Increased demand for second homes favored smaller towns
The Mountain-West region[1] is the hottest housing market in the country. Of the 20 cities covered in the S&P CoreLogic Case-Shiller Home Price Index, Phoenix had the fastest year-over-year appreciation in December 2021, growing 32.5% annually. Another popular market was Denver, where prices increased 109% compared to the previous peak in August 2006. Right behind Denver was Boise, Idaho. According to the CoreLogic Home Price Insights Report[2], Boise real estate appreciated 22% in 2021, and the average homeowner equity increased by $64,000 from December 2020 to December 2021.
Homebuyer interest in the Mountain-West can be attributed to several factors. The region has a fundamentally sound housing market that has had steady population growth and wage increases for decades, making it a reliable bet for investors. Also, it is a logical relocation point for people who are priced out of expensive cities on the West Coast. Finally, the Mountain-West has a relatively strong supply of detached single-family homes that can facilitate remote work and are available at reasonable prices in low-density areas with many outdoor amenities — reasons that have become more relevant over the past two years.
The move out of densely populated areas is very well documented, and most of the evidence has focused on the more expensive suburban zones of large metropolitan areas[3] since this is where much of the residential real estate activity was concentrated after March 2020. Data from CoreLogic’s Home Equity Report[4] suggests that the real estate boom goes beyond the suburbs, and Table 1 shows the top 10 locations to gain in home equity by Core-Based Statistical Area (CBSA). This includes both metropolitan areas with an urbanized population of more than 50,000 and micropolitan areas with an urbanized population of 10,000 – 50,000. Half of these locations were in the Mountain-West and very close to ski resorts.
Table 1: Top 10 CBSAs in Average Equity Increase, Q4 2020 – Q4 2021
| Average Equity Q4 2021 | Q4 2020-Q4 2021 Change | |
| Summit Park, UT | $981,200 | $264,200 |
| San Jose-Sunnyvale-Santa Clara, CA | $1,109,100 | $213,500 |
| Key West, FL | $657,700 | $212,700 |
| Edwards, CO | $960,400 | $185,700 |
| Heber, UT | $514,200 | $178,600 |
| Santa Cruz-Watsonville, CA | $822,500 | $174,000 |
| Santa Maria-Santa Barbara, CA | $685,500 | $173,300 |
| Hailey, ID | $789,700 | $166,500 |
| Naples-Immokalee-Marco Island, FL | $462,900 | $165,500 |
| Breckenridge, CO | $664,400 | $164,100 |
Figure 1: Share of Total Residential Purchases on Second Homes, 2017 - 2021
Though not in the Mountain-West, many of the other cities in Table 1 (Santa Barbara, California; Santa Cruz, California; Key West, Florida; and Naples, Florida) underscore the increase in demand for outdoor and natural amenities with second-home purchases. The importance of having outdoor amenities can be seen in the high share of second homes found in cities with access to ski resorts, national forests, parks or oceans. Figure 1 charts the average second-home purchase share for 10 CBSAs against the average U.S. rate. We see the average purchase in a CBSA is 1.4 to 1.5 times more likely to be a second home in the list of top 10 equity gainers than the rest of the country.
Table 2: Top 10 CBSAs in Average Equity Increase, Q4 2017– Q4 2018
| Average Equity | Dec 2017-Dec 2018 Change | |
| Mountain Home, AR | $285,800 | $182,300 |
| Butte-Silver Bow, MT | $284,100 | $123,400 |
| Glenwood Springs, CO | $537,600 | $109,100 |
| Vineyard Haven, MA | $624,300 | $80,400 |
| Hailey, ID | $477,200 | $73,000 |
| Summit Park, UT | $636,600 | $61,200 |
| Edwards, CO | $643,600 | $58,800 |
| Heber, UT | $274,800 | $54,200 |
| Kapaa, HI | $405,000 | $52,700 |
| Hereford, TX | $67,800 | $51,800 |
Despite the migration away from densely populated regions, this trend should not be exaggerated. Table 2 shows the top 10 locations to gain home equity in Q4 2018, which was well before any sign of the pandemic. Four of the cities that had the largest home equity gains in 2018 were also top performers in 2021, though the amount of equity gained was much less in 2018 than in 2021. However, the Mountain-West has been growing for decades, so it is fairer to say that the pandemic amplified a pre-existing trend rather than created one.
2022 CoreLogic, Inc. , All rights reserved.
[1] The U.S. Census Bureau defines the Mountain-West as the region encompassing Arizona, Colorado, Idaho, New Mexico, Montana, Utah, Nevada and Wyoming. https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf
[2] https://www.corelogic.com/intelligence/u-s-home-price-insights/
[3] https://www.corelogic.com/intelligence/find-stories/hidden-treasure-boise-and-the-mountain-west-housing-boom/
[4] https://www.corelogic.com/intelligence/homeowners-gained-over-3-2-trillion-in-home-equity-in-2021/
