At The Cash: Shopping for a Trip Residence with Jonathan Miller (June 18, 2025)
Shopping for a second house in in the present day’s local weather will be difficult: Rates of interest are close to the very best stage in 20 years, and housing stock is close to document 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 seashore, lake or mountain house in the present day.
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 Finest Approach to Purchase a Home Proper Now (November 15, 2023)
At The Cash: The Finest 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 plenty of our listeners have additionally.
Let’s herald Jonathan Miller, a CEO, and founding father of Miller. Samuel, a extremely rated. Knowledge 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 taking place in that market.
So Jonathan, let’s simply speak a bit bit about what’s occurring within the second house 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 most likely had the largest second house buy growth in historical past as individuals 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 a giant drop off in second house, purchases.
Now, I might describe it as nor extra normalized, the place it’s extra in keeping with seven or eight years in the past earlier than the pandemic. Um, and comparisons towards. The previous couple of years are most likely unfair to the market.
Barry Ritholtz: What’s occurring then with the provision of houses on the market? Clearly 20 21, 22, plenty of provide received sucked up as a proportion of common house 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. However it relies on the place the uptick started. , did it grow to be, start at a document low quantity? And now it’s, , we’ve some markets, plenty of markets which might be nonetheless behind, pre pandemic stock ranges, however we’ve a rising variety of markets which might be form of catching up or exceeding. However it is vitally location particular.
Let me guess, let me take a number of 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 exhibits.
It exhibits precisely that. One other approach to actually have a look at this simplistically is I consider Sunbelt versus everyone else.
Sunbelt new product will 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 a giant distinction even inside South Florida. You have a look at Miami-Dade is absolutely seeing, um, plenty 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 Seaside County.
Palm Seaside County is seeing declining stock. I don’t assume 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 Seaside 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 plenty of 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. Truthful assertion?
Jonathan Miller: That’s a particularly reasonable assertion. After which throwing hurricanes on the Gulf facet. Has seen a a lot quicker rise. Provide than the ocean facet of Florida. I’m wondering too if that’s a part of, , Canadians are inclined to gravitate in the direction of the Gulf facet and , with the commerce battle that we’re having proper now, perhaps that’s enjoying into it as nicely.
Barry Ritholtz: We have been wanting of all instances January, 2020 on the Gulf facet in locations like St. Petersburg for a winter house, after which the pandemic shut every little thing. And when every little thing reopened. I wasn’t as shocked in regards to the large improve in house 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 yr on every little thing round the home, not truly shopping for the home, hey, that pays for lots of good holidays. Possibly I don’t have to personal a spot in Florida. I may 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 house possession prices?
Jonathan Miller: Proper. So, , within the outdated days once you purchased a home and also you have been fearful in regards to the rate of interest and the value of the home the prices of house possession past that have been form of a rounding error. You weren’t eager 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 bounce in not simply the price, however truly getting protection in insurance coverage.
Once we take into consideration different components of the nation which might be 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).
Really, 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 house costs is the Midwest. It’s not Florida.
It’s not wildfires in California, as a result of housing is a lot cheaper within the Midwest, however the insurance coverage, as a proportion, it’s an even bigger chunk. It’s an even bigger, larger legal responsibility or expense.
Barry Ritholtz: So we have been simply in Chicago per week or two in the past and what was so fascinating, so I’m in Chicago yearly for Thanksgiving, for perpetually.
I all the time discover the Midwest and Chicago particularly. A smaller, extra manageable, extra rational, rather 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 speak about on the East Coast with seashore property, Hamptons, Fireplace Islands, Jersey Shore, Delaware, go down the entire listing.
All of them speak about, some individuals have houses on Lake Michigan, or for those who’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 dwelling within the east after which go to the Midwest and and have a look at housing costs and it’s nearly leisure as a result of the affordability, um, , to purchase a trip house 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 entire, we had a giant occasion in Chicago. He’s like, oh my God, I can’t consider how affordable every little thing is right here. I’m like, you and your fiance ought to transfer there. The one catch is we’ve to chop your wage 40% ’trigger that’s the native wages.
