At The Cash: Shopping for a Trip Residence with Jonathan Miller (June 18, 2025)
Shopping for a second dwelling in right this moment’s local weather will be difficult: Rates of interest are close to the very best degree in 20 years, and housing stock is close to file lows. So what’s a possible trip property purchaser to do? Jonathan Miller, President of Miller Samuel, discusses the very best approaches for buying that seashore, lake or mountain dwelling right this moment.
Full transcript beneath.
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About our Visitor:
Jonathan Miller is founder and President of Miller Samuel. His weekly Housing Notes is learn broadly all through the Actual Property trade. For more information, see:
Beforehand:
On the Cash: The Greatest Approach to Purchase a Home Proper Now (November 15, 2023)
At The Cash: The Greatest Approach to Promote Your Home (December 27, 2023)
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Discover the entire earlier On the Cash episodes within the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg.
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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 seashore or up within the mountains? I’ve, and I do know loads of our listeners have additionally.
Let’s herald Jonathan Miller, a CEO, and founding father of Miller. Samuel, a extremely rated. Information analytics and analysis agency masking the housing market. He has written a variety of items on trip houses, second property, luxurious properties, and what’s occurring in that market.
So Jonathan, let’s simply discuss slightly bit about what’s happening within the second dwelling market, whether or not it’s the luxurious market or not. Inform us slightly bit about what’s happening on the market.
Jonathan Miller: We had, coming outta the pandemic, we most likely had the most important second dwelling buy growth in historical past as individuals had 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 a giant drop off in second dwelling, purchases.
Now, I might describe it as nor extra normalized, the place it’s extra per seven or eight years in the past earlier than the pandemic. Um, and comparisons in opposition to. The previous couple of years are most likely unfair to the market.
Barry Ritholtz: What’s happening then with the availability of houses on the market? Clearly 20 21, 22, loads of provide obtained 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 relies on location. The way in which I consider it’s, we’re seeing a giant uptick in provide. Nevertheless it relies on the place the uptick started. You realize, did it change into, start at a file low quantity? And now it’s, , we now have some markets, loads of 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 just a few guesses. I, I’m gonna guess that we’re seeing a giant 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 information reveals.
It reveals precisely that. One other method to actually have a look at this simplistically is I consider Sunbelt versus all people else.
Sunbelt new product will be constructed quicker. We , the entire transferring away, one thing cheaper housing market, which tends to be within the south was form of overdone.
And now there’s a giant distinction even inside South Florida. You have a look at Miami-Dade is basically seeing, um, loads of provide are available in, important about 50% during the last yr. 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 occurring in Florida.
Barry Ritholtz: Palm Seashore sort 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 honest to say that loads of elements 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 availability. Truthful assertion?
Jonathan Miller: That’s a particularly 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 ponder too if that’s a part of, , Canadians are inclined to gravitate in the direction of the Gulf aspect and , with the commerce warfare that we’re having proper now, perhaps that’s enjoying into it as properly.
Barry Ritholtz: We had been trying of all occasions January, 2020 on the Gulf aspect in locations like St. Petersburg for a winter dwelling, after which the pandemic shut all the pieces. And when all the pieces reopened. I wasn’t as shocked concerning the huge improve in dwelling costs as I used to be the enormous improve in issues like insurance coverage, taxes, HOA charges, it obtained to the purpose: Wait if, if I’m gonna spend 60 or 80 or a 100 thousand {dollars} a yr on all the pieces round the home, not truly shopping for the home, hey, that pays for lots of good holidays. Possibly 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 happening there and the place else are we seeing that form of spike in dwelling possession prices?
Jonathan Miller: Proper. So, , within the previous days if you purchased a home and also you had been fearful concerning the rate of interest and the value of the home the prices of dwelling possession past that had 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 a giant soar in not simply the price, however truly getting protection in insurance coverage.
