Sellers are flooding the market with vacation homes as high costs and crashing Airbnb demand shake Florida’s real estate scene

The vacation home market is undergoing a dramatic transformation.

As fears of a housing market crash loom and the pool of renters shrinks, more and more second homes are being sold off.

A Steep Decline in Purchases

In 2024, the number of second homes being purchased in the U.S. plummeted to the lowest level on record, a sharp drop from the pandemic’s peak.

Mortgages for vacation homes fell to just 86,604, down significantly from 258,289 in 2021.

That’s less than a third of what it was just a few years ago.

A combination of high mortgage rates, skyrocketing maintenance costs, and the return of office work is driving this trend.

Many remote workers who fled to sunny locations like Florida and California during the pandemic are now returning to the office, abandoning their vacation properties in the process.

A Struggling Market for Second Homes

In 2024, second homes accounted for only 2.6% of all U.S. mortgages, according to Redfin’s analysis.

That’s half of what it was in 2020. Back in 2018, there were 175,644 second-home mortgages, and those numbers steadily rose until 2021, but they’ve been on a downward trend ever since.

Lindsay Garcia, a Redfin Premier agent in Fort Lauderdale, explains that the main issue is the skyrocketing costs of mortgages and insurance, especially for waterfront properties.

“Most people aren’t buying vacation homes at all,” she says.

For many second-home owners who rely on rental income to cover costs, the situation is even worse.

With Airbnb demand crashing and rental rates too high, landlords who once hoped for quick profits are finding that they just aren’t getting the returns they expected.

Even the Wealthy Are Letting Go

It’s not just the average homeowner who is feeling the pinch.

Even the wealthy are abandoning their vacation homes, which have become too expensive to maintain in today’s uncertain market.

In 2024, the average cost of a second home reached $495,000, and with soaring mortgage rates, the monthly costs of holding onto these properties have become unsustainable for many.

Some homeowners were also forced to sell as in-office mandates returned, making remote work a thing of the past for some.

Florida: The Epicenter of Change

Florida, once a playground for vacation-home buyers, is seeing the largest number of second-home listings.

Cities like Miami, Orlando, Fort Lauderdale, West Palm Beach, and Tampa have all experienced significant drops in second-home mortgages.

In Miami, vacation-home mortgages fell by a staggering 32.2% in 2024.

The state is grappling with rising insurance premiums, soaring homeowners association fees, and the constant threat of natural disasters, all of which are deterring potential buyers.

Maine’s Struggles

Further north, Maine is also seeing a surge in second-home owners trying to sell.

Once a popular destination for vacation homes, Maine is now struggling, with many owners concerned about a possible housing market crash and the security of their financial future.

Real estate agents in the area have noticed a significant uptick in listings, particularly among Baby Boomers who are worried about their retirement savings after the recent downturn in the stock market.

According to Tom Landry, a Portland realtor, many of his clients are looking to cash out, saying, “I’m really concerned about what’s going to happen over the next year or two with my retirement.”

The Upside of West Palm Beach

While most areas are seeing declines, there’s one notable exception: West Palm Beach.

In this city, second-home mortgages made up 5.6% of all mortgages in 2024, the highest percentage across the nation.

However, the buyers here are typically wealthier, older, and overwhelmingly white, with nearly 90% of them earning over $280,000 annually.

A New Landscape for Vacation Homes

Despite some minor upticks in second-home purchases in cities like Detroit, San Francisco, and San Jose, the vacation home market has changed.

As fewer people are able to afford second homes, many are still struggling to purchase their first.

The dream of owning a beachside bungalow or a mountain cabin seems further out of reach for many, leaving homeowners to wonder what the future holds for the vacation home market.