Second-home buying is recovering slowly, and a luxury auction house is betting that co-ownership can widen the pool of buyers who can participate. 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 timing reflects a market that remains constrained. 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, often called fractional ownership, is ownership of the property itself rather than a right to use it for a set period. 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. Every owner has use of the entire house during their stays.
"This is not a timeshare. It's co-ownership," says Mario Vargas, partner and CEO of DeCaro Auctions. "Everyone owns the whole home."
The category has been gaining formal footing. 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. Matthew Rollins, partner and chief marketing officer at DeCaro, notes that many high-net-worth buyers already hold real estate through LLCs, so the structure tends to feel familiar.
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, and the house is cleaned and prepared before each arrival and reset after each departure. Owners split carrying costs, including maintenance, repairs, taxes, and insurance. An operating agreement sets the rules, much like the covenants of a homeowners association, with typical terms including a minimum holding period of one year, a right of first refusal for other owners when someone sells, and a ban on renting out a fraction.
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. Vargas says even buyers who could afford the whole house may question carrying 100% of a property they use a few weeks a year. "It's a smarter way to own," he says.
The model can also help sellers. A family not ready to let go of a vacation home can sell part of it and keep part, and heirs who disagree about an inherited property have a way to divide along those lines.
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. Registration follows the same steps as any DeCaro auction, and the full sequence is laid out on DeCaro's process page. Whole-home buyers remain part of the opportunity, since buyers interested in acquiring the entire property may submit an offer at any time while the fractional auction proceeds.
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.