Once we take into consideration different elements 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 japanese 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 during the last couple of years, the most costly, uh, uh, ca or insurance coverage price, 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, larger legal responsibility or expense.
Barry Ritholtz: So we had 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 ceaselessly.
I all the time discover the Midwest and Chicago particularly. A smaller, extra manageable, extra rational, way 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 seashore property, Hamptons, Hearth Islands, Jersey Shore, Delaware, go down the entire checklist.
All of them discuss, some individuals have houses on Lake Michigan, or if you happen to’re coming from Grand Lake Streams, you there, there’s only a run of trip properties and the costs appear virtually 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 dwelling within the east after which go to the Midwest and and have a look at housing costs and it’s virtually leisure as a result of the affordability, um, , to purchase a trip dwelling in say, Wisconsin, north of Chicago, the place I used to reside, an inexpensive, however to not locals.
Barry Ritholtz: My head dealer within the workplace after this complete, we had a giant occasion in Chicago. He’s like, oh my God, I can’t consider how affordable all the pieces 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 monitor native median earnings. I don’t bear in mind if it was your analysis notice. That talked about, (or perhaps 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 value within the nation, however an excellent greater median earnings on common. And so it seems that paying a excessive value for houses in New Jersey is definitely cheaper than a reasonable dwelling in one other a part of the nation relative to your earnings.
So that basically begs the query, how important is native earnings to trip properties, lakefront houses, and seashore 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 many Piet De Terres , locations within the metropolis that individuals within the suburbs by houses there. Um, if you happen to have a look at the median earnings in Manhattan, it has no bearing on the value of housing as a result of there’s such a world and likewise affluence that gravitates there. So the media earnings doesn’t actually relate. It’s, , it’s like, , 70,000. You realize, , and the median dwelling value in Manhattan is about ~1,000,000, proper?
Barry Ritholtz: Which will get you a studio. (perhaps a small one bed room in a walkup).
Because you’re mentioning, um, overseas patrons, let’s discuss what’s happening, with the general public coverage and particularly, the greenback. We’ve seen the greenback fall, fall off from its highs not too long ago, you talked about this in a latest analysis notice.
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: A minimum of at this level, it’s an offset in, in different phrases, that we’ve had durations of time the place, , if you happen to had been coming from Europe, you had been, you had been having fun with a 50% low cost off the foreign money play for a US dwelling.
And so New York, had an amazing, would have an amazing surge each time the greenback obtained 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, , individuals 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 in search of 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 meanwhile, um, has primarily, at the least in my anecdotal commentary 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, any such greenback atmosphere.
Barry Ritholtz: Because you talked about the tariff tantrum, that appears to be retaining mortgage charges elevated. Does it actually matter to luxurious properties three, 4, $5 million? These are principally money offers I’ve discovered 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 thousands and thousands of {dollars}. They’re spending one thing slightly extra affordable, however they’re most likely 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 way in which to think about charges is that they’re form of caught just under 7% on a hard and fast fee.
If you’re a second dwelling buy, you most likely wanna add a half to a few quarters of a % to the speed of a main residence.
Barry Ritholtz: It’s, so, it’s extra for a second dwelling mortgage than a. Main dwelling, main residence.
Jonathan Miller: Sure. And the underwriting is slightly more durable as properly. There’s ratios which are slightly bit tighter. That’s the way in which to think about it.
Nevertheless, , . Should you’re in search of like a break in pricing, , pricing now with the uncertainty and the charges being caught in an elevated degree, the speed of value 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 main housing markets. Like if you happen to’re in New York Metropolis, Metro Lengthy Island, grew 10% final yr. (Loopy. Completely loopy). Massive numbers.
Barry Ritholtz: Since we talked about the non-luxury second houses, let’s discuss demographics slightly bit. What about millennials and Gen Z.
Bear in mind through the 2010s they stared clear from the preliminary housing market? They had been forming households at a really low fee alongside the identical time as builders had sort of pivoted post-crisis to multifamily and away from single household houses.
