New Jersey and Florida Lead Luxury Vacation Home Market Surge

Pacaso's report highlights New Jersey and Florida as top luxury vacation home markets, driven by rising second-home investments and favorable market conditions.

As we look toward 2025, a shift in the housing market is on the horizon.

Predictions indicate that declining mortgage rates and an uptick in property inventory will lead to heightened demand for luxury vacation homes.

Top Luxury Vacation Home Destinations

According to a recent study from the online platform Pacaso, there has been a noticeable increase in second-home buyers eyeing prime vacation real estate hotspots, particularly in New Jersey, Florida, and Massachusetts.

Despite ongoing challenges such as rising home prices and interest rates, these regions remain appealing to investors.

In its analysis, Pacaso compiled a list of the 20 counties in the U.S. leading the way in luxury home sales.

This ranking utilized an index system that considered the ratio of second-home purchases compared to primary residences throughout 2023 and 2024.

Notably, counties without at least 50 recorded mortgage locks for second homes were excluded from the list.

The counties featured boasted average home prices exceeding $700,000, with reliable expectations for future appreciation.

County Rankings and Trends

Cape May County in New Jersey took the top spot for second-home transactions.

Following closely behind were Gulf County, Walton County, and Collier County in Florida, as well as Barnstable County in Massachusetts.

Allison Kade, CEO and co-founder of Pacaso, noted that these sought-after areas showcase a variety of opportunities in the luxury vacation home market.

Traditional vacation destinations still captivate buyers, but the Florida panhandle is rapidly becoming a favorite choice for travelers.

At the same time, Manhattan is seeing fresh enthusiasm from those looking to acquire second homes.

Allison pointed out a significant shift in how people perceive luxury vacation properties.

Many now view them as lifestyle investments rather than just occasional getaways, fostering the chance for families and friends to create cherished memories.

Investment Opportunities

Remarkably, Cape May County reported a 150% ratio of second homes to primary residences, with average prices hovering around $1.1 million.

This county has made an impressive leap from the bottom of Pacaso’s previous ranking published in May 2023.

Moreover, New Jersey’s notable home equity growth stands to further empower buyers in the luxury market.

Florida shone brightly in this report, with three counties from the state ranking among the top five for second-home sales in 2024.

Gulf County secured the second position, boasting a remarkable 77.7% ratio of second homes to primary residences and an average home price exceeding $1 million.

Walton County closely followed in third place, with a 67% ratio and an average price of about $1.44 million.

Collier County rounded out the top five, featuring a 52.9% ratio and an average sales price of approximately $896,000.

Additionally, the revival of luxury home investments in Manhattan, New York County, post-pandemic, marked another interesting trend worth mentioning.

Pacaso facilitates innovative co-ownership in real estate, enabling multiple individuals to invest collectively in vacation properties.

This shared ownership model, reminiscent of carpooling, opens the door for more local residents to explore opportunities in the luxury real estate market.

Source: Housingwire