At The Money: Buying a Vacation Home with Jonathan Miller (June 18, 2025)
Shopping for a second dwelling in at the moment’s local weather might be difficult: Rates of interest are close to the best degree in 20 years, and housing stock is close to report lows. So what’s a possible trip property purchaser to do? Jonathan Miller, President of Miller Samuel, discusses the most effective approaches for buying that seaside, lake or mountain dwelling at the moment.
Full transcript below.
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About our Visitor:
Jonathan Miller is founder and President of Miller Samuel. His weekly Housing Notes is learn extensively all through the Actual Property business. For more information, see:
Beforehand:
At the Money: The Best Way to Buy a House Right Now (November 15, 2023)
At The Money: The Best Way to Sell Your House (December 27, 2023)
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Transcript:
Barry Ritholtz: Have you considered proudly owning or shopping for a trip property? Would you want a spot to take the household to on a lake close to the seaside or up within the mountains? I’ve, and I do know numerous our listeners have additionally.
Let’s usher in Jonathan Miller, a CEO, and founding father of Miller. Samuel, a extremely rated. Knowledge analytics and analysis agency protecting the housing market. He has written quite a lot of items on trip properties, second property, luxurious properties, and what’s taking place in that market.
So Jonathan, let’s simply speak a bit bit about what’s occurring within the second dwelling market, whether or not it’s the posh market or not. Inform us a bit bit about what’s occurring on the market.
Jonathan Miller: We had, coming outta the pandemic, we in all probability had the largest second dwelling buy growth in historical past as folks have been coming, , form of reengaging with the outside once more, after the pandemic, after which within the final couple of years, we’ve truly seen an enormous drop off in second dwelling, purchases.
Now, I might describe it as nor extra normalized, the place it’s extra in step with seven or eight years in the past earlier than the pandemic. Um, and comparisons towards. The previous couple of years are in all probability unfair to the market.
Barry Ritholtz: What’s occurring then with the provision of properties on the market? Clearly 20 21, 22, numerous provide received sucked up as a share of common dwelling numbers on the market. That quantity appears to have plummeted. Has that normalized but?
Jonathan Miller: It is determined by location. The best way I consider it’s, we’re seeing an enormous uptick in provide. However it is determined by the place the uptick started. You realize, did it turn out to be, start at a report low quantity? And now it’s, , we now have some markets, numerous markets which are nonetheless behind, pre pandemic stock ranges, however we now have a rising variety of markets which are form of catching up or exceeding. However it is rather location particular.
Let me guess, let me take a couple of guesses. I, I’m gonna guess that we’re seeing an enormous uptick in provide in, in southern Florida. Sure. And never as a lot provide in, let’s say. The Hamptons or Jersey Shore off of New York or Newport or any of the holiday locations off of Boston. That’s simply my intuition. I’m curious what your knowledge reveals.
It reveals precisely that. One other option to actually take a look at this simplistically is I consider Sunbelt versus everyone else.
Sunbelt new product might be constructed quicker. We , the entire shifting away, one thing cheaper housing market, which tends to be within the south was form of overdone.
And now there’s an enormous distinction even inside South Florida. You take a look at Miami-Dade is de facto seeing, um, numerous provide are available, important about 50% over the past 12 months. Wow. Up and um, however then two counties to the north go Broward after which go Palm Seashore County.
Palm Seashore County is seeing declining stock. I don’t suppose there’s a correlation with the additional south you go, the extra stock is rising, however, that appears to be the, what’s truly taking place in Florida.
Barry Ritholtz: Palm Seashore type of jogs my memory of East Hampton or Sag Harbor, one thing like that. So it’s extra, , east finish of Lengthy Island. Is it truthful to say that numerous components of locations like South Florida simply grew to become victims of their very own success? There was such an exodus from California to Texas, from New York, New Jersey, Connecticut to Florida. It simply appeared to overwhelm the infrastructure and the provision. Honest assertion?