Not solely are these generations now shopping for first houses. A few of them, I, I hesitate to say lots of them, however a few of them are second houses. How do you consider demographics and the place these of us have 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 consider this at a prime, form of, at a prime degree, one of many issues that’s been altering with, um, the infant boomer era is shopping for houses or giving what the children would wait till their dad and mom handed.
Barry Ritholtz: inter vivos is the technical time period. You’re making the present when you’re alive.
Jonathan Miller: To bask within the glow. Sure. Proper? Sure. Sure. And, that’s a factor. The short commentary is, within the eighties once I began up my firm, it was quite common in Manhattan for fogeys to purchase like a studio residence, form of the dimensions of a resort room, for his or her children that had been going to varsity within the in, and it, and it will change into a pied de terre for the household down the highway.
Now they’re shopping for three, 4, $5 million flats and versus little effectivity sort locations, we’re seeing a a lot larger price ticket on this. As , and, and I, and that’s giving these, this era form of a, a jumpstart.
Barry Ritholtz: So that you’re sort 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 development 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 occurring 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 if you happen to’re financing. To my understanding, you possibly can so long as you on a second dwelling, so long as you management the home – that means you don’t have tenants in it for greater than six months – you possibly can declare it as a second residence.
Barry Ritholtz: What does that do for you tax-wise, if it’s a second residence? Effectively, versus a enterprise.
Jonathan Miller: I don’t know. , each state of affairs is so completely different, however I do know that with Airbnbs, if you happen to’re utilizing knowledgeable supervisor to handle it for you, then it’s thought-about an investor property.
We’ve had within the Southwestern US. You realize, there’s a large oversupply of Airbnb properties that aren’t form of masking 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 individuals say, Hey, this simply isn’t definitely worth the headache. Is that the implication?
Jonathan Miller: That “I’m not getting the returns that I that I assumed I might get,” , as a result of all people had the identical concept on the similar time. There’s definitely a spot for it however I feel it’s been slightly bit over overused.
The opposite factor is after we take into consideration Airbnb versus being an investor, a pure investor, in renting it out for, , for six months or a yr is that you simply 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, , if you have a look at their information, they generate about two and a half occasions the lease per sq. foot of a one yr lease and a few even generate extra like “One Nice Keep” as a form of luxurious Airbnb and it’s like thrice. Um, shorter time period leases are costlier than long run leases. Sure.
Barry Ritholtz: I feel all people is aware of what are the tremendous scorching locations. I do know the tremendous scorching trip dwelling locations, however I do know you crunch loads of information. What do you see as form of up and coming, what do you see as scorching which are most likely gonna shock most individuals who take note of actual property?
Jonathan Miller: I feel if New Hampshire and Vermont actually, which isn’t actually. (Extra a ski location than seashore place). That’s most likely my built-in bias for going north.
When the children had been younger for each trip and never south. I, there simply appears to be a, particularly, most likely extra New Hampshire than Vermont, an amazing, at the least within the Northeast there was a from the pandemic by means of now, there was an amazing 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 individuals which are shopping for second houses actually wanna be cognizant of their employers, , future insurance policies on how typically it’s important to 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. Nevertheless it raises an attention-grabbing query. How has the rise of the distant work (do business from home) and the return to workplace RTO), how is that impacting purchaser preferences for trip houses 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 bear in mind an actual property agent, I used to be attempting to explain that, , individuals transferring 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, individuals coming outta a pandemic had been in search of high quality of colleges, if that they had a younger household, actually, , they had been issues that you simply usually don’t contemplate web, high quality issues that you simply usually don’t contemplate if you’re shopping for a second dwelling.
The vacation could 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 wish to perhaps work of their pajamas,
Barry Ritholtz: So how would you advocate, given the entire apps, the entire information, the entire 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, so as to assist them discover a trip property they actually wanna personal?
