H
ome sales in seasonal towns are cooling faster than those in non-seasonal areas, partly due to second-home buyers pulling back amid economic uncertainty and tight short-term rental regulations. This is causing sale prices in vacation destinations to flatten.

    In July, the number of homes sold in seasonal towns fell 3% year over year, compared to a 1% decline in non-seasonal towns. Home sales have been declining on a year-over-year basis since February in seasonal towns.

    Seasonal towns are defined as those where more than 30% of the housing stock is used only seasonally or occasionally. Roughly 9% of all home sales in the U.S. occur in these areas, with examples including Aspen, CO, and Scottsdale, AZ.

    The decline in second-home demand is largely due to affordability issues, as mortgages for second homes dropped to their lowest level in at least six years in 2024. Additionally, many Americans no longer have the flexibility to work remotely from vacation spots they may have had during the pandemic.

    "The local condo market is brutal," said Cecilia Cordova, a Redfin Premier agent in Miami. "We have so many people selling condos that they've been using as second homes... Now, some people who bought coastal condos in 2020 or 2021 are returning to New York or Boston full-time; they're no longer working remotely from the beach."

    The short-term rental market is also less appealing than it once was due to regulatory red tape and saturated markets. "People are calling me because they have rentals they want to sell," said Nikkolene Byron, a Redfin Premier agent in Palm Springs, CA.

    Inventory of homes for sale has increased 17% year over year in seasonal towns, compared to a 14% increase in non-seasonal towns. New listings in seasonal towns have declined by 3%, the biggest drop in nearly two years.

    Prices in seasonal towns are flat, with the median sale price remaining unchanged from last year at $583,000. In contrast, the median price in non-seasonal towns increased 2% to $451,000.