Jonathan Miller: That’s a very reasonable assertion. After which throwing hurricanes on the Gulf aspect. Has seen a a lot quicker rise. Provide than the ocean aspect of Florida. I’m wondering too if that’s a part of, , Canadians are inclined to gravitate in direction of the Gulf aspect and , with the commerce struggle that we’re having proper now, possibly that’s taking part in into it as properly.
Barry Ritholtz: We have been trying of all instances January, 2020 on the Gulf aspect in locations like St. Petersburg for a winter dwelling, after which the pandemic shut the whole lot. And when the whole lot reopened. I wasn’t as stunned concerning the large improve in dwelling costs as I used to be the enormous improve in issues like insurance coverage, taxes, HOA charges, it received to the purpose: Wait if, if I’m gonna spend 60 or 80 or a 100 thousand {dollars} a 12 months on the whole lot round the home, not truly shopping for the home, hey, that pays for lots of good holidays. Perhaps I don’t must personal a spot in Florida. I might simply go to?
How important is the price construction change in Southern Florida to what’s occurring there and the place else are we seeing that form of spike in dwelling possession prices?
Jonathan Miller: Proper. So, , within the outdated days once you purchased a home and also you have been anxious concerning the rate of interest and the value of the home the prices of dwelling possession past that have been form of a rounding error. You weren’t serious about the price of insurance coverage, actual property taxes. What we’ve been seeing, uh, within the final a number of years is an enormous soar in not simply the price, however truly getting protection in insurance coverage.
After we take into consideration different components of the nation which are form of struggling, uh, I might, I might characterize this has extra of a nationwide situation now. California is wildfires, the, the Midwest is tornadoes, the southeast, and jap seaboard is, and inland too is flooding.
There simply appears to be this form of rising tide (no pun meant).
Truly, the one factor that in all my analysis about this over the past couple of years, the most costly, uh, uh, ca or insurance coverage value, uh, relative to dwelling costs is the Midwest. It’s not Florida.
It’s not wildfires in California, as a result of housing is a lot inexpensive within the Midwest, however the insurance coverage, as a share, it’s a much bigger chunk. It’s a much bigger, greater legal responsibility or expense.
Barry Ritholtz: So we have been simply in Chicago every week or two in the past and what was so attention-grabbing, so I’m in Chicago yearly for Thanksgiving, for perpetually.
I all the time discover the Midwest and Chicago specifically. A smaller, extra manageable, extra rational, far more inexpensive model of New York Metropolis, however lots of people we spoke to there in Chicago, in Detroit, in Milwaukee, there are all of the Nice Lakes, like what we discuss on the East Coast with seaside property, Hamptons, Fireplace Islands, Jersey Shore, Delaware, go down the entire listing.
All of them discuss, some folks have properties on Lake Michigan, or when you’re coming from Grand Lake Streams, you there, there’s only a run of trip properties and the costs appear nearly affordable. What are you seeing within the Midwest marketplace for actual property costs?
Jonathan Miller: It’s all the time actually harmful to form of make a residing within the east after which go to the Midwest and and take a look at housing costs and it’s nearly leisure as a result of the affordability, um, , to purchase a trip dwelling in say, Wisconsin, north of Chicago, the place I used to stay, an inexpensive, however to not locals.
Barry Ritholtz: My head dealer within the workplace after this entire, we had an enormous occasion in Chicago. He’s like, oh my God, I can’t imagine how affordable the whole lot is right here. I’m like, you and your fiance ought to transfer there. The one catch is we now have to chop your wage 40% ’trigger that’s the native wages.
Clearly dwelling costs observe native median revenue. I don’t keep in mind if it was your analysis be aware. That talked about, (or possibly it was Paul Krugman’s) talked about all New Jersey as one of many densest populations within the nation with one of many highest dwelling worth within the nation, however an excellent larger median revenue on common. And so it seems that paying a excessive worth for properties in New Jersey is definitely cheaper than a cheap dwelling in one other a part of the nation relative to your revenue.
