Second home ownership has skyrocketed across the United States since the start of the global pandemic. In fact, in April 2021 rate-lock requests for mortgages on second homes were up a staggering 178% year-over-year, marking the 11th straight month of 80%-plus growth, according to a Redfin analysis of data from real estate analytics firm Optimal Blue.
The pandemic, of course, was a catalyst for this trajectory, which was propelled further by low mortgage rates and the rise in remote work. While it’s easy to dismiss this increased demand for second homes as a temporary response to current conditions, it might be more accurate to view this as the start of a long-term shift in how we view the second home.
After all, many of these recent buyers are spending significant amounts of time – in some cases, even the majority of their time – at these homes and, as a result, a new term has taken hold in the luxury real estate industry.
WHAT IS A CO-PRIMARY RESIDENCE?
Historically, a second home was used much less than one’s primary residence. It was a place where, work permitting, the family could gather on weekends and holidays throughout the year. With remote work now being practically universal, this has changed entirely.
More people than ever before have the luxury of being location-independent and are no longer tied to their desk, or their primary residence for that matter. For those who own multiple homes, this provides the opportunity to split their time more evenly between different properties. Rather than spending a few days out of the year at a second home, you can now stay there for extended periods without taking time off from work. In that regard, it’s not really a second home, but rather, a co-primary residence.
LIVING IN MULTIPLE LOCATIONS
The rise in co-primary residences has been most prevalent in places where a second home market (in the traditional sense) is located within a few hours’ drive from a metropolitan area. Boston and Cape Cod are perfect examples of this, but other areas where it’s become common include New York City and the Hamptons, as well as San Francisco and Lake Tahoe.
Looking specifically at Greater Boston and Cape Cod, the former has always been the definitive “primary market” and the latter the “secondary market.” Yet, it makes a lot of sense that the widespread adoption of remote work would create a more balanced relationship between these two real estate markets and the data certainly supports this. Recently, The New York Times reported that the town of Barnstable saw one of the highest influxes of new residents in the entire country year-over-year in 2020, while Boston was on the opposite end with one of the highest outflows.
Will that be totally reversed over the next few years? Time will tell, but the argument could be made, that many residents aren’t leaving Boston so much as splitting their time elsewhere.
BENEFITS OF A CO-PRIMARY RESIDENCE
The urban exodus narrative had its moment, but the reality is that most city dwellers were never leaving for good. The city will always have its advantages – renowned hospitals, schools, and cultural institutions, to name a few – that keep drawing us back and when things can fully re-open its gravitational pull will likely be as strong as ever.
Going forward, however, a whole new segment of homeowners will have the benefit of enjoying the best of both worlds in a way that wasn’t possible before. They are free to spend as much time as they please in a “lifestyle” location like Cape Cod, with its world-class beaches, golf courses, and sailing all readily available, and, when the city calls, they can simply get in the car and head there for a week, a month, or however long need be.
Of course, it’s impossible for the unprecedented demand in luxury markets like Cape Cod and the Hamptons to continue on the trajectory of the last 18-months. Nonetheless, when things have settled, these locations may never go back to being second home markets in the traditional sense. With remote work proving that it’s here to stay, the emergence of co-primary residences will likely mark a permanent shift in the luxury real estate market.