Jonathan Miller: The apps make all of it accessible footage. You’ll be able to see numerous info. This sounds old-fashioned, however upon getting that info, , you might have. You realize, you’ve checked out a, , on-line a dozen properties that form of, , make sense to you.
You actually need to see an agent. It’s worthwhile to discuss to a human being. You, , and somebody that’s an area skilled in a market, which is a complete factor. Um, which you’ll by means of these apps, determine, , does their title pop up far and wide? Um. And have them, discuss you thru it.
If there’s a second in your life that you simply want handholding, although you suppose all the pieces, I feel it’s dwelling shopping for. You do, and all of the form of tales of they’re simply attempting to promote you a home. Um, however they’re additionally. They’re additionally, um, a wealth of knowledge and, uh, you possibly can’t get that on-line.
Barry Ritholtz: So, closing query in two elements. 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’s a lot info at your fingertips when it comes to understanding the price, the extra mortgage expense, if you happen to’re going that route.
Take into consideration the fairness that you’ve in your current main residence, when you’ve got one. Proper now we’re principally file or close to file dwelling fairness due to the the value development that we’ve seen during the last 5, seven years. Um, and perhaps that’s a financing car or an acquisition car in your, your buy.
Barry Ritholtz: Definitely down fee you could possibly borrow from your private home, although it should be disclosed to the financial institution.
Jonathan Miller: Sure, sure. I, , and, um, , banks, uh, , hear, when you’ve got a, a boatload of fairness in your house, um, , it’s, , I, I see this fairly a bit the place individuals use that to purchase a smaller dwelling, a second dwelling.
Barry Ritholtz: And, , we, as we’ve seen prior to now. Leveraging up your main residence to purchase a luxurious property, how might that ever go improper?
Jonathan Miller: The, the form of saving grace to that in contrast to through the monetary disaster is that credit score situations stay tight. So lenders aren’t simply making a gift of. Loans. In case you have a pulse or fog and mirror like we had through 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 luxurious query ’trigger I do know you purchased a property not too way back. I purchased a property not too way back, and I used to be, I discovered out of your expertise, I used to be utterly pissed off by individuals making all money provides for over the asking value. And I’m like, I can’t consider we misplaced one other home. I assumed we had been in.
So somebody involves you and says. I’m doing fairly properly. I obtained a pleasant bonus this yr. 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 funds. What recommendation do you give anyone like that?
Jonathan Miller: The very first thing is, , if you happen to’re in a housing market with. Restricted stock New York Metro, the share of bidding wars of transactions is within the 40-ish % fee, that means that 40% of the closings the client paid over ask.
Barry Ritholtz: Wow. that’s a actuality. Nonetheless, nonetheless 2025 that’s happening?
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, , outdoors of town. Town isn’t seeing that metropolis is a a lot decrease quantity, however that’s form of the truth. However then, , if you happen to go to different markets, like we had been speaking concerning the Sunbelt, , that’s virtually non-existent.
I simply nonetheless suppose that the sellers are embedded with form of a bravado that was constructed up through the pandemic. And I additionally suppose that patrons are, um, form of have a bravado that they’re gonna get probably 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 must form of capitulate to the precise market situations.
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, , after we take into consideration Tariff coverage having flip-flopped at the least 50 occasions, There’s this uncertainty that we’re form of all dwelling with, and in some ways in which form of chaos or uncertainty because it pertains to housing turns into a continuing versus this new factor. It’s form of it’s a actuality. And if you happen to’re within the housing market, it’s important to 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 individuals trying to find a trip property, a lake home, a seashore home, a mountain home, we’ve seen some uptick within the quantity of provide and maybe in some areas costs have stopped going up. A minimum of 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. Maintain your eye on what’s happening, get knowledgeable and work with an area skilled to assist discover your dream trip property.
I’m Barry Ritholtz. You’re listening to Bloomberg’s on the Cash.