So that actually begs the query, how important is native revenue to trip properties, lakefront properties, and seaside homes?
Jonathan Miller: In peril of claiming it relies upon, but it surely relies upon. I take into consideration a market that, that I lived in and canopy, a market like Manhattan, which is understood for plenty of Piet De Terres , locations within the metropolis that folks within the suburbs by properties there. Um, when you take a look at the median revenue in Manhattan, it has no bearing on the value of housing as a result of there’s such a global and in addition affluence that gravitates there. So the media revenue doesn’t actually relate. It’s, , it’s like, , 70,000. You realize, , and the median dwelling worth in Manhattan is about ~1,000,000, proper?
Barry Ritholtz: Which will get you a studio. (possibly a small one bed room in a walkup).
Because you’re mentioning, um, overseas patrons, let’s discuss what’s occurring, with the general public coverage and specifically, the greenback. We’ve seen the greenback fall, fall off from its highs lately, you talked about this in a latest analysis be aware.
What does the energy of the greenback imply for potential patrons of actual property from abroad? What has, let’s simply name the harm to America the model, the Black Eye that we form of see Uncle Sam having. What does that imply for out of doors purchasers?
Jonathan Miller: Not less than at this level, it’s an offset in, in different phrases, that we’ve had durations of time the place, , when you have been coming from Europe, you have been, you have been having fun with a 50% low cost off the foreign money play for a US dwelling.
And so New York, had an incredible, would have an incredible surge each time the greenback received weaker. We had durations. I wanna say 2006, 2007, the place I referred to as it the “Irish Carpenter Syndrome,” the place you had form of, , folks of modest means in Eire getting 50% reductions on million-dollar condos in Midtown.
Barry Ritholtz: What concerning the different coast? What about Japan, China, Korea, it’s Asia shopping for San Francisco, LA Jolla, San Diego, and even throughout the border of Vancouver.
Jonathan Miller: An enormous driver is entry to, to prime quality universities. And so the Asian demand, that’s one of many facilities they’re actually on the lookout for over the long term.
The issue with the weaker foreign money or the weaker greenback, is that the. The state of immigration and the form of what I name the tariff tantrums and the uncertainty that’s abound in the intervening time, um, has basically, not less than in my anecdotal statement at this second is, , it, it’s offsetting the advantage of a, of a reduction that we’re not seeing the inflow of worldwide demand that we usually would anticipate throughout this, um, one of these greenback setting.
Barry Ritholtz: Because you talked about the tariff tantrum, that appears to be maintaining mortgage charges elevated. Does it actually matter to luxurious properties three, 4, $5 million? These are principally money offers I’ve realized from studying, your analysis notes. However what about, , youthful of us of their, not of their twenties and thirties, however maybe of their late thirties and forties who need a trip property.
They’re not spending tens of hundreds of thousands of {dollars}. They’re spending one thing a bit extra affordable, however they’re in all probability placing 10, 20, 30% down. And placing a mortgage on it. What are these elevated mortgage charges doing to that market?
Jonathan Miller: Iit’s restraining it. The best way to think about charges is that they’re form of caught slightly below 7% on a set fee.
Whenever you’re taking a look at a second dwelling buy, you in all probability wanna add a half to a few quarters of a % to the speed of a major residence.
Barry Ritholtz: It’s, so, it’s extra for a second dwelling mortgage than a. Main dwelling, major residence.
Jonathan Miller: Sure. And the underwriting is a bit more durable as properly. There’s ratios which are a bit bit tighter. That’s the best way to think about it.
Nonetheless, , . If you happen to’re on the lookout for like a break in pricing, , pricing now with the uncertainty and the charges being caught in an elevated degree, the speed of worth development is beginning, , has been actually over the previous couple of months beginning to ratchet down a bit.
