 2020 and 2021,” Allison said in the announcement. “High-net-worth buyers are not as reliant on financing, so they might be less deterred by rising rates, and we hear a lot from our buyers that they don’t want to wait for perfect market conditions, they are ready to enjoy the benefits of a second home now.”
