MReport November 2020

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M REPORT | 57 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Vacation Spots Trending as Interest in Second Homes Surges The demand for second homes is at a five-year high. Here are some of the most coveted U.S. locations for buying vacation homes this year. A s interest rates have dropped to record- breaking lows and many Americans now find themselves being able to work remotely, there has been a sudden peak in demand for sec- ond homes and vacation homes. According to research conduct- ed by Point2Homes, second home buyers are looking into purchas- ing vacation homes at increasingly high levels this year. Demand for vacation homes has now reached a five-year high. Point2Homes discovered Google search trends revealing that terms such as "buying a 2nd/second home" and "buying a vacation home" have become more popular over the past few months. The report shows that interest in second homes and vacation properties grew by 235% above July 2019 and 103% over August of last year. Home prices had been on the rise just before the pandemic spread across the country, causing less interest in purchasing second homes. Since the pandemic, lockdown measures and work- ing from home became the new norm, causing many Americans to search for an escape. Hunting for a new vacation home seems to be a popular way to do just that. Some vacation hot spots have been especially trendy on Google searches. The location that has seen the greatest increase in interest is Big Sky, Montana. The popularity of keywords "big sky house" on Google had a 177% year-over-year increase. The second top-trending loca- tion is Fort Bragg, California, which had a 143% increase in consumer interest since 2019. The other top three vacation spots with the most growth in interest were Harbor Springs, Michigan had a 70% increase, Gulf Shores, Alabama, which saw a 47% rise in searches, and Waikoloa, Hawaii, which had a 38% growth in popularity since last year. Point2Homes also found that some vacation spots, such as "southeastern destinations of Key West, Myrtle Beach, Destin, Blue Ridge, and Kissimmee," which had waning interest before this year, have either bounced back to the same level of popularity they had five years ago or have devel- oped even more interest among potential second home buyers. The top five luxury destina- tions which "returned to their pre-pandemic levels by mid-sum- mer" include Aspen, Colorado; Park City, Utah; Palm Springs, California; and Newport Beach, California. Largest Annual Home Price Growth Since 2018 Second homes and investment properties might account for some recent demand, analysts say. H ome prices during August recorded a 5.9% increase from one year earlier, according to CoreLogic's latest Home Price Index (HPI) data report. This rep- resents the highest annual growth on the HPI since June 2018. On a monthly measurement, August's HPI was up by nearly 1% in July, when home prices increased 5.1% year over year. CoreLogic attributed much of the upward pressure on home price appreciation to dramatic declines in housing inventory—August saw a 17% year-over-year plummet in for-sale properties. "Consumers who have not been as financially impacted by the ongoing economic pressures are taking advantage of low mort- gage rates to either break into the market, upgrade their living situ- ations, or purchase second homes and investment properties," said Frank Martell, President and CEO of CoreLogic. "With heightened activity putting a strain on the current for-sale inventory, strong demand should help spur new homebuilding activity." The new CoreLogic HPI follows the company's recent Home Equity Report that found overall equity for homeowners with mortgages rose 6.6% over the past year while the number of mortgaged proper- ties with negative equity decreased by 15% in the second quarter to 1.7 million or 2%. The HPI for the sec- ond quarter recorded a 4.3% annual rise in prices. Looking ahead, CoreLogic's HPI Forecast pointed to a downshift in prices during early 2021 as an- nual HPI gains slow to only 0.2% by August 2021, and many metro areas begin to experience price declines. CoreLogic theorized that greater availability of new and ex- isting homes for sale coupled with high unemployment rates would weaken buyer demand. However, CoreLogic acknowl- edged that certain markets would be more lethargic than others, while some will exhibit greater vi- brancy degrees. As examples, the company predicted that difficul- ties in the tourism economy and job market in Las Vegas will drive home prices down by 6.5% in a year from now. In comparison, a continuation of low inventory rates will pump San Francisco home prices up by 7.8% over the next 12 months.

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