Is it Time to Sell Your Vacation Home?

The travel industry has been severely impacted by the COVID-19 pandemic, leading some homeowners to consider selling their vacation homes. A recent CNN article indicated that many Airbnb hosts are planning to sell their properties due to canceled bookings and mounting expenses. A survey notes that 48% of Americans have already canceled summer travel plans, and 71% are putting their plans on hold for at least 6 months or are unsure about future travel. If you’re considering selling your rental property, know that there are two key factors indicating that selling your vacation home now may be your best move as a homeowner. Inventory Shortage The inventory of overall homes for sale is well below the demand from potential buyers, so many eyes may be searching for a home like yours. According to the National Association of Realtors (NAR), total housing inventory, meaning homes available to purchase, is down 19.7% from one year ago (see graph below): Inventory across the country continues to be a challenge, with only a 4.1-month supply of listings available at the current sales pace. For a balanced market, where there are enough homes available for interested buyers to purchase, that number would need to bump up to a 6-month supply. This means we don’t have enough inventory for the number of buyers looking for homes, so selling in this scenario is ideal. Buyers are looking now, and some vacation homes make a great primary residence or second home for those eager to escape from more populated urban areas. Home Prices The lack of inventory is also keeping homes from depreciating in value. Today, prices are holding strong and experts forecast home price appreciation to continue throughout this year. Selling your home while prices are holding steady is a sound business move. You’ll likely have equity you’ve earned working for you as well. If your home has been vacant for the past few months, the forced savings you have built in your equity may help balance out possible rental income loss due to the slowdown in the travel industry. Bottom Line We don’t know exactly when heightened summer travel will return or what it will look like when it does. If you’re considering selling your vacation home, let’s connect today to determine your options in the current market.