Clearly house costs monitor native median revenue. I don’t bear in mind if it was your analysis word. 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 house worth within the nation, however an excellent greater median revenue on common. And so it seems that paying a excessive worth for houses in New Jersey is definitely cheaper than an affordable house 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 houses, and seashore homes?
Jonathan Miller: In peril of claiming it relies upon, nevertheless it relies upon. I take into consideration a market that, that I lived in and canopy, a market like Manhattan, which is thought for plenty of Piet De Terres , locations within the metropolis that individuals within the suburbs by houses there. Um, for those who have 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 world and in addition affluence that gravitates there. So the media revenue doesn’t actually relate. It’s, , it’s like, , 70,000. , , and the median house worth 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, international patrons, let’s speak about what’s occurring, with the general public coverage and particularly, the greenback. We’ve seen the greenback fall, fall off from its highs just lately, you talked about this in a current analysis word.
What does the energy of the greenback imply for potential patrons of actual property from abroad? What has, let’s simply name the injury 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, , for those who have been coming from Europe, you have been, you have been having fun with a 50% low cost off the forex play for a US house.
And so New York, had an amazing, would have an amazing surge each time the greenback received weaker. We had durations. I wanna say 2006, 2007, the place I known 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 in regards to 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: A giant driver is entry to, to prime quality universities. And so the Asian demand, that’s one of many facilities they’re actually searching for over the long term.
The issue with the weaker forex 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 primarily, a minimum of 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, this kind of greenback surroundings.
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 largely money offers I’ve realized from studying, your analysis notes. However what about, , youthful people of their, not of their twenties and thirties, however maybe of their late thirties and forties who desire a trip property.
They’re not spending tens of thousands and thousands of {dollars}. They’re spending one thing a bit 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 consider charges is that they’re form of caught just under 7% on a hard and fast fee.
Once you’re a second house 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 house mortgage than a. Main house, main residence.
Jonathan Miller: Sure. And the underwriting is a bit more durable as nicely. There’s ratios which might be a bit bit tighter. That’s the way in which to consider it.
Nonetheless, , . In the event you’re searching for like a break in pricing, , pricing now with the uncertainty and the charges being caught in an elevated stage, the speed of worth progress is beginning, , has been actually over the previous few 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 might be rising, however these are typically main housing markets. Like for those who’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 speak demographics a bit bit. What about millennials and Gen Z.
Keep 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 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 people have a look at a trip property?
Jonathan Miller: You’re proper, it, it, we’re completely seeing the millennials first. push into house possession. Not simply house possession, however, second house proprietor possession.
If you consider this at a high, form of, at a high stage, one of many issues that’s been altering with, um, the child boomer technology 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 reward when you’re alive.
Jonathan Miller: To bask within the glow. Sure. Proper? Sure. Sure. And, that’s a factor. The fast commentary is, within the eighties after I began up my firm, it was quite common in Manhattan for folks to purchase like a studio condo, form of the dimensions of a resort room, for his or her children that have been going to varsity within the in, and it, and it might grow to be a pied de terre for the household down the street.
Now they’re shopping for three, 4, $5 million residences and versus little effectivity kind locations, we’re seeing a a lot larger 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 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. , it’s an fascinating storyline, however I’m not seeing that, it’s taking place on the margin greater than the rest.
What’s actually fascinating on this planet of Airbnb; And investor possession. Lenders ask for a better fee for that, proper? A better mortgage fee for those who’re financing. To my understanding, you’ll be able to so long as you on a second house, so long as you management the home – that means you don’t have tenants in it for greater than six months – you’ll be able to 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, for those who’re utilizing an expert supervisor to handle it for you, then it’s thought of an investor property.
We’ve had within the Southwestern US. , there’s an enormous 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 available on the market when individuals 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 thought on the identical time. There’s definitely a spot for it however I feel it’s been a bit 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 just don’t get to make use of the property. Proper, proper. , and, and that’s been one of many promoting factors of Airbnb as a, , as a landlord.
Then the opposite factor is that usually, , once you have a look at their information, they generate about two and a half instances the hire per sq. foot of a one yr lease and a few even generate extra like “One High-quality Keep” as a form of luxurious Airbnb and it’s like 3 times. Um, shorter time period leases are costlier than long term leases. Sure.
