You’ve probably seen the data: Second home sales have been on fire.
Interest in second homes was on a steady rise pre-COVID, but the pandemic sent demand soaring to a high of 178% year-over-year in April 2021. While the market has slowed, the likely cause is not a lack of desire for a second home, but skyrocketing prices that have forced buyers to pause their vacation home plans. Redfin economist Taylor Marr predicts that interest in second homes is here to stay: “Demand for second homes remains well above pre-pandemic levels, and we can expect the high level of interest in vacation homes to persist in the new era of remote work.”
Luxury second homes are driving the market
Within the luxury sector, a new report by Berkshire Hathaway HomeServices (BHHS) notes that “strong demand for second homes is one of the key drivers in the U.S. luxury market.” But the luxury market faces the same realities of high prices and low inventory — especially in desirable vacation destinations. Kyle Kemp, a Santa Barbara-based BHHS broker, remarked that inventory was 50% lower than usual in his region, but transactions had doubled, with properties being snatched up for a premium.
Other interesting findings: Today’s second-home buyers are passing on condos, meaning competition and prices for single-family vacation homes in hot markets are way up. Buyers also want to spend more time in their second homes and aren’t interested in renting them out.
Second-home buyers can be your new best clients
What does this mean for you?
First, many of your clients are already thinking about second homes. Pacaso’s Second Home Sentiment Report found that 56% of people want to own a second home — more than half your contacts are potential buyers! You don’t have to wait 5-7+ years for a former client to re-engage. They may be ready to buy a second home today, if the price is right.
Second, working with second home buyers expands your client pool. Capture out-of-town buyers interested in your market, or local clients who want your expertise as they research vacation markets.
Third, if you help a buyer find their dream second home, chances are they’re going to try and talk their friends into buying a home in the same area. Second home clients can be an excellent source of referrals!
The co-ownership option
Inventory is tight, prices are high, and single-family second homes are scarce. So how do you give your clients what they want?
One option is co-ownership with Pacaso. Most buyers, even with remote work flexibility, don’t plan to use their second homes more than a month or two each year. With co-ownership, they can buy a luxury home at an attainable price and choose the amount of ownership they want. Pacaso offers only single-family homes, and they’re never rented out.
Palm Springs agent Brandi Pratt, who has worked on many Pacaso transactions, put it this way: “Some clients have a minimal budget but want a $5 million estate, so I tell them, ‘You can be in that $5 million estate for less,’ and that’s quite desirable, because they can say, ‘I do have a second home that’s worth $5 million, but I bought it for a portion of that.’”
And when your clients buy with Pacaso, there’s no bidding war — the listed price is what they pay. Buy-side agents receive 3% commission and an equity bonus on each transaction, which can add up since each home provides an opportunity for eight sales. Bringing buyers to Pacaso is as simple as a referral, and you can earn your commission on a Pacaso property anywhere in the country, from Napa to Malibu, Aspen to Miami.
Working with second home buyers and introducing them to co-ownership helps you grow your business, earn generous commissions and expand your reach.
Pacaso is the modern way to buy and own a second home. We bring together buyers to purchase and collectively own a second home, and provide a fully managed, end-to-end service. We’re making second home ownership possible and enjoyable for more people.