Barry Ritholtz: So it’s plateauing?
Jonathan Miller: I might say plateauing might be a good time period. Um, in some markets even slipping a bit. We nonetheless have markets which are rising, however these are usually major housing markets. Like when you’re in New York Metropolis, Metro Lengthy Island, grew 10% final 12 months. (Loopy. Completely loopy). Huge numbers.
Barry Ritholtz: Since we talked about the non-luxury second properties, let’s speak demographics a bit bit. What about millennials and Gen Z.
Bear in mind in the course of the 2010s they stared clear from the preliminary housing market? They have been forming households at a really low fee alongside the identical time as builders had type of pivoted post-crisis to multifamily and away from single household properties.
Not solely are these generations now shopping for first properties. A few of them, I, I hesitate to say a lot of them, however a few of them are taking a look at second properties. How do you concentrate on demographics and the place these of us take a look at a trip property?
Jonathan Miller: You’re proper, it, it, we’re completely seeing the millennials first. push into dwelling possession. Not simply dwelling possession, however, second dwelling proprietor possession.
If you concentrate on this at a high, form of, at a high degree, one of many issues that’s been altering with, um, the newborn boomer technology is shopping for properties or giving what the youngsters would wait till their dad and mom handed.
Barry Ritholtz: inter vivos is the technical time period. You’re making the reward when you’re alive.
Jonathan Miller: To bask within the glow. Sure. Proper? Sure. Sure. And, that’s a factor. The short statement is, within the eighties once I began up my firm, it was quite common in Manhattan for fogeys to purchase like a studio house, form of the dimensions of a resort room, for his or her children that have been going to school within the in, and it, and it might turn out to be a pied de terre for the household down the highway.
Now they’re shopping for three, 4, $5 million residences and versus little effectivity kind locations, we’re seeing a a lot greater price ticket on this. As , and, and I, and that’s giving these, this technology form of a, a jumpstart.
Barry Ritholtz: So that you’re type of implying, I don’t wanna say fractional possession or co-ownership, it’s a number of generations of a household utilizing the identical second property. However what about these form of issues? We’ve seen enterprise fashions of fractional possession, or I’ve heard tales of shut pals, two or three households co-owning a property. Is that this an actual pattern or is that this nonetheless a rounding error?
Jonathan Miller: It, to me, it’s extra of a rounding error. You realize, it’s an attention-grabbing storyline, however I’m not seeing that, it’s taking place on the margin greater than anything.
What’s actually attention-grabbing on this planet of Airbnb; And investor possession. Lenders ask for a better fee for that, proper? The next mortgage fee when you’re financing. To my understanding, you may so long as you on a second dwelling, so long as you management the home – which means you don’t have tenants in it for greater than six months – you may declare it as a second residence.
Barry Ritholtz: What does that do for you tax-wise, if it’s a second residence? Nicely, versus a enterprise.
Jonathan Miller: I don’t know. , each scenario is so completely different, however I do know that with Airbnbs, when you’re utilizing knowledgeable supervisor to handle it for you, then it’s thought of an investor property.
We’ve had within the Southwestern US. You realize, there’s an enormous oversupply of Airbnb properties that aren’t form of protecting the month-to-month prices. So I’m not essentially encouraging that
Barry Ritholtz: There’s gonna be some provide coming in the marketplace when folks say, Hey, this simply isn’t well worth the headache. Is that the implication?
Jonathan Miller: That “I’m not getting the returns that I that I believed I might get,” , as a result of everyone had the identical concept on the identical time. There’s definitely a spot for it however I believe it’s been a bit bit over overused.
The opposite factor is once we take into consideration Airbnb versus being an investor, a pure investor, in renting it out for, , for six months or a 12 months is that you just don’t get to make use of the property. Proper, proper. You realize, and, and that’s been one of many promoting factors of Airbnb as a, , as a landlord.
