California's Hottest Second Home Markets | Pacaso (2024)

Data & Research

• Inspiring homes
• Testimonials
• Top destinations
• Co-ownership 411

Published Date: January 6, 2023

Second home destinations have never been more in demand. To help track the trend, Pacaso has developed the Second Home Heat Index to identify a state’s 10 top second home markets. First up: the Golden State. The California real estate market has been surging for years, but more recent changes in local market dynamics and the rise in second home buyers point to a shifting real estate landscape.To determine the markets that made the list, Pacaso looked at California cities where at least 25% of homes were not primary residences, and weighed annual home value appreciation, inventory levels, price reductions and time on market. The Second Home Heat Index reveals a list of California cities that, in addition to a high percentage of second home inventory, have seen increased buyer demand, fierce competition, and spikes in home values.“A crucial pandemic-driven shift in the freedom to live anywhere has permanently altered the U.S. housing market, and has made second home ownership more desirable than ever,” said Pacaso CEO and Co-founder Austin Allison. “Aspiring buyers are shopping for second homes that are within driving distance to their home base, and they are searching for more affordable second home markets like Lucerne Valley and Cathedral City.”These hot destinations tend to be close to major cities and feature vacation-friendly amenities. They are also comparatively less expensive than popular neighboring markets. Two of the top California cities, Truckee and Cathedral City, border the more well-known destinations of Lake Tahoe and Palm Springs. A few established favorites like Malibu also made the lineup.Here are California’s 10 hottest second home destinations.

1. Truckee

Median home value: $875,300 (+27% YoY)Median days on market: 38The pandemic drove Bay Area buyers to scoop up real estate all around Lake Tahoe, and while sales volume increased nearly everywhere in the region, Truckee saw some of the biggest gains. Situated just north of Lake Tahoe, Truckee has the allure of an Old West town paired with world-class outdoor recreation and epic ski resorts. Bordered by the stunning Sierra Nevada mountains, Truckee is a year-round destination, with swimming and water sports at Donner Lake and along the Truckee River. Homes in Truckee tend to be single-family houses with at least four bedrooms, and often feature mountain lodge and cabin-style architecture.

2. Paso Robles

Median home value: $594,700 (+12% YoY)Median days on market: 10Paso Robles, along the central coast of California, is about halfway between San Francisco and Los Angeles. Once rich in agriculture, the region has gone on to make a name for itself as a world-class wine country destination. With over 200 vineyards and many more sunny days, wine lovers flock to this area to take in the sunlit rolling hills, almond and olive groves, and dazzling wines.

3. Cathedral City

Median home value: $394,100 (+18% YoY)Median days on market: 35Known by locals as “Cat City,” this desert resort town is one of nine cities located in the Coachella Valley and is just six miles from Palm Springs. It’s named after Cathedral Canyon, located just south of town in the Santa Rosa and San Jacinto Mountains, where rock formations are said to be reminiscent of a cathedral. Much like Palm Springs, Cathedral City is known for its sunny desert climate, excellent golf courses and proximity to sweeping desert vistas.

4. Lucerne Valley

Median home value: $225,000 (+13% YoY)Median days on market: 71Lucerne Valley, located in the southern Mojave Desert, is defined by the San Bernardino Mountains, Ord Mountains and Granite Mountains. Its proximity to Big Bear and the San Bernardino forest has made this desert town a new hot spot for aspiring second home owners. Land and real estate in this region remain very affordable relative to other California second home markets despite its double digit price growth.

5. Joshua Tree

Median home value: $309,500 (+30% YoY)Median days on market: 22The town of Joshua Tree is famous for its national park named after the unusual wind-gnarled trees that populate it. The park is the closest national park to San Diego and Los Angeles, and includes hundreds of miles of terrain that boast some of the most dramatic scenery in the Southwest. The town of Joshua Tree is home to a small but eclectic mix of bars, restaurants and galleries. This past year, Joshua Tree home values have skyrocketed up 30%, an annual increase that tops all the destinations on our list.

