Podcast Summary: Masters in Business – "At The Money: Buying a Vacation Home with Jonathan Miller"
Episode Information:
- Title: At The Money: Buying a Vacation Home with Jonathan Miller
- Host: Barry Ritholtz, Bloomberg Radio
- Guest: Jonathan Miller, CEO and Founder of Miller Samuel
- Release Date: June 18, 2025
1. The Evolution of the Second Home Market Post-Pandemic
Key Discussion: Barry Ritholtz and Jonathan Miller delve into the dramatic shifts in the second home market triggered by the COVID-19 pandemic. They highlight the unprecedented surge in second home purchases during the pandemic as people sought refuge in the outdoors. However, this boom has since normalized, aligning more closely with pre-pandemic levels.
Notable Insights:
- Barry (02:24): "Coming out of the pandemic, we probably had the biggest second home purchase boom in history as people were re-engaging with the outdoors."
- Jonathan (03:02): Emphasizes the stark decline in second home purchases in recent years, indicating a return to more stable market conditions.
2. Supply Dynamics: Regional Variations in Housing Inventory
Key Discussion: The conversation shifts to the supply of homes available for sale, revealing significant regional disparities. While some markets have begun to see an increase in inventory, others remain below pre-pandemic levels.
Notable Insights:
- Barry (03:54): "We're seeing a big uptick in supply, but it depends on where the uptick began."
- Jonathan (04:17): Predicts a rise in supply in Southern Florida compared to traditional high-demand areas like the Hamptons or Jersey Shore.
3. Rising Costs of Homeownership: Beyond the Purchase Price
Key Discussion: Barry and Jonathan explore the escalating costs associated with owning a second home, including insurance, property taxes, and HOA fees. These additional expenses are impacting buyer decisions, making some reconsider the value of owning a vacation property.
Notable Insights:
- Jonathan (06:22): Highlights the significant increase in ancillary costs, "If I'm going to spend 60 or 80 or $100,000 a year on everything around the house, maybe I don't need to own a place in Florida."
- Barry (07:19): Discusses the national trend of rising insurance costs due to increasing natural disasters, noting, "There's a steady rising tide."
4. Midwest Real Estate: Affordability vs. Local Income
Key Discussion: The Midwest's real estate market is analyzed, contrasting affordable home prices with varying local incomes. This section underscores how affordability does not always translate to better affordability relative to earnings.
Notable Insights:
- Barry (09:55): "Affordability to buy a vacation home in Wisconsin is reasonable, but not to locals."
- Jonathan (10:57): Points out that higher median incomes in areas like New Jersey make expensive homes more accessible relative to earnings.
5. Foreign Investment and the Impact of a Weaker Dollar
Key Discussion: The impact of international buyers on the U.S. real estate market is examined, particularly in the context of a weakening dollar and geopolitical uncertainties.
Notable Insights:
- Barry (13:19): "We've had periods where international buyers enjoyed significant discounts due to currency fluctuations."
- Jonathan (14:13): Notes that despite a weaker dollar, factors like immigration policies and tariff uncertainties are dampening foreign investment.
6. Elevated Mortgage Rates and Their Influence on Second Home Purchases
Key Discussion: The dialogue addresses how sustained high mortgage rates are affecting potential second home buyers, especially younger demographics who may rely on mortgages rather than all-cash deals.
Notable Insights:
- Barry (15:55): "Elevated mortgage rates are restraining the second home market. Rates are stuck just below 7% on a fixed rate."
- Jonathan (16:25): Clarifies that second home mortgages often come with higher rates compared to primary residences.
7. Demographic Shifts: Millennials and Gen Z Entering the Second Home Market
Key Discussion: Barry and Jonathan discuss the emerging trend of younger generations, particularly Millennials and Gen Z, investing in second homes. They explore motivations and preferences driving this shift.
Notable Insights:
- Barry (18:08): "Millennials are pushing into not just homeownership but second home ownership."
- Jonathan (20:17): Describes fractional or co-ownership models as still marginal trends, rather than mainstream.
8. Navigating the Vacation Property Market: Tools and Strategies
Key Discussion: Advice is offered on leveraging digital tools and professional expertise to successfully purchase a vacation property. Emphasis is placed on the importance of local real estate agents despite the wealth of online information.
Notable Insights:
- Barry (26:08): "You need to see an agent, someone that's a local expert in a market, which is a whole nother thing."
- Jonathan (27:16): Reiterates the necessity of human guidance in the home-buying process, despite the availability of online resources.
9. Tailored Advice for Luxury vs. Millennial Buyers
Key Discussion: The episode concludes with targeted advice for two distinct buyer profiles: those seeking luxury vacation properties and younger buyers aiming for more affordable second homes.
Luxury Buyers:
- Barry (30:10): Advises luxury buyers to be prepared for competitive markets, especially in high-demand areas like New York Metro. "Don't be afraid of the chaos in the housing market."
Millennial Buyers:
- Barry (28:20): Suggests using home equity from a primary residence to finance a second home purchase, emphasizing current high equity levels.
- Jonathan (29:27): Shares personal frustrations with the competitive nature of luxury real estate, underscoring the importance of strategic bidding and market awareness.
Conclusion
Barry and Jonathan wrap up by reiterating the importance of being informed, understanding regional market specifics, and leveraging professional expertise when purchasing a vacation property. They emphasize the evolving landscape of the second home market, shaped by economic factors, demographic shifts, and changing lifestyle preferences.
Final Takeaway: "Keep your eye on what's going on, get informed, and work with a local expert to help find your dream vacation property." – Jonathan Miller (33:16)
Notable Quotes with Timestamps:
- Barry (02:24): "Coming out of the pandemic, we probably had the biggest second home purchase boom in history as people were re-engaging with the outdoors."
- Jonathan (05:53): "South Florida just became victims of their own success."
- Barry (07:19): "There's a steady rising tide of insurance costs due to increasing natural disasters."
- Jonathan (10:57): "Paying a high price for homes in New Jersey is actually cheaper than an inexpensive home in another part of the country relative to your income."
- Barry (15:55): "Elevated mortgage rates are restraining the second home market."
- Jonathan (27:16): "Don't be afraid of the chaos in the housing market."
Final Remarks: For listeners interested in purchasing a vacation home, this episode offers a comprehensive overview of current market trends, regional variations, and strategic advice tailored to different buyer profiles. Leveraging both data-driven insights and practical experiences, Barry Ritholtz and Jonathan Miller provide valuable guidance for navigating the complex landscape of second home ownership.