Second-home buying is showing signs of recovery, but affordability remains a barrier for many households. 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. Yet second homes accounted for just 2.7% of all mortgage originations last year, underscoring how few can justify carrying a property used only part of the year. Co-ownership, also known as fractional ownership, is emerging as a solution, 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 claims to be the first auction company to sell co-ownership this way. The model allows buyers to purchase a fraction of a home—typically one-eighth, though some are offered in six or four fractions—with each owner holding a deeded fraction or a share in an LLC that owns the property. Unlike a timeshare, which sells use rights for a set period, co-ownership conveys actual ownership of the entire home. “This is not a timeshare. It’s co-ownership,” said Mario Vargas, partner and CEO of DeCaro Auctions. “Everyone owns the whole home.”
The appeal is clear: a lower entry point. On a Lake Minnetonka estate DeCaro is currently auctioning, bidding on each one-eighth fraction opens at $1.55 million, against a whole-home value of about $15 million. Vargas notes that even buyers who could afford the entire property may question carrying 100% of a home they use only a few weeks a year. “It’s a smarter way to own,” he said. The model also benefits sellers, such as families not ready to part with a vacation home or heirs who disagree about an inherited property. They can sell part and keep part, or divide along those lines.
However, co-ownership comes with trade-offs. Owners give up full control of the calendar, must adhere to an operating agreement that sets rules on scheduling, cost-sharing, and resale, and rely on other owners and a management company. DeCaro coordinates professional management, rotating calendars to fairly distribute peak seasons, and owners split carrying costs including maintenance, repairs, taxes, and insurance. Typical terms include a minimum holding period of one year, a right of first refusal for other owners, and a ban on renting out a fraction. Buyers should read the agreement closely before bidding.
The auction process differs from a standard auction. Instead of bidding opening and climbing, DeCaro publishes a starting bid for each fraction. Buyers register, qualify, and lock in a place at that opening bid. If demand exceeds available fractions, competition sets the final price. Registration follows the same steps as any DeCaro auction: review due diligence documents, agree to auction terms, and submit proof of funds. The full sequence is detailed on DeCaro’s process page. Whole-home buyers can still submit an offer at any time during the fractional auction, giving the seller multiple paths to evaluate.
For owners looking to exit later, DeCaro recommends putting the fraction back up for auction. “We can simply put that fraction back up for auction and let the market dictate what it’s worth,” said Matthew Rollins, partner and chief marketing officer. The category has gained formal footing; the Real Estate Standards Organization added co-ownership as a property subtype in its 2022 data dictionary. As second-home demand slowly returns, co-ownership auctions could offer a viable alternative for buyers who want a resort property but cannot justify owning all of it. The question is shifting from whether they can afford the house to whether co-ownership fits how they would actually use it.
