18 June 2025

At The Money: Buying a Vacation Home with Jonathan Miller

1Frameworks

11Insights

Listen

Frameworks in this episode

Finance6 steps

Vacation Home Research-to-Local-Expert Method

Use online data to shortlist properties, then validate them with a local expert

Read →

Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 3

Myth Buster01:52

Why Vacation-Home Inventory Cannot Be Judged Statewide

Inventory is increasing in many markets, but the starting point and exact location determine what that increase means. Florida illustrates the divergence: Miami-Dade inventory rose sharply while Palm Beach County experienced declining inventory.

An inventory increase may begin from a record-low base
Some markets remain below pre-pandemic supply
Miami-Dade supