Second-home buying is picking up again, slowly. Redfin reported in July that buyers took out 4.1% more second-home mortgages in 2025 than a year earlier, the first annual increase since the pandemic-era boom. Even so, second homes made up just 2.7% of all mortgage originations last year, a reminder of how few households can justify carrying a property they use only part of the year. Co-ownership is one answer the industry has been developing for that gap, and it has now reached the auction block.
DeCaro Auctions, a luxury real estate auction house founded in 1983, began offering co-ownership auctions in September 2026 and says it is the first auction company to sell co-ownership this way. The move matters because it gives the fractional-ownership model a public price-discovery mechanism at a time when affordability is squeezing the traditional second-home market.
Co-ownership, often called fractional ownership, is ownership of the property itself, not a timeshare. A home is typically divided into eight fractions, though some are offered in six or four. Depending on how the sale is structured, owners hold either a deeded fraction of the property or a fraction of a company, usually an LLC, formed to own it. No one owns the primary suite or a particular wing; every owner has use of the entire house during their stays.
The category has been gaining formal footing for several years. The Real Estate Standards Organization added co-ownership as a property subtype in its 2022 data dictionary, giving listing systems a standard way to classify it. After the sale, DeCaro coordinates professional management for the home. Calendars often rotate each year so holidays and peak seasons are divided fairly over time. Owners split the carrying costs, including maintenance, repairs, taxes, and insurance.
The most obvious draw is a lower entry point. On a Lake Minnetonka estate DeCaro is currently auctioning, bidding on each fraction, one-eighth of the home, opens at $1.55 million, against a whole-home value of about $15 million. In a co-ownership auction, the company publishes a starting bid for each fraction; buyers register, qualify, and lock in a place at that opening bid. If more bidders want in than there are fractions available, competition sets the final price. The full sequence is laid out on DeCaro’s process page.
Whole-home buyers remain part of the opportunity. While DeCaro conducts the fractional auction, buyers interested in acquiring the entire property may submit a whole-home offer at any time, allowing the seller to evaluate both paths. To exit later, an owner sells their fraction under the terms of the operating agreement, and DeCaro recommends putting it back up for auction.
Co-ownership is not for everyone. Owners give up full control of the calendar, agree to rules set by the operating agreement, and rely on the other owners and the management company to keep the arrangement running smoothly. Buyers should read the agreement closely before bidding, particularly the terms on scheduling, cost-sharing, and resale. For the broader market, the auction format could test whether fractional pricing can attract buyers who have been priced out of full second homes, and whether sellers of inherited or underused properties gain a new exit route.