Then the opposite factor is that typically, , once you take a look at their knowledge, they generate about two and a half instances the hire per sq. foot of a one 12 months lease and a few even generate extra like “One Positive Keep” as a form of luxurious Airbnb and it’s like thrice. Um, shorter time period leases are costlier than long term leases. Sure.
Barry Ritholtz: I believe everyone is aware of what are the tremendous scorching locations. I do know the tremendous scorching trip dwelling locations, however I do know you crunch numerous knowledge. What do you see as form of up and coming, what do you see as scorching which are in all probability gonna shock most individuals who take note of actual property?
Jonathan Miller: I believe if New Hampshire and Vermont actually, which isn’t actually. (Extra a ski location than seaside place). That’s in all probability my built-in bias for going north.
When the youngsters have been younger for each trip and never south. I, there simply appears to be a, particularly, in all probability extra New Hampshire than Vermont, an incredible, not less than within the Northeast there was a from the pandemic by means of now, there was an incredible growth in, New Hampshire housing due to the second dwelling phenomenon.
What’s actually attention-grabbing one thing that I. Hadn’t paid a lot consideration to till the final couple of years is with the entire push for RTO, , return to workplace. Um, some folks which are shopping for second properties actually wanna be cognizant of their employers, , future insurance policies on how typically you must be within the workplace.
Barry Ritholtz: I do know I might take a cannonball from West Hampton into Manhattan, and it’s marginally longer than my regular commute into town. However it raises an attention-grabbing query. How has the rise of the distant work (work at home) and the return to workplace RTO), how is that impacting purchaser preferences for trip properties and the place they’re positioned?
Jonathan Miller: There was a phrase that anyone I used to be giving a presentation, proper after the form of darkish days of the pandemic. And I keep in mind an actual property agent, I used to be making an attempt to explain that, , folks shifting to a second dwelling market as a result of they may work remotely.
I referred to as it co-primary.
Principally it was a co-primary residence. What I discovered, folks coming outta a pandemic have been on the lookout for high quality of colleges, if that they had a younger household, actually, , they have been taking a look at issues that you just usually don’t contemplate web, high quality issues that you just usually don’t contemplate once you’re shopping for a second dwelling.
The vacation can be about second house is to get away from all of it, however that’s been form of co-opted by the necessity to work or the need to scale back commuting or, who doesn’t prefer to possibly work of their pajamas,
Barry Ritholtz: So how would you suggest, given all the apps, all the knowledge, all the issues which are on the market, somebody looking for a trip property, how ought to they be utilizing an app like let’s say, Zillow or Redfin, with the intention to assist them discover a trip property they actually wanna personal?
Jonathan Miller: The apps make all of it accessible footage. You possibly can see numerous info. This sounds old-fashioned, however upon getting that info, , you have got. You realize, you’ve checked out a, , on-line a dozen properties that form of, , make sense to you.
You really want to see an agent. It is advisable speak to a human being. You, , and somebody that’s an area professional in a market, which is a complete factor. Um, which you’ll by means of these apps, determine, , does their identify pop up everywhere? Um. And have them, speak you thru it.
If there’s a second in your life that you just want handholding, despite the fact that you suppose the whole lot, I believe it’s dwelling shopping for. You do, and all of the form of tales of they’re simply making an attempt to promote you a home. Um, however they’re additionally. They’re additionally, um, a wealth of knowledge and, uh, you may’t get that on-line.
Barry Ritholtz: So, closing query in two components. What kind of recommendation would you give anyone who asks, Hey, I’m seeking to purchase a luxurious property in a scorching space, and what recommendation would you give to. A millennial, somebody of their late thirties or forties, Hey, we’d like to have some affordable trip property. What, what do you inform these of us?
Jonathan Miller: The primary is extremely apparent. There may be a lot info at your fingertips by way of understanding the price, the extra mortgage expense, when you’re going that route.
