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Second-Home Hot Spots Become Rental Hubs

By Redfin

Many booming second-home locations are seeing a rapid growth in rentals. The pandemic spawned demand for second homes as an increase in remote work options prompted more Americans to relocate to resort areas.

Prices in second-home hot spots have soared, and so have the rental prices. Average rental prices increased 17.1% year over year in popular second-home markets in April, reaching an average of $1,893. For comparison, rental prices in areas that are not second-home destinations posted a 10% increase to $1,484, Redfin reports.

Home and rental prices particularly have been climbing in cities like Phoenix; Cape Coral, Fla.; Naples, Fla.; Myrtle Beach, S.C.; and Las Vegas, the top five second-home markets in the country, according to Redfin. Rental prices have risen by 25% or more year over year in four of the five of those regions, excluding Myrtle Beach. In Phoenix, rental prices grew nearly 33% year over year, to $1,924 in April.

“The popularity of vacation towns has sent housing costs through the roof, making it harder for many locals to afford to live in their hometowns,” says Taylor Marr, Redfin’s deputy chief economist. But “the second-home boom is ending as many vacation home buyers are priced out of the market due to historically high prices and high mortgage rates—but those same factors have already pushed locals to the sidelines. Locals in popular beach towns and vacation spots have spent the last two years competing for a limited number of homes with wealth second-home seekers—and often losing.”