2023’s Top 10 US luxury second-home markets and ones to watch in 2024

December 8, 2023

Demand for housing is outstripping supply as inventory is tight in key markets

In this year's Top Second Home Markets Report, second-home property seller Pacaso unveiled the top 10 luxury second home markets of 2023 and delved into the top 10 markets to watch in 2024.

The primary U.S. housing market grappled with dynamic challenges throughout 2023, characterized by low inventory, high rates and rising prices, said Pacaso cofounder/CEO Austin Allison in the report.

“These challenges have reverberated into the second-home market, giving rise to new trends, including a return to metro-adjacent homes and the emergence of new front-running destinations that offer buyers significant price appreciation and access to outstanding nearby amenities,” he said.

2023’s top luxury second-home markets
To determine the top U.S. markets, Pacaso analyzed the year-over-year growth in closed transactions of second homes valued at more than $1 million. Here are the 10 U.S. counties that saw the biggest increases in second-home transactions in 2023.

Top 10 markets with biggest increases in second-home transactions. Source: Pacaso analysis of First American Data & Analytics second home transaction data year to date Top 10 U.S. markets with biggest increases in second-home transactions. Source: Pacaso analysis of First American Data & Analytics second home transaction data year to date

New England favorites, distinctive West Coast coastal retreats and metro-adjacent hideaways nab top spots
Newport County, Rhode Island, takes the lead with an impressive 64 percent surge in second-home transactions in 2023, marking a significant increase from 2022, per Pacaso.

Famous for its iconic Gilded Age mansions, once the favored second-home spots for renowned families such as the Vanderbilts and Kennedys, Newport boasts a diverse range of activities and attractions, from scenic strolls along the Cliff Walk to savoring the town's most unique shops and restaurants.

Other New England counties, traditionally acknowledged as vacation getaway destinations, saw substantial growth in second-home transactions in 2023.

Noteworthy destinations such as Kennebunkport and Portland, Maine, along with Portsmouth, Rhode Island, recorded more than a 13 percent increase in transactions from 2022.

Big Apple border suburbs
Amongst this year’s top 10 markets for second-home transactions is Fairfield County, Connecticut (14 percent) and Westchester County, New York (10 percent).

"In today's dynamic real estate landscape, it's no surprise to witness metro-adjacent counties like Fairfield and Westchester, leading the charts in second home transactions,” Mr. Allison said.

“With the onslaught of hybrid back-to-office policies by several companies, home buyers are seeking the perfect blend of spacious, nature-centric living, all while maintaining the convenience of a short train ride to the city,” he said.

Distinct Western waterways spark interest
Douglas County, Nevada (13 percent), and Island County, Washington (11 percent), experienced notable year-over-year increases in second-home transactions among the top markets.

Douglas County, located on the southeastern border of Lake Tahoe, is renowned for lakeside gems such as Zephyr Cove and Stateline on the California-Nevada border.

Further up north, Island County, Washington, housing Whidbey Island, is primarily recognized for the Naval Air Station but is most visited for its stunning Pacific Northwest landscape, encompassing beaches, hills and farmland.

Destinations to watch in 2024
An addition to this year's Pacaso second-home markets report is its analysis of destinations to watch in 2024.

To determine the top U.S. markets to watch, Pacaso analyzed the top U.S. counties that saw the biggest appreciation in second-home value for homes priced above $1 million.

Top 10 U.S. markets to watch in 2024 with largest price appreciation year to date. Source: Pacaso analysis of First American Data & Analytics second home transaction data year to date

Florida gets its time in the sun
The pandemic-fueled rush to Florida and the surge in second-home transactions in previous years seemingly persist, as three Florida counties secure spots on Pacaso’s 2024 watchlist.

The top market to keep an eye on in 2024 is Volusia County, Florida, witnessing a remarkable 47 percent year-over-year increase in average second home value, the Pacaso report found.

Volusia also experienced a surge in second home transactions, registering a 19 percent growth and ranking as the second-largest year-over-year expansion.

Volusia is most known for Daytona Beach and other picturesque beach towns such as New Smyrna Beach and Ormond Beach.

Notably, Volusia County has emerged with the highest average second-home price in 2023 year-to-date, boasting an impressive average of $4,105,174.

Orange County and Indian River County, Florida are also on Pacaso’s must-watch list as they both saw more than 20 percent appreciation on luxury second homes.

Destination dupes
“Expedia recently highlighted the phenomenon of 'destination dupes' – budget-friendly alternatives to popular locations – that have left a lasting impact on the travel scene,” Mr. Allison said.

“It seems this trend is extending into the real estate realm, with locales providing more affordable housing options while offering comparable amenities, access to outdoor activities, scenic beaches and charming towns, akin to their more famous counterparts,” he said.

“Consider Bald Head Island, North Carolina, as a dupe to South Carolina’s Kiawah or the Charleston barrier islands, Mt. Rose as a substitute for Tahoe’s ski resorts, and even Golden, Colorado, as an alternative to the expected Colorado mountain towns.”

In Washoe County, Nevada, home to Reno, also known as the ‘biggest little city,’ there was a remarkable 26 percent appreciation from 2022. This growth is attributed to its proximity to Lake Tahoe, absence of state income tax and the presence of amazing yet less-populated ski resorts such as Mt. Rose.

Brunswick County, North Carolina, the southernmost county in the state, experienced a 26 percent appreciation. This picturesque area is home to idyllic beach towns such as Ocean Isle, Oak Island and Bald Head Island.

Meanwhile, Jefferson County, Colorado, a suburb of Denver, witnessed an impressive 37 percent appreciation. Located in close proximity to the city, it offers a short drive to ski resorts and is home to the iconic Red Rocks Park and Amphitheatre.

Park City, Utah prevails
Summit County, Utah, the cherished home of the year-round destination Park City, has experienced an impressive 18 percent increase in second-home values from 2022 to 2023, per Pacaso.

It comes as no surprise that this beloved destination, recognized as one of Pacaso's core second-home locations, boasts one of the largest and most pristine ski areas in the U.S.

Alongside its proximity to outdoor recreation in all seasons, a lively downtown atmosphere, and its role as the host of the internationally renowned Sundance Film Festival, Park City continues to be a sought-after destination.

Homes within the Pacaso marketplace in Park City consistently deliver significant resale gains.

Methodology
Pacaso identified the top U.S. luxury second home markets of 2023 by selecting the 10 counties with the highest year-over-year growth in closed transactions of second-homes valued at more than $1 million from 2022 to 2023.

To ensure reliable analysis, counties with fewer than 20 second-home transactions during this period were excluded.

The definition of luxury second homes in this context encompasses residences sold for $1 million or more, specifically designated for seasonal and/or recreational purposes.

Destinations to watch in 2024 are defined as the top U.S. counties that saw the biggest appreciation in second-home value for homes priced above $1 million from 2022 to 2023.

Data was provided by real estate analytics firm First American Data & Analytics and includes a sizable share of the market that is taken to be representative of the whole.

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2023’s Top 10 US luxury second-home markets and ones to watch in 2024

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