Barry Ritholtz: I feel everyone is aware of what are the tremendous scorching locations. I do know the tremendous scorching trip house locations, however I do know you crunch plenty of information. What do you see as form of up and coming, what do you see as scorching which might be 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 have 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, a minimum of within the Northeast there was a from the pandemic by way of now, there was an amazing growth in, New Hampshire housing due to the second house phenomenon.
What’s actually fascinating 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 might be shopping for second houses actually wanna be cognizant of their employers, , future insurance policies on how usually you must be within the workplace.
Barry Ritholtz: I do know I may take a cannonball from West Hampton into Manhattan, and it’s marginally longer than my regular commute into the town. However it raises an fascinating 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 houses and the place they’re situated?
Jonathan Miller: There was a phrase that someone 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 shifting to a second house market as a result of they might work remotely.
I known as it co-primary.
Mainly it was a co-primary residence. What I discovered, individuals coming outta a pandemic have been searching for high quality of faculties, if they’d a younger household, actually, , they have been issues that you just usually don’t think about web, high quality issues that you just usually don’t think about once you’re shopping for a second house.
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 will to cut back commuting or, who doesn’t wish to perhaps work of their pajamas,
Barry Ritholtz: So how would you suggest, given the entire apps, the entire information, the entire issues which might be on the market, somebody purchasing for a trip property, how ought to they be utilizing an app like let’s say, Zillow or Redfin, with a purpose 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 a number of info. This sounds old-fashioned, however after getting that info, , you’ve gotten. , you’ve checked out a, , on-line a dozen properties that form of, , make sense to you.
You really want to see an agent. You want to speak to a human being. You, , and somebody that’s an area knowledgeable in a market, which is an entire factor. Um, which you’ll by way of these apps, work out, , does their title pop up all over? Um. And have them, speak you thru it.
If there’s a second in your life that you just want handholding, regardless that you assume every little thing, I feel it’s house 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 data and, uh, you’ll be able to’t get that on-line.
Barry Ritholtz: So, last query in two components. What kind of recommendation would you give someone 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 people?
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, for those who’re going that route.
Take into consideration the fairness that you’ve in your current main residence, in case you have one. Proper now we’re mainly document or close to document house fairness due to the the value progress that we’ve seen during the last 5, seven years. Um, and perhaps that’s a financing automobile or an acquisition automobile on your, your buy.
Barry Ritholtz: Actually down cost you can borrow from your own home, regardless that it must 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 individuals use that to purchase a smaller house, a second house.
Barry Ritholtz: And, , we, as we’ve seen prior to now. Leveraging up your main residence to purchase a luxurious property, how may that ever go flawed?
Jonathan Miller: The, the form of saving grace to that not like in the course of the monetary disaster is that credit score situations 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. , 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 you purchased 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 annoyed by individuals making all money provides for over the asking worth. And I’m like, I can’t consider we misplaced one other home. I believed we have been in.
So somebody involves you and says. I’m doing fairly nicely. I received a pleasant bonus this yr. We’d like to get a trip property and we’re wanting over $2 million. We’re not gonna go loopy, however we’ve a good finances. What recommendation do you give someone like that?
Jonathan Miller: The very first thing is, , for those who’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 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, , outdoors of the town. Town isn’t seeing that metropolis is a a lot decrease quantity, however that’s form of the truth. However then, , for those who go to different markets, like we have been speaking in regards to the Sunbelt, , that’s nearly non-existent.
I simply nonetheless assume that the sellers are embedded with form of a bravado that was constructed up in the course of the pandemic. And I additionally assume that patrons are, um, form of have a bravado that they’re gonna get essentially the most wonderful 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 rapidly, 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 a minimum of 50 instances, 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 relentless versus this new factor. It’s form of it’s a actuality. And for those who’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 individuals looking for 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 bear in mind 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 occurring, get knowledgeable and work with an area knowledgeable to assist discover your dream trip property.
I’m Barry Ritholtz. You’re listening to Bloomberg’s on the Cash.
