A home in Breckenridge, Colorado.
Michael Robinson | Corbis documentary | Getty Images
Ever since the Covid pandemic began nearly two years ago, weary Americans longing for a fun but still safe escape have changed their travel habits to follow the new normal.
Domestic road trips, national park visits and holiday home rentals and sales rose sharply amid concerns about privacy and exposure, and have remained popular, although pandemic restrictions have been eased.
The holiday home market in particular has been strong and looks set to remain so, industry trackers say. In the first quarter of 2021, sales of holiday homes increased e.g. 46% compared to the previous year, according to Realtor.com, and home sales should generally grow by 6.6% in 2022.
"Given the pandemic, another home offers a sense of security and personal space that a hotel or vacation rental might not," said Joe Robison, data reporter at online moving resource MoveBuddha.com. "And with work from home protocols, the freedom to move between two different home offices can be hugely attractive, as it offers a change of scenery without the unknown variables of booking a vacation home."
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Travel insurance company Allianz Partners has found that 68% of Americans surveyed say a winter trip is important, and almost as many (57%) intend to take a domestic holiday this year.
Rental Platform Vacasa.com has compiled a list of the best places to buy a winter holiday home based on cost and rental rates, while MoveBuddha.com has put together a list of home prices in the best affordable - and more hopeful - winter resorts.
Get away, then get paid
There are currently more than 5 million vacation homes in the country, according to the U.S. Census Bureau. More than 1 million of them are listed on major online platforms as short-term leases, research firm AirDNA has found.
Americans who shop after their own winter vacations are mixed in their motivations, said Shaun Greer, vice president of real estate and strategic growth at Vacasa. The company's 2021 Vacation Rental Buyer Report showed that 58% of shoppers wanted a rental they could also vacation on, while 42% primarily wanted an income-generating investment.
"It really depends on the buyer and their priorities," he said. "Regardless of motivation, it is crucial for buyers to establish the financial goals of a rental home from the beginning and determine how often they plan to use it."
The more you spend your cottage yourself, especially during periods of high demand such as vacations, the less income you will earn, Greer noted, "so it's important to include it in forecasts and the overall budget."
Daily rental prices have risen this year in top markets, so gross income in the short-term rental market has risen - although capitalization rates are slightly lower than normal, Vacasa found. Here are the best markets based on cap rate and median house price:
Some of the best competitors are - such as Newry, Conway and Banner Elk - are lesser known across the country. This is due to the increase in popularity of destinations within driving distance of major cities since Covid hit, Greer explained, and it is likely to remain so.
"We have seen increasing demand for holiday destinations within a three hour drive from major metro areas, as road trips are becoming the preferred way to travel - and this is especially true for mountain and beach areas where people can be outdoors and there is less density," he said.
Although urban and more traditional (and crowded) places are starting to return, "I think we will continue to see holiday home investment and demand for guests in these places," Greer added.
Similar things, better price?
MoveBuddha found much the same in his research, according to Robison.
"Since the start of the pandemic, there has certainly been a lot of anecdotal evidence that New York City or Chicago city dwellers are choosing to split their time between the big city and another home in more remote locations in upstate New York and the Midwest," he said. "For these types of second home buyers, it's easy to understand the appeal of accessible, subdued and inexpensive places."
As part of its own survey of the top 20 cities in the United States for winter vacations, MoveBuddha ranked destinations in terms of home purchase costs, from the most affordable to the smallest. Places were also grouped into four interest categories: snow and slopes, for skiers and other winter sports fans; sun and sand, for beachgoers and the like; trails and trekking, for walkers and hikers; and cozy and affectionate, for bookworms and other culture and coziness stomachs.
Snow-slopes participating in Ironwood, Michigan and Hurley, Wisconsin top the affordability rankings with average house prices of $ 58,990 and $ 75,285, respectively. That compares with nearly $ 1.23 million on average in the Breckenridge ski mecca, Colorado, which tops the list.
Robison said the site used various measurements adjusted for population, so the survey would capture lesser-known sites that still offer good opportunities for winter vacations.
"Ironwood, for example, is within 20 miles of four ski resorts - the same density as Breckenridge, [and] Corpus Christi has roughly the same number of beaches per. resident as Honolulu, "he said.
Upstate New York cities like Utica and Syracuse may be less desirable for full-time living due to relatively poor labor markets, but "this is not a problem for a vacation home," Robison added.
"There's definitely more to do in people like Burlington, Honolulu or Breckenridge," he said. "But Ironwood, Utica and Corpus Christi have significantly cheaper housing markets, and for several years smaller cities have proven to appeal to millennial home buyers, especially for this reason."
Robison noted that the increasing popularity of lesser-known second home destinations is unlikely to come at the expense of more established locations.
"We will not argue that the world's Breckenridges and St. Petersburg are losing steam, while Ironwoods and Corpus Christis are winning it," he said. "Rather ... more people in general are interested in owning a cottage, even if it is not a place with a lot of impact."
In addition, keep an eye on Alaska, Robison said.
MoveBuddha found a 38% increase in interest in the state in its 2021 migration report.
"We can not say whether it is permanent relocations or holiday homes, purchases or rentals, but the interest is certainly there," he said.
While the state has seen sustained growth as a vacation destination, Robison added, "it's not a winter vacation destination for delicate souls."
In fact, when shopping for a "winter" place, it's important to measure possible appeal to all year round, Greer noted at Vacasa.
"When you want to invest in a vacation rental, you should consider what these summer and winter guest benefits are," he said. "In good news for vacation rental homeowners, places like Lake Chelan in Washington, Gatlinburg, Tennessee and Big Sky, Montana, have a strong appeal all season long."