Seasonal Towns Feel the Sting as Second-Home Demand Fades
A glut of vacation homes for sale and tougher regulations on Airbnb and short-term apartment rentals in some localities means that many second-home owners are watching the bubbling income stream they dreamed of drying up. And as the well dries up, so does the market for those vacation homes, especially in seasonal towns.
A new report from Redfin defines seasonal towns as “those where more than 30% of the housing stock is used only seasonally or occasionally.” Examples include Aspen, CO, Bethany Beach, DE, Boca Raton, FL, and Scottsdale, AZ.
According to Redfin, 9% of all home sales in the U.S. are in seasonal towns. And the number of homes sold in those towns fell 3% from July 2024 to July 2025. For non-seasonal towns, the drop was only 1%.
Vacation homes were worst affected because they’re often regarded as investments and are first to be given up when finances get tight. Furthermore, in an uncertain economy, buyers are more likely to prioritize purchasing a primary residence.
A recent Redfin analysis found that mortgages for second homes in the U.S. dropped to their lowest level in at least six years in 2024.
In addition, return to office policies mean second homes no longer offer an alternative to in-office presence, causing many owners to list them for sale.
Not only are many Americans holding off from buying second homes, many that already own them are listing them for sale to cash out before prices soften more, Redfin chief economist Daryl Fairweather noted.
Among the states worst affected is Florida, which houses 104 of the 288 seasonal towns included in the analysis. Miami and Fort Lauderdale have seen the sharpest drops in pending home sales.
“The local condo market is brutal,” commented Cecilia Cordova, a Redfin agent based in Miami. She noted that condo owners returning to the Northeast to live full-time want to sell instead of becoming landlords. That’s because homeowners’ association fees in Florida are so high they would earn less from rent than they would pay in mortgage payments plus fees.
Tough regulations meant to limit the domination of short-term rentals over permanent housing in some markets are also having an effect. “Tightened short-term rental regulations make it more time-consuming and difficult to manage a second home as a rental property,” the report stated, noting that many listings have been pulled in Los Angeles for this reason.
California does not have a statewide limit on short-term rentals, but individual cities and counties can impose their own rules, ranging from total bans to other restrictions.
As a result of the glut of vacation homes on the market prices are being pushed down. The total supply of homes for sale in seasonal towns climbed 17% from July 2024 to July 2025, compared to 14% in non-seasonal towns.
Yet new listings in seasonal towns declined 3% in the period – the biggest drop in two years -- compared to 2% in non-seasonal towns, as some homeowners decided to ride out the storm in a buyer’s market.
And despite the oversupply, the median price in seasonal towns remained flat at $583,000 -- over $100,000 more than in non-seasonal towns, where prices rose 2% to $451,000.
Source: GlobeSt/ALM