Pacaso, the trailblazer in formalizing the modern model of co-ownership, revealed through its inaugural category report that the trend of purchasing a home before marriage or without formal coupling is gaining traction, as reported by Inman in a Feb. 14 press release.
The report delved into the phenomenon of co-ownership in second homes across ten of the nation’s most active counties, revealing a significant 21 percent increase in the trend in 2023. This surge in co-owned closings coincides with a rise in the Housing Price Index (HPI) in these counties, which saw an uptick of 6.8 percent. This data suggests that co-ownership is emerging as a viable solution to address the nation’s pressing affordability challenges, a finding corroborated by Zillow’s Consumer Housing Trends report.
Zillow’s research indicated that affordability was the primary motivator for co-ownership among the 6,500 surveyed buyers. Pacaso noted that this trend extends beyond regional boundaries, with notable growth observed in diverse states such as Pennsylvania, Maine, West Virginia, Nebraska, and Virginia.
The surge in co-ownership is evident across both urban and rural housing markets, underscoring its widespread and inclusive presence in the real estate landscape.
Pacaso primarily targets second homes in luxury vacation markets, employing a model where the company invests in a property and sells shares to buyers who then co-own the home with others. This approach reduces the entry barrier for prospective vacation homeowners, consolidating up to eight owners in a single property with designated usage periods, thus minimizing the number of infrequently used or short-term rental properties in the vicinity.
Austin Allison, CEO and co-founder of Pacaso, highlighted how co-owning with friends or family offers a solution to mitigate the current affordability crisis in the real estate market. He emphasized that regions experiencing significant co-ownership growth also witnessed notable year-over-year growth in home prices.
The counties examined by Pacaso encompassed various regions, including both urban and rural areas such as Stafford, Henrico, Fairfax, Greene, Martinsville, and Suffolk in Virginia, as well as Morgan County in Utah, Cass County in North Dakota, Dodge County in Minnesota, and Weld County in Colorado.
Among these counties, Morgan experienced the most substantial growth, with a 42.7 percent year-over-year increase, while Cass County in North Dakota and Dodge County in Minnesota also saw significant upticks of 21 percent and 16 percent, respectively.
Pacaso defines co-owned homes as sales involving various vesting codes and parties, excluding married couples, and their 2023 portfolio revenue surpassed $1 billion. With over 1,500 owners in 40 locations worldwide, including Mexico, London, France, and Spain, Pacaso’s marketplace witnessed a 10 percent growth in 2023, with a notable 45 percent year-over-year increase in shares sold reported in November.
Marnie Blanco, Pacaso’s Senior Vice President of Industry Relations, highlighted that 2024 holds significant promise for the company in an interview with Inman.