Vacation homes were once real estate's hottest play. Now they're a nightmare.
The vacation home market, which surged during the pandemic, is cooling significantly as investors face high costs and plateauing rental demand. Sellers in popular tourist destinations like Gatlinburg and Big Bear Lake are now forced to accept deep price cuts to offload properties.
Why it matters
This trend signals a broader correction in the real estate market as the post-pandemic short-term rental boom loses momentum.
Gary Doss, a longtime real estate agent in Big Bear Lake, California, says sellers need to have "a tough conversation." Ethan Noah Roy for BI John Kenney is the second real estate agent to take a stab at selling 317 Matterhorn Drive, a rustic, two-bedroom cabin in Gatlinburg, Tennessee. The getaway sits in the foothills of the Smoky Mountains, about a 30-minute drive from Dollywood , in an area that draws millions of tourists each year. At the height of the housing boom, it might have sparked a bidding war . Instead, it's withered on the market for two years. The home has seen a steady drip of price cuts and relistings since January 2024, when it debuted at $850,000. The owners are now asking for just under $600,000, a decrease of nearly 30%. "NEW PRICE, BIG MOUNTAIN ENERGY!" the listing reads.
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