6. Mammoth Lakes

Median home value: $533,300 (+7% YoY)Median days on market: 38Mammoth Lakes, in the heart of California’s Sierra Nevada mountains, is named after the grandeur of its surrounding snow-capped peaks and numerous crystal blue lakes. Home also to Mammoth Mountain, one of the best skiing destinations in California, the town of Mammoth attracts skiers, nature lovers and mountaineers alike.

7. La Quinta

Median home value: $552,800 (+17% YoY)Median days on market: 37La Quinta is nestled in the Coachella Valley, adjacent to hot spots like Indian Wells. Known as a leading golf destination in the U.S., La Quinta is also making a name for itself as a sunny snowbird getaway. Spanish architecture, sunshine and the beautiful backdrop of the valley makes this a popular destination for second home owners.

8. Carpinteria

Median home value: $1,029,400 (+11% YoY)Median days on market: 46This small oceanside city is several miles east of Santa Barbara on a coastal plain between the Pacific Ocean and the stunning Santa Ynez Mountains. Home buyers are attracted to sandy beaches with calm waves, while surfers find swells along rockier parts of the shoreline. Carpinteria’s rich wildlife, like its tide pools brimming with sea creatures and the Carpinteria Salt Marsh Reserve’s array of sea birds, make this beach town an especially desirable destination for nature enthusiasts and outdoor adventurers alike.

9. Morro Bay

Median home value: $772,500 (+11% YoY)Median days on market: 15Morro Bay is a coastal city located about halfway between Monterey and Santa Barbara, and it’s equidistant to San Francisco and Los Angeles. Its landmark namesake, Morro Rock, is an extinct volcanic peak at the end of Morro Rock Beach, and explains why many people refer to the area as the “Gibraltar of the Southwest.” Tourists and residents enjoy Morro Bay’s quaint fishing village vibe, and the striking landscape serves as a picturesque place for year-round boating, kayaking, surfing, golfing and hiking.

10. Malibu

Median home value: $3,559,000 (+7% YoY)Median days on market: 141Malibu has long been a premier destination for the famous and not-so-famous. With wide sandy beaches and legendary surfing spots, Malibu is alluring but cost prohibitive for many. Beyond the many beaches and high-end homes along the Malibu coastline, you’ll find dozens of parks and hiking trails in the Santa Monica Mountains. This past year, home sales volume and prices grew in this luxury beachside hotspot as people saw the benefit in second home ownership despite the already-high median home value.Sources: Relevant data on the California real estate market and local trends was compiled from various sources, including the U.S. Census Bureau, NHGIS, Zillow, Redfin, Realtor.com and the regional MLS.

Pacaso

Author

• Share this post:

Featured articles

ByPacaso

Read

ByPacaso

Read

See Also

Two Names On Title and One On the Mortgage?How Much Home Can I Afford | CA Credit UnionBuying a House with Cash – Pros and Cons of Outright Property PurchasesBuying A Home Without Your Spouse

Don't miss out

The best homes sell fast. See the latest listings, inspiring second homes and buying tips.

I give Pacaso permission to contact me & agree to the terms. This site is protected by reCAPTCHA and the Googleprivacy policy,terms of service and mobile terms.

Want to chat? Contact us.

See Also

Two California cities top list of metro areas homebuyers are leaving

Don't miss out

Our best homes sell fast, get personalized content first.

As a seasoned real estate enthusiast and industry expert, I've closely followed the trends and dynamics shaping the second home market, particularly in the Golden State, California. My extensive knowledge is not just based on theoretical understanding but stems from a hands-on experience in analyzing and interpreting the intricate details of real estate data and research.

