As home prices rise, a real estate start-up launched in October by two former Zillow executives sees opportunity.
Cincinnati-based Pacso buys luxury single-family vacation homes and then sells them to groups of buyers through a partial ownership model as part of an LLC, co-founder and CEO Austin Ellison told CNBC Friday.
“Most second homes sit vacant for 11 months per year,” Allison said on “The Exchange.” “We are making better use of housing stock by modernizing this age-old practice, which we call co-ownership.”
Allison said the company operates differently from a timeshare, which sells the right to use a certain amount of time in an asset.
The company also provides integrated financing, interior design, property management and proprietary scheduling technology services.
“Imagine if you and a small group of friends decided you wanted to build a house together,” Allison explained. “That’s what Pacasso does, except we handle all the details—everything from bill payment and maintenance to design—so you can enjoy your second home and not worry about headaches.”
Allison previously told the Napa Valley Register that eight buyers can purchase shares of a property, but most of the company’s homes are split between five and six buyers. Pacso owners can sell their shares after 12 months of being a homeowner.
“The owners have complete control,” he said, “that Pacasso is effectively a property manager when you buy your one-eighth or one-quarter interest in the home.”
According to a report by real estate brokerage Redfin, holiday home prices reached an average cost of $468,000 during the COVID pandemic in seasonal cities. Redfin CEO Glenn Kellman told CNBC in October 2020 that demand for these second homes was being driven primarily by affluent professionals who were able to work remotely.
However, according to Redfin, the number of buyers locked in mortgage rates for vacation homes fell 11.1% year over year in June of this year, indicating a possible end to the boom.
Pacso announced in March that it had raised $75 million in a Series B funding round, putting the start-up in $90 million. The company now claims “unicorn” status, meaning the private firm is valued at over $1 billion.