No Slowing Down for Summer: Vacation Rental & Second Home Markets Remain Strong
There is no denying that the coronavirus has altered human behavior and these changes have, and will continue to, result in dynamic shifts for industries across the board. With the uncertainty of the virus, no one knows how persistent it will be or how we will live, work and interact with one another. However, one thing is certain: People are craving space and a place with room to retreat after being cooped up in small, expensive apartments that functioned perfectly as a place to live and work in the big city, yet not as a place to be bound to live and work for the foreseeable future.
A change in what we value in life has been unearthed, which includes more time with friends, family and enjoying the great outdoors. Because of this new desire for room, the real estate industry has a new trend emerging. We are seeing an uptick in higher priced rentals, an increase in sales of second homes in markets that are drivable from major cities, and people planning late summer and fall escapes and booking lavish vacation homes. Here we explore some of those destinations and what we can expect in the coming months.
California has always had great appeal for those seeking the year-round warm climate and relaxed lifestyle. As families reevaluate living, working and studying, all from home, residing in California full-time has never been more appealing. People are trading their glass-enclosed, high-rise apartments for thousands of square feet of living with amenities including pools, movie theaters and endless outdoor space.
We’ve seen a surge of interest across Los Angeles and Orange County, spanning all the way up to northern coastal regions, such as Montecito, Carmel and into Northern California’s wine country. Rather than be stuck in an apartment as the onslaught of summer heat looms, some East Coast residents are even purchasing after virtual showings. In Malibu—one of our most active summer rental markets—those who typically rent for the season are deciding to buy, and we have had an abundance of inquiries, with people willing to pay hundreds of thousands a month for a prime, beachfront abode.
People have long made the move to South Florida from across the Northeast to enjoy the Sunshine State’s favorable climate, close proximity to major cities such as New York, cosmopolitan lifestyle and also the lack of state income tax. During the coronavirus era, the migration to South Florida continues at a steady pace, with more people looking to permanently relocate in addition to purchasing second homes. Howard Elfman, managing broker of The Agency South Florida, notes that buyers are prepping for a possible resurgence of the virus in colder, winter weather and recognizing that money goes much further in South Florida compared to a major city. While Miami continues to be a popular destination—the beach, Brickell and downtown—buyers are looking for homes with land in less densely populated beach towns including Aventura, Fort Lauderdale and Boca Raton.
The luxury rental market in Aspen is currently experiencing a very high demand for summer rentals. Heather Sinclair, managing partner of the Aspen office, notes that one rental listing they hold has been rented for June and July for $130,000 a month. In the past three weeks, Sinclair and her business partner Lisa Hatem have received six full-price offers for June, July and/or August. They also received an offer for the entire summer (name your price), which the owner declined. Sinclair says it’s the same situation across the board with other rental listings, adding that Aspen is a beloved summer destination and escape.
The scenic mountain town offers the best skiing during winter months and the best hiking, biking and more during summer. A popular destination for A-list celebrities and film industry elite during the Sundance Film Festival, since the start of the coronavirus outbreak, Park City has seen an influx of activity at the upper end of the market. Park City offers easy access from major cities on the West Coast, including Los Angeles, fresh air, many outdoor activity options and natural social distancing.
With many people transiting to working remotely, Park City has become a very viable option. Jake Doilney, who leads The Agency’s Park City team alongside Mike Mazzone and Charlie Taylor, says that, for the most part, many people still have high values in their portfolios and are looking to take advantage of the pricing in Park City, which is relatively low compared to their own markets in New York, San Francisco and Los Angeles. Second homes can be enjoyed and then rented during the film festival and year-round. Over the past three weeks, showings have happened in the upper end of the market and properties and land are trading.
Turks and Caicos closed its borders to stymie the spread of the virus and is set to reopen on July 22. Despite the closure, The Agency’s team was recording sales and remained incredibly busy—and will be even more so once the border opens, as there is a stockpile of transactions that are pending a physical inspection by the purchaser.
Ian Hurdle, who heads the office, says that historically the island has seen a high demand for high-end rental product and second homes, and he does not see that changing. “In fact, I think we will see more UHNW [ultra-high net worth] activity as some of our major hotels intend to remain closed through the fall,” he says. “We expect a lot of bookings from our returning clientele who come to Turks via private jet who seek our top-tier luxury beachfront villas.”
There have been reports of A-listers and top executives waiting out stay-at-home orders in the Caribbean during this time, and again with remote working options, Hurdle expects this will be the continued trend throughout the year. “Why not be hunkered down on a beach with a view of the ocean versus stuck in the city in the cold with a view of rooftops?” he says.