It’s cold and gray out there, and we’ve been stuck at home for nearly a year, so let’s daydream about our next vacation… or vacation home. Instead of renting a place at the mountains or the beach, many individuals and families are purchasing a second home at their favorite getaway spot. According to national data, the demand for vacation homes surged in 2020. This past fall, the number of people applying for mortgages for second homes more than doubled compared to a year earlier.
According to data from the U.S. Census Bureau, there are more than 80,000 homes in Virginia that are classified as vacation homes, or, by the Census Bureau’s definition “vacant for seasonal, recreational, or occasional use.” We’ve identified counties where 20% or more of the total housing stock are vacation homes as “second home counties.”
Virginia’s Second Home Communities
These “second home counties” generally fall into one of two categories–mountain homes or water homes. The top two second home communities in Virginia are Bath County and Highland County, located in western Virginia. These small communities offer abundant natural resources and outdoor opportunities, including state parks, national forests, winter resorts, and warm springs.
The Vacation Home Market in Virginia
In 2020, home sales activity in second home communities in Virginia was very strong. Statewide, the number of home sales was up 11% in 2020 compared to 2019. In most second home communities, however, the number of home sales increased at a much faster rate. For example, while there were just 46 home sales in Bath County in 2020, that number was up 53% compared to a year earlier. In Northumberland County, on the Northern Neck, there were 442 home sales in 2020, a 58% increase. Sales were up 64% in Lancaster County.
Home prices tend to be lower in the state’s second home communities. But in 2020, prices accelerated much faster in these vacation home markets. Statewide, the median home price was up by 8% in 2020. In most second home markets, home sales prices increased more than twice as fast. For example, in Mecklenburg County on the North Carolina border, where they market themselves as having more shoreline than highway, the median sales price in 2020 was $189,450, which is up 25% compared to a year earlier.
Outlook for Vacation Homes in 2021
Looking ahead, the demand for second homes is likely to stay very strong in 2021. High and rising prices in the state’s urban markets, continued work from home (at least part-time work from home), and record high personal savings rates will have people interested in a second home, either for their personal vacation use or as an investment.