Washington County tops chart for growth in luxury second homes market

Just under 27% of real estate transactions that were completed in Washington County over the past year have involved luxury second-home mortgage rate locks.

(Mark Eddington | The Salt Lake Tribune) Homes in the Green Springs neighborhood in Washington, Monday, Dec. 26, 2022.

St. George • It will never be confused with Napa Valley, Martha’s Vineyard or Beverly Hills, but Washington County in southwestern Utah has bragging rights in at least one area — the growth of its luxury second-home market.

Pacaso, a San Francisco-based company that specializes in helping people buy or co-own second homes, has named Washington County the nation’s fastest-growing market for luxury second homes, which are defined as homes designated for seasonal or recreation use that have sold for $1 million or more.

Just under 27% of real estate transactions that were completed in Washington County over the past year have involved luxury second-home mortgage rate locks, a 10.3% increase over the year before, according to a report Pacaso released last month. Second-home mortgage rate lock data is an indicator of second-home buying activity.

That means, according to the report, Washington County saw the biggest annual gain of luxury second-home mortgage lock rates in the nation, eclipsing second-place finisher Osceola County Florida by more than 40% and far surpassing the rates in more traditional luxury home destinations like New York County, California’s Napa County and New Mexico’s Santa Fe County.

The average price for luxury second homes in Washington County over the past year was $1.3 million.

Prices for luxury homes in Washington County over the past decade have ranged from $1.3 million to $10 million. All told, 559 homes have sold within that price range during the last 10 years, 514 of them cash sales, according to the Washington County Multiple Listing Service.

Robert Bolar, a top realtor with Summit Sotheby’s International Realty in St. George who specializes in luxury homes, is not surprised.

(Mark Eddington | The Salt Lake Tribune) Homes in the Green Springs neighborhood in Washington, Monday, Dec. 26, 2022.

“The number one draw for my clients — who come from all over the country — is the sun, which shines here 300 or more days a year,” he said. “Whether it’s tricking you into thinking spring has sprung early or giving you one more beach day during an autumn afternoon, the sunshine in this area seems to keep my clients embracing life outdoors.”

It certainly warmed Heber resident Sam Allred to the idea of purchasing a luxury second home in Green Springs.

“We wanted to be warmer, in a second home that was only about four hours away [from our primary residence] and in an area that had lots to do year-round,” said Allred, a management consultant for CPA firms across the country.

Realtors say Washington County’s cultural and sporting events and outdoor recreational opportunities, as well as its proximity to national and state parks, attract second-home buyers and help them weather southwest Utah’s unbearably hot summer months. Moreover, St. George Regional Airport offers easy access to international airports in Salt Lake City, Phoenix and Denver, among others.

“Education and jobs are also a key feature, though not necessarily to those looking into second homes,” said Emily Merkley, CEO of the Washington County Board of Realtors. “It’s important though, as it factors into the growth projections for our area.”

Washington County, which includes the St. George metro area, was the nation’s fastest-growing metro area by percentage between July 2020 and July 2021.

(Mark Eddington | The Salt Lake Tribune) A luxury home in St. George, Monday, Dec. 26, 2022.

“Anyone with disposable income looking for a sound investment (a second home) in an area seeing growth and positive appreciation, surrounded by outdoor amenities, and that’s easier than ever to access, will find Washington County appealing,” Merkley added.

Rising interest rates have dramatically slowed real estate sales across the country with one notable exception — the luxury real estate market. Luxury second-home transactions increased 25% during the second quarter of 2022 over the same period last year, according to Pacaso.

“Despite a national cooling in residential real estate, we’re finding that the luxury real estate market is still in a league of its own,” said Pacaso CEO Austin Allison.

Merkley said real estate sales in Washington County have tapered off substantially from the post-pandemic boom from 2020 to 2022. She said luxury homes, which the board considers anything over $750,000, are still selling fairly well. As for the sale of primary versus secondary homes, she added, the county’s multiple listing service doesn’t track that information.

Still, Merkley said Pacaso’s figures for luxury second-home sales are likely fairly accurate since “high and rising interest rates do not affect this demographic of buyers as much as it would [for those] purchasing their primary residence. Most are entering the [secondary-home] market with cash, or large amounts of cash, and therefore are not reliant on financing,” she said.

Jeff Sproul, the principal broker for Kayenta Homes and Properties, said the market for the luxury homes he is selling — which range from $1 million to $3 million — has slowed but not gone soft.

“We still can’t keep homes on the market for very long,” Sproul said. “Even with the slowdown in real estate, we are doing fairly well because most of the buyers here pay cash.”

Sproul said roughly 30% of Kayenta’s properties are luxury second homes.

“Most of our buyers are from northern Utah. We get a lot of people from Park City,” Sproul continued. “We also get buyers from California, Jackson Hole, Wyoming, and the East Coast.”

To make luxury second homes more affordable, some cash buyers team up to lessen the financial load. Sam Allred and his wife Marlene, for example, joined five other couples in purchasing a luxury home in Green Springs a few years ago and have since added a pool and a hot tub. Each couple has use of the home for about 10 weeks out of a year, which is planned out about five years in advance.

“The remarkable thing is that, individually, I’m not sure we would have looked at this home,” Allred said. “If we had spent the money to purchase it on our own, we would feel like we should be down there all the time … But by dividing the price of the home by six, it makes it wonderfully affordable for everyone, and you end up with a beautiful home.”

Among Washington County’s top luxury developments right now, realtors agree, are Desert Color, Kayenta, Entrada, Stone Cliff and the Ledges.

Wherever luxury second homes in the county are located, Bolar said, they share two things in common: “stunning natural beauty and plenty of Instagrammable moments.”

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