- Compared to pre-pandemic levels, luxury second home sales have increased by 235% since Q1 2020.
- Williamson County is the second-highest ranked area for second-home sales.
- In Q2 2022, luxury second home transactions increased 25 percent year over year.
- A study by Pacasso since 1980 has shown that real estate has been more stable than a typical stock market index during economic downturns or periods of uncertainty.
One segment of the real estate market that seems unaffected by rising interest rates and a lack of inventory is the luxury secondary market, which has seen unprecedented sales growth over the past two years.
Williamson County, Tenn., ranked second only to Coeur d’Alene, Idaho, for the largest year-over-year increase in luxury second home sales. Other destinations on the list include Charleston, SC, Kitsap County, WA and Orange County, Fl.
A survey by Pacasso Real Estate Company, which focuses on the second home market, showed sales of luxury second homes and investment properties (homes sold for $1 million or for seasonal and/or recreational use) rose 42.1 percent in Williamson County. % YoY during the second quarter of 2022.
Nationally, second-quarter growth was about 25 percent year-over-year. This increase is 235% compared to the first quarter of 2020.
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In the second quarter of 2022, overall luxury real estate outperformed expectations and outperformed the second home category and the overall real estate market, Pacasso co-founder and CEO Austin Allison said in a statement.
“It’s clear that demand for this type of property remains strong despite rising interest rates and the growing threat of recession,” Allison added.
Ray Tadena, a broker affiliated with RE/MAX Fine Homes, said not all second home purchases are true second homes, but an additional home can easily become a primary home that allows a family to move to a place like Middle Tennessee.
“I believe there are some buyers in Middle Tennessee who are buying a second home because of the emergency they’re living in right now,” Tadena said. “If you get into that second home and make it your primary residence, it can be a more attractive situation than where you live. If not, why not go to the beach? There’s something special about living in Middle Tennessee. And unlike anywhere else in the world.”
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A Pacasso spokesman said the increase was partly due to a shift from home to work, which has allowed people to spend time away from their main homes and offices as a result of the pandemic. States like Tennessee, which have no state income tax, are attractive places for luxury, second home buyers.
Allison added that more affluent customers tend to be more insulated from the effects of a recession.
“Some consumers see real estate as a stable place to park their money when market volatility increases,” he said. Even if they cut their budget, this group is unlikely to completely exit the market. As a result, the demand for luxury real estate is still strong, but the increase in house prices for this category is slowing down. Seen in Q2 2022.
Melone Hart covers growth and development in The Tennessean – Tennessee, part of the USA TODAY Network. Reach Melonee at email@example.com.