The Hidden Truth About Vacation Homes Most Los Gatos Buyers Miss
Timothy Alston | Broker
Aegis Luxury Real Estate · DRE# 01328224
Published
June 24, 2021
Foothill sophistication, downtown heart
Vacation homes in Los Gatos and across the country are still seeing strong demand from buyers, even as pandemic-era urgency has settled. Data from the National Association of Realtors shows vacation home sales rose 16.4% in 2020 and accelerated further into 2021, outpacing the broader residential market by a wide margin. If you own or are considering a second home, the fundamentals worth understanding are inventory, pricing, and what sustained demand actually means for your position.
You know how it goes. Life gets busy, prices shift, and somewhere between the headlines and the rate talk, you stop asking yourself the question that actually matters: what is a second home really worth to you, and have you thought about what it could be worth to someone else?
A lot of buyers and owners in Los Gatos are sitting with that question right now. Some bought a vacation property during the pandemic and are not sure what to do with it. Others have been watching the market from a distance, wondering if they missed their window. But here is the part most people have not stopped to think about yet: the window may not be as closed as you think.
Why Vacation Homes Still Show Remarkable Demand
Have you ever stopped to think about why vacation homes held their value so stubbornly, even as the world reopened? It is not just sentiment. It is supply. When the pandemic shifted how and where people worked, vacation home sales jumped 16.4% in 2020 alone, outpacing the 5.6% growth seen across the broader residential market, according to the National Association of Realtors.
Then the numbers accelerated. Vacation home sales were up 57.2% compared to the prior year during just the first four months of 2021, while total existing-home sales grew by 20% in the same period. Can you see how that gap tells a story about where buyers were putting their priorities?
And prices followed. Home values in vacation-heavy counties rose by 14.2% on average, compared to 10.1% in non-vacation counties. Demand was not just still strong. It was running ahead of the broader market.
Before the pandemic, vacation homes were largely a luxury consideration, driven by retirees and high earners seeking seasonal retreats. Demand was steady but measured, tethered to in-person work schedules and geographic predictability. Buyers in markets like Los Gatos viewed second properties as aspirational, not urgent. That dynamic was about to change in ways no one anticipated.
What Changed, and What That Means If You Own a Vacation Home Today
What does your current situation actually look like? If you purchased a vacation home during the last few years, you may already be sitting on equity you have not fully accounted for. Zelman and Associates tracked a significant increase in second home sales throughout the country during this period, and the pricing data confirms what many owners are quietly discovering: the value is there.
But here is the question worth sitting with. If you could sell that property today, at a price you likely could not have imagined five years ago, would you? Or is the value in keeping it, knowing that low inventory continues to support pricing and that buyer interest has not meaningfully faded?
Neither answer is wrong. The point is that you have options, and knowing what the market is doing gives you the clarity to choose deliberately rather than reactively.
When offices closed and classrooms went virtual, buyers stopped treating distance as a dealbreaker. Vacation home counties absorbed a wave of demand that traditional suburban markets could not fully capture. Sales in these counties outpaced the broader market by ratios not seen in recent history. Buyers from high-cost urban areas, including many connected to Silicon Valley, began treating vacation destinations as primary or semi-primary residences, compressing timelines and pushing prices higher across the board.
The Hidden Cost of Waiting Too Long to Decide
What happens if nothing changes? If you keep postponing the decision about your vacation home for another two or three years, where does that actually leave you?
Inventory in vacation-oriented markets remains limited. When sellers do list, they tend to do well. But the gap between a well-timed decision and a reactive one can be meaningful, both in price achieved and in carrying costs absorbed while you wait.
How long have you been thinking about this without a clear picture of what the numbers look like for your specific situation?
Rising mortgage rates cooled transaction volume across the board, but vacation home markets showed a different pattern. Sellers who had purchased at lower price points largely chose to hold, unwilling to trade an advantageous loan for current rates. This kept supply tight even as some demand softened. The result: vacation homes in desirable counties maintained pricing resilience that outpaced expectations, leaving motivated sellers in a structurally favorable position compared to the broader market.
What This Looks Like for Buyers Considering Vacation Homes
If you are on the other side of this, if you have been watching Los Gatos homes for sale and wondering whether a second home still makes sense as an investment, the data gives you something to work with.
Vacation home counties have shown faster price growth and more resilient demand than the average residential market. That pattern does not emerge randomly. It reflects something real about how buyers assign value to properties that offer both lifestyle and long-term equity.
The Los Gatos market, with its proximity to both Silicon Valley employment and the natural beauty of the Santa Cruz Mountains, tends to attract buyers who think in those terms. Homes in Los Gatos connected to that lifestyle profile have historically held their value in ways that reward patience. Does that match what you have been looking for?
If you are weighing a vacation home purchase against other uses of your capital, the question worth asking is not whether now is perfect. The question is whether waiting materially improves your position, or whether it just defers the decision while the market continues to move.
The Path Forward, On Your Terms
Based on what the data shows, and what buyers and sellers are navigating right now, vacation homes continue to occupy a unique position in the market. Supply is constrained. Demand is still strong. And the spread between vacation county pricing and overall market pricing suggests these properties are still being rewarded.
Whether you own one, are thinking about buying one, or are simply trying to understand whether the moment has passed, the conversation is worth having. Not a pitch. Not pressure. Just a clear look at where you are and what your options actually are.
Do you feel like it might be worth a straightforward conversation to see what the numbers look like for your specific situation? If so, Timothy Alston, Broker, DRE# 01328224, Aegis Luxury Real Estate, is available at (408) 207-4593. The next step is yours to take whenever it makes sense.
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Broker · DRE# 01328224
Aegis Luxury Real Estate
Harvard Business School Online, Certified Master Negotiation
23+ Years Silicon Valley Real Estate Experience
Retired Military Veteran
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Aegis Luxury Real Estate · Timothy Alston, Broker, DRE# 01328224 · 10080 N. Wolfe Rd Ste SW3-200, Cupertino CA 95014 · (408) 207-4593
Last updated: July 10, 2026 | Data reflects July 2026 MLS statistics
