SEATTLE, June 13, 2018 /PRNewswire/ -- In places
where vacation homes are most common, the housing crisis still
shows a noticeable effect on the market.
Scattered across the country, vacation home marketsi
experienced a steeper run up in home values during the housing
bubble, but also a sharper fall. Vacation home markets gained 117
percent in value between 2000 and 2006, compared with an 83 percent
home value increase in places with the smallest share of vacation
homes. However, the losses were greater when the housing market
crashed, with home values falling 35 percent and 26 percent,
respectively.
Along the eastern shore of Hilton Head
Islandii, where 54 percent of homes are vacation
homes, the typical home gained 95 percent in value between 2000 and
2006, then lost 41 percent. In comparison, Beaufort County overall
gained 67 percent in value, but only fell 36 percent.
In Cape Cod, where 39 percent
of homes are vacation homesiii, the typical home gained
83 percent in value between 2000 and 2006, then lost 19 percent.
The state of Massachusetts as a
whole only gained 56 percent in value, but also fell 19
percent.
The recovery has also been slower to reach vacation home
markets. Since 2010, home value appreciation in these markets has
been slower than the rest of the market every year except 2012.
Home values grew 0.7 percentage points less in vacation markets in
2017 than they did in the rest of the country.
As a result of this slower home value growth during the
recovery, home values in vacation home markets are still 9 percent
below the peak reached at the height of the housing bubble. By
contrast, markets with the smallest share of vacation
homesiv are 14 percent more valuable than they were
before the recession.
"Vacation home markets have lagged the rest of the country
during the economic recovery, despite an exaggerated boom and bust
a decade ago," said Zillow® senior economist Aaron Terrazas. "As the economy improves and
more Americans feel secure in their personal finances and primary
residences, it is possible that more will look to buy a vacation
home. The good news is that there are still bargains to be found in
many vacation communities, but recent tax changes will eat into the
tax benefits of second-home ownership. Beyond financial
considerations, Americans are increasingly conscious of the
environmental risks common in many vacation communities, including
those from rising sea levels and storm surges, hurricanes and
wildfires."
The Southern and Western regions have the biggest gap between
the recovery in vacation markets and the overall housing market.
Home values in Southern vacation home markets are still 17 percent
below the highest point they reached during the housing bubble,
while markets with the smallest share of vacation homes are 9
percent more valuable. In the West, places with the lowest
concentration of vacation homes are 21 percent higher than they
were during the housing bubble, and vacation home markets are still
3 percent lower than their bubble peak value.
The Midwest is the only region where vacation home markets have
recovered better than areas where vacation homes are less common –
home values in vacation markets are 9 percent higher than the
bubble. In places where vacation homes are least common, home
values are 2 percent above their peak levels from the housing
bubble.
National
|
|
Current Value –
March 2018
|
Value Gained
2000-2006
|
Value Lost During
Crisis
|
Current Value vs.
Bubble Peak Value
|
Highest Share of
Vacation Homes
|
$ 281,100
|
91%
|
-35%
|
-9%
|
Lowest Share of
Vacation Homes
|
$ 321,000
|
65%
|
-26%
|
14%
|
West
|
|
Current Value –
March 2018
|
Value Gained
2000-2006
|
Value Lost During
Crisis
|
Current Value vs.
Bubble Peak Value
|
Highest Share of
Vacation Homes
|
$ 387,600
|
102%
|
-36%
|
-3%
|
Lowest Share of
Vacation Homes
|
$ 549,900
|
91%
|
-33%
|
21%
|
Midwest
|
|
Current Value –
March 2018
|
Value Gained
2000-2006
|
Value Lost During
Crisis
|
Current Value vs.
Bubble Peak Value
|
Highest Share of
Vacation Homes
|
$ 146,300
|
35%
|
-18%
|
9%
|
Lowest Share of
Vacation Homes
|
$ 177,400
|
32%
|
-25%
|
2%
|
Northeast
|
|
Current Value –
March 2018
|
Value Gained
2000-2006
|
Value Lost During
Crisis
|
Current Value vs.
Bubble Peak Value
|
Highest Share of
Vacation Homes
|
$ 351,900
|
104%
|
-21%
|
0%
|
Lowest Share of
Vacation Homes
|
$ 371,500
|
81%
|
-18%
|
11%
|
South
|
|
Current Value –
March 2018
|
Value Gained
2000-2006
|
Value Lost During
Crisis
|
Current Value vs.
Bubble Peak Value
|
Highest Share of
Vacation Homes
|
$ 258,800
|
120%
|
-42%
|
-17%
|
Lowest Share of
Vacation Homes
|
$ 206,000
|
58%
|
-22%
|
9%
|
Zillow
Zillow is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with great real estate professionals. In addition,
Zillow operates an industry-leading economics and analytics bureau
led by Zillow Group's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Launched in 2006, Zillow is owned and operated by Zillow
Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i Classified as any ZIP code with more than 10
percent of homes whose primary use was "recreational, seasonal or
occasional" according to the 2000 Census.
ii ZIP code 29928
iii
https://www.zillow.com/research/places-most-vacation-homes-19835/
iv Classified as any ZIP code with less than 5 percent
of homes whose primary use was "recreational, seasonal or
occasional" according to the 2000 Census.
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SOURCE Zillow