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NEW YORK, Oct 30 - U.S. vacation home sales have fallen by nearly three-quarters from their frenzied pace three years ago as an inventory shortage spawns a wrenching correction in the second-homes market.
The current share of secondary homes within the existing housing market has fallen to 16% as of August, from a peak of 22% in January 2022, data from the National Association of Realtors showed. That share is still somewhat above the 14% average from late 2015 through the first half of 2020. Hilton Head Island and Lake Havasu City experienced the greatest fall in volume at 83% and 87%, respectively, compared with respective gains of 45% and 79% from early 2019 to the start of this year.
Optimal Blue data shows vacation home purchases peaked nationally during the third quarter of 2020 when 30-year mortgage rates were on their way to record lows under 3% as the Federal Reserve moved to prop up the economy in the face of the pandemic. “Services for existing rentals has grown, but services for larger ticket remodeling work on new vacation rentals has stopped," said Tim Allen, owner of Kopa Home Services, based in Flagstaff, Arizona."I can't recall any large project or make-ready that we've done on a new vacation rental owner this year.”
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