How has Lockdown Revolutionized the Use of the Second home?
Second-homes are causing a surge in the U.S. housing market. This blurs the line between the booming housing market and a battered economy where millions are still out of work.
Demand for second homes doubled in October, according to real estate firm Redfin. Redfin looked at data on mortgage rate lock agreements between home buyers and banks, in which borrowers much specify whether the home they’re buying is primary, secondary or investment.
Before the pandemic, demand for second homes had grown at a steady rate. But, since the easing of lockdown restrictions, second home interest has more than doubled than primary homes.
The Surge of the Second Home
The surge in second homes shows how affluent Americans, whose white-collar jobs have allowed them to work from home, have chosen to ride out the pandemic outside of dense urban areas and in homes with more space and amenities. According to Redfin, the hottest countries to reside in over lockdown, was Lake Tahoe, Palm Springs and the New Jersey Shore.
The US housing market has made an enormous recovery from the deep depths of the lockdown lull. The uncertainty of the housing market weighed on buyers and sellers because restrictions in some states made transactions extremely complicated, if not near impossible.
The most recent sales in October rocketed to an enormous 24% compared to the same period last year. As well as this, the average house price was up more than 14%, reflecting a soar in the market and the bigger, more expensive homes selling.
Sales for Second Homes
Currently across the USA, the competitive housing market is causing real estate supply shortages and intensifying the need for a second home in the largest cities. This is according to a report released by realtor.com.
Phoenix was the city where investors contributed most to supply shortages, with a total of 429 homes off the market in April. Charlotte, North Carolina was ranked as the second most impacted city. Investors left a dent of 287 homes. Following closely behind was Miami and Tampa in Florida and Chicago for the top five cities with home supply shortages.
This report found that in 19 of the largest 50 markets, investors are selling more homes than they’re buying.
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