Take into consideration the fairness that you’ve in your current major residence, in case you have one. Proper now we’re mainly taking a look at report or close to report dwelling fairness due to the the value development that we’ve seen over the past 5, seven years. Um, and possibly that’s a financing automobile or an acquisition automobile on your, your buy.
Barry Ritholtz: Actually down cost you might borrow from your property, despite the fact that it should be disclosed to the financial institution.
Jonathan Miller: Sure, sure. I, , and, um, , banks, uh, , pay attention, in case you have a, a boatload of fairness in your house, um, , it’s, , I, I see this fairly a bit the place folks use that to purchase a smaller dwelling, a second dwelling.
Barry Ritholtz: And, , we, as we’ve seen up to now. Leveraging up your major residence to purchase a luxurious property, how might that ever go fallacious?
Jonathan Miller: The, the form of saving grace to that in contrast to in the course of the monetary disaster is that credit score circumstances stay tight. So lenders aren’t simply giving freely. Loans. If in case you have a pulse or fog and mirror like we had in the course of the monetary disaster.
It’s truly a factor. You realize, they’re, they’re truly doing their due diligence, um, and
Barry Ritholtz: they’re doing their jobs. Go determine. That’s a loopy idea.
Let me refocus you on the posh query ’trigger I do know to procure a property not too way back. I purchased a property not too way back, and I used to be, I realized out of your expertise, I used to be utterly pissed off by folks making all money provides for over the asking worth. And I’m like, I can’t imagine we misplaced one other home. I believed we have been in.
So somebody involves you and says. I’m doing fairly properly. I received a pleasant bonus this 12 months. We’d like to get a trip property and we’re trying over $2 million. We’re not gonna go loopy, however we now have an honest price range. What recommendation do you give anyone like that?
Jonathan Miller: The very first thing is, , when you’re in a housing market with. Restricted stock New York Metro, the share of bidding wars of transactions is within the 40-ish % fee, which means that 40% of the closings the customer paid over ask.
Barry Ritholtz: Wow. that’s a actuality. Nonetheless, nonetheless 2025 that’s occurring?
Jonathan Miller: Completely. It’s not what it was. Six months in the past. It was 50% greater than 50% within the New York metro space, , exterior of town. The town isn’t seeing that metropolis is a a lot decrease quantity, however that’s form of the fact. However then, , when you go to different markets, like we have been speaking concerning the Sunbelt, , that’s nearly non-existent.
I simply nonetheless suppose that the sellers are embedded with form of a bravado that was constructed up in the course of the pandemic. And I additionally suppose that patrons are, um, form of have a bravado that they’re gonna get essentially the most superb deal. And in order that the hole between them, is a lesson and it takes the events some time to form of meet midway. Each should form of capitulate to the precise market circumstances.
And a part of what’s occurred, issues have occurred so shortly, simply with the tariffs and the confusion. I’ve this form of cockamamie principle that got here up out of, , the, , once we take into consideration Tariff coverage having flip-flopped not less than 50 instances, There’s this uncertainty that we’re form of all residing with, and in some ways in which form of chaos or uncertainty because it pertains to housing turns into a relentless versus this new factor. It’s form of it’s a actuality. And when you’re within the housing market, you must be form of conscious that there’s a chaos to it nonetheless and don’t be afraid of it.
Barry Ritholtz: So to wrap up for these folks trying to find a trip property, a lake home, a seaside home, a mountain home, we’ve seen some uptick within the quantity of provide and maybe in some areas costs have stopped going up. Not less than not going up as aggressively as, as they’ve been.
However remember it’s very regional, it’s very geographic particular. There’s a demand for extra of those properties, particularly from millennials. And shortly Gen Z. Hold your eye on what’s occurring, get knowledgeable and work with an area professional to assist discover your dream trip property.
I’m Barry Ritholtz. You’re listening to Bloomberg’s on the Cash.
