This Is the Best Place to Buy a Vacation Home

By Douglas A. McIntyre Published Sep 20, 8:00AM EDT

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This Is the Best Place to Buy a Vacation Home — © Doug Hendricks / iStock via Getty Images

The COVID-19 pandemic has triggered a migration from large cities on America’s coasts to places inland. One reason is the cost of real estate in places like New York City, Los Angeles, San Francisco, and San Jose. Another is that more people can work from home. Many companies now allow for either hybrid work systems, under which people can split their time between home and office, or systems under which people do not have to come to the office at all.

Some people are not looking to fully move, but are looking for a second, vacation, home where they can spend some or all of their time. Real estate rental company Vacasa has just issued its fourth Top 25 Best Places to Buy a Vacation Home report, finding that based on the rate of return on investment, the best place to buy a vacation home is Gatlinburg, Tennessee.

Vacasa’s 2021 Vacation Rental Buyer Report also found that nearly 70% of second-home buyers made their first purchase this year, and many of these homes will be used as rental properties. Over a third of the buyers want to spend under $399,000, which is more than the median price for all homes nationwide. Guest demand for rentals has also surged. Here are the most expensive countries to rent a one-bedroom apartment.

Gatlinburg, Tennessee, which is near the Great Smoky Mountains National Park and southeast of Knoxville, is the city with the best return on investment for second homes. The city with the second best return is St. Augustine, Florida, which is the oldest city in the country, founded in 1565. It is along the east coast of Florida, south of Jacksonville and north of Palm Coast.

Third on the list is Gulf Shore, Alabama, which is southwest of Mobile. It is followed by Dauphin Island, Alabama, which is very close by, and then Norris Lake, Tennessee, which is east of Nashville, along the Kentucky border. Most places on this list tend to be near bodies of water or other points of interest. These were the most visited U.S. national parks in 2020.

These are the top 25 places to buy a vacation home and their median home prices

25. Holden Beach, NC
> Rate of return on investment: 3.4%
> Median home sale price: $580,847 — #3 out of 25 housing markets

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24. Corolla, NC
> Rate of return on investment: 3.9%
> Median home sale price: $608,953 — #2 out of 25 housing markets

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23. Florissant, CO
> Rate of return on investment: 4.0%
> Median home sale price: $367,000 — #14 out of 25 housing markets

22. Ellijay, GA
> Rate of return on investment: 4.2%
> Median home sale price: $281,402 — #24 out of 25 housing markets

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Sunrise on the Boardwalk by Arturo Donate

Sunrise on the Boardwalk (CC BY 2.0) by Arturo Donate

21. St. George Island, FL
> Rate of return on investment: 4.2%
> Median home sale price: $471,501 — #7 out of 25 housing markets

20. Banner Elk, NC
> Rate of return on investment: 4.3%
> Median home sale price: $331,290 — #19 out of 25 housing markets

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Pagosa Springs Sunrise (CC BY 2.0) by Derek Key

19. Pagosa Springs, CO
> Rate of return on investment: 4.3%
> Median home sale price: $361,320 — #16 out of 25 housing markets

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18. Litchfield Beach, SC
> Rate of return on investment: 4.5%
> Median home sale price: $499,259 — #6 out of 25 housing markets

20000912 26 Bear Lake, UT by David Wilson

20000912 26 Bear Lake, UT (CC BY 2.0) by David Wilson

17. Bear Lake, UT
> Rate of return on investment: 4.6%
> Median home sale price: $383,734 — #11 out of 25 housing markets

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16. Killington, VT
> Rate of return on investment: 4.7%
> Median home sale price: $317,336 — #22 out of 25 housing markets

15. Twentynine Palms, CA
> Rate of return on investment: 4.8%
> Median home sale price: $263,897 — #25 out of 25 housing markets

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Lone Peak @ Big Sky, MT (CC BY 2.0) by Kirk Olson

14. Big Sky, MT
> Rate of return on investment: 4.8%
> Median home sale price: $850,000 — #1 out of 25 housing markets

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13. Cle Elum, WA
> Rate of return on investment: 4.8%
> Median home sale price: $551,586 — #4 out of 25 housing markets

12. Rockaway Beach, OR
> Rate of return on investment: 5.0%
> Median home sale price: $330,831 — #20 out of 25 housing markets

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11. Big Bear, CA
> Rate of return on investment: 5.1%
> Median home sale price: $372,667 — #13 out of 25 housing markets

Red House (CC BY 2.0) by Tom Hilton

10. Ludlow, VT
> Rate of return on investment: 5.2%
> Median home sale price: $346,950 — #17 out of 25 housing markets

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9. Seaside, OR
> Rate of return on investment: 5.2%
> Median home sale price: $466,086 — #8 out of 25 housing markets

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8. Deep Creek Lake, MD
> Rate of return on investment: 5.7%
> Median home sale price: $439,367 — #9 out of 25 housing markets

7. Palm Springs, CA
> Rate of return on investment: 5.9%
> Median home sale price: $539,370 — #5 out of 25 housing markets

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6. Blue Ridge, GA
> Rate of return on investment: 6.1%
> Median home sale price: $290,934 — #23 out of 25 housing markets

5. Norris Lake, TN
> Rate of return on investment: 6.2%
> Median home sale price: $343,907 — #18 out of 25 housing markets

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4. Dauphin Island, AL
> Rate of return on investment: 6.8%
> Median home sale price: $382,699 — #12 out of 25 housing markets

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3. Gulf Shores, AL
> Rate of return on investment: 7.1%
> Median home sale price: $402,905 — #10 out of 25 housing markets

2. St. Augustine, FL
> Rate of return on investment: 7.4%
> Median home sale price: $365,576 — #15 out of 25 housing markets

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1. Gatlinburg, TN
> Rate of return on investment: 8.6%
> Median home sale price: $320,111 — #21 out of 25 housing markets

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.