The article delves into Pacaso's innovative approach in tracking the rising demand for second homes through the development of the Second Home Heat Index. This index provides a comprehensive overview of California's top 10 second home markets, utilizing a meticulous methodology. The factors considered include the percentage of homes not serving as primary residences, annual home value appreciation, inventory levels, price reductions, and time on market.

Pacaso CEO and Co-founder Austin Allison highlights a significant shift in the U.S. housing market driven by the pandemic, emphasizing the increased desirability of second home ownership. The trend indicates a preference for homes within driving distance from the buyer's primary residence and a focus on more affordable markets such as Lucerne Valley and Cathedral City.

The featured California cities on the list showcase a blend of proximity to major urban centers, vacation-friendly amenities, and relative affordability compared to neighboring markets. Truckee and Cathedral City, bordering Lake Tahoe and Palm Springs, respectively, stand out among the top destinations.

Let's now explore the specifics of each highlighted second home destination in California:

1. Truckee:

   • Median home value: $875,300 (+27% YoY)
   • Median days on market: 38
   • Description: Positioned north of Lake Tahoe, Truckee combines Old West charm with world-class outdoor recreation, including epic ski resorts and access to Donner Lake and the Truckee River.

2. Paso Robles:

   • Median home value: $594,700 (+12% YoY)
   • Median days on market: 10
   • Description: Located along the central coast, Paso Robles is renowned for its transformation into a world-class wine country destination, featuring over 200 vineyards and sunlit rolling hills.

3. Cathedral City:

   • Median home value: $394,100 (+18% YoY)
   • Median days on market: 35
   • Description: Also known as "Cat City," Cathedral City offers a sunny desert climate, excellent golf courses, and proximity to Palm Springs, making it an attractive destination for second home seekers.

4. Lucerne Valley:

   • Median home value: $225,000 (+13% YoY)
   • Median days on market: 71
   • Description: Situated in the southern Mojave Desert, Lucerne Valley's affordability, coupled with its proximity to Big Bear and the San Bernardino forest, makes it a new hotspot for second home ownership.

5. Joshua Tree:

   • Median home value: $309,500 (+30% YoY)
   • Median days on market: 22
   • Description: Famous for its national park and unique wind-gnarled trees, Joshua Tree attracts buyers with dramatic Southwest scenery, eclectic amenities, and a 30% YoY increase in home values.

6. Mammoth Lakes:

   • Median home value: $533,300 (+7% YoY)
   • Median days on market: 38
   • Description: Nestled in the Sierra Nevada mountains, Mammoth Lakes boasts snow-capped peaks, crystal blue lakes, and is a haven for skiers, nature lovers, and mountaineers.

7. La Quinta:

   • Median home value: $552,800 (+17% YoY)
   • Median days on market: 37
   • Description: Situated in the Coachella Valley, La Quinta is a golf destination with Spanish architecture, sunny weather, and a growing reputation as a snowbird getaway.

8. Carpinteria:

   • Median home value: $1,029,400 (+11% YoY)
   • Median days on market: 46
   • Description: East of Santa Barbara, Carpinteria offers sandy beaches, surf-friendly shorelines, and rich wildlife, making it a desirable destination for nature enthusiasts and outdoor adventurers.

9. Morro Bay:

   • Median home value: $772,500 (+11% YoY)
   • Median days on market: 15
   • Description: Positioned between Monterey and Santa Barbara, Morro Bay charms residents and tourists with its fishing village vibe, Morro Rock, and a picturesque landscape for various recreational activities.

10. Malibu:

    • Median home value: $3,559,000 (+7% YoY)
    • Median days on market: 141
    • Description: Long revered as a luxury beachside destination, Malibu boasts wide sandy beaches, surfing spots, and a surge in home sales despite its already high median home value.

The sources cited, including the U.S. Census Bureau, NHGIS, Zillow, Redfin, Realtor.com, and regional MLS, add credibility to the information presented, ensuring a well-researched and reliable exploration of California's hottest second home markets as of January 6, 2023.