May 14, 2023 - Real Estate

Buying a vacation home is out; trading homes is in

Illustration of two keys, passing through a phone and trading places.

Illustration: Brendan Lynch/Axios

Home-swap networks are growing, as owning a vacation property has become less attractive.

Driving the news: In March, HomeExchange, a major swapper that has about 280 homes in Minnesota with listings in cities such as Minneapolis, St. Louis Park and Edina, purchased its U.K.-based competitor Love Home Swap.

  • Last month, San Francisco-based Kindred announced it will expand its members-only business overseas. The platform has more than 2,500 homes in over 50 cities across North America and will debut later this year in major European cities including London and Berlin.

The big picture: Across the country, demand for second homes is down more than half from pre-pandemic levels, fueled by high costs, a cooling short-term rental market and a pullback in remote work, per a new Redfin report.

Zoom in: Minnesota is feeling that decline, says Lyndon Smith with Edina Realty, who's been helping people find vacation homes for 20 years.

  • Still-elevated interest rates and tight inventory are the biggest drivers of the slowdown, he tells Axios, pointing out there's "only so much lakeshore."
  • When rates were lower, "the people who wanted to buy a lake home, did, because it was such a bargain," Smith says.
  • "Right now, people aren't selling because there's nothing out there" to move into.

Between the lines: How people travel has changed, boosting the "sharing economy" that's now flush with Airbnb-style rental marketplaces.

How it works: Kindred has a "give-to-get" model. You earn credits toward booking a place by hosting a member in your own home.

  • The intrigue: There are no nightly rental fees. For each trip, members cover the cost of cleaning and a service fee capped at $25 per night.
  • Membership is pay-as-you-go and there's a waitlist to join, as homes are accepted based on supply and demand across locations.

The bottom line: Sharing is caring — and a way to offset pricier vacations during what's expected to be a record-setting travel season.

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