According to an AP News article, luxury second home transactions increased 25% during the second quarter of 2022 alone. And perhaps even more impressively, luxury second home sales have increased a whopping 235% since the beginning of 2020.
Rather than living in a primary home full-time, many of today’s affluent buyers are seeking to purchase secondary homes. As a luxury real estate professional, this is welcome news; by understanding a little more about this trend and where the hottest luxury real estate markets for secondary homes are, you can help incorporate these markets into your real estate practice.
WHY ARE SECONDARY HOMES GAINING POPULARITY?
There are many reasons as to why secondary homes are suddenly becoming more popular among the affluent. For starters, many people are looking to add a second home to their portfolio of assets. In fact, 70% of people who have more than $5 million own a second home.
Even as interest rates rise across the board, affluent clients tend to be better insulated from these economic impacts. As a result, they’re less likely to be deterred by other luxury real estate market influences — and so demand for secondary luxury properties remains strong. In fact, many affluent buyers are even purchasing secondary homes as a means of placing their wealth in a more stable place than the current stock market.
All of this is combined with the fact that the COVID-19 pandemic led many to reevaluate their work-life balance. Many people living in the hustle and bustle of the city enjoyed the slower pace of things during pandemic-related shutdowns. Now that things are (mostly) reopened, people continue to seek that balance by spending more time with family and more time away from city life. And of course, those with enough money to do so are living out the best of both worlds by purchasing properties both inside and outside the city.
WHERE ARE THESE HOMES LOCATED?
So, where are some of the hottest locations to purchase a second home in today’s luxury real estate market? You might actually be surprised. For example, the Nashville market is one of the hottest in the country. When you think about it, however, it does make sense, particularly since many homes in this area tend to offer plenty of land and outdoor space while not being too far away from the city itself.
Some other areas with the strongest luxury second home sales (according to AP News) include:
- Kitsap County, WA
- Charleston County, SC
- Orange County, FL
- Heber, UT
It seems as though those purchasing secondary luxury homes are mostly focused on finding locations that offer year-round activities, as well as access to nearby beaches. These areas also tend to be close to larger cities while still being away from the hustle and bustle of it all. Properties in these areas also tend to offer more land, which is another feature many affluent buyers are looking for in a second home. This is especially true if they already live in a busy city where there isn’t as much space to spread out.
HOW CAN YOU TAKE ADVANTAGE OF THESE TRENDS?
As secondary luxury real estate markets see an increase in interest, you may be wondering which steps you can take to capitalize on these trends. The good news is that you can take advantage of these trends even if you don’t live in an area where there is currently a huge demand for secondary homes; the key, as always, is to build strong referral relationships with other luxury real estate professionals in these specific luxury real estate markets.
Referring your clients to a trusted real estate professional who can help them in their process will strengthen your relationship and credibility with them. This can pay off many times over if and when a client is looking for a primary or secondary home in your market.
Meanwhile, taking steps to familiarize yourself with ever-changing secondary luxury home markets is a must. This includes being familiar with some of the top luxury real estate markets for secondary homes (as covered above), even if you’re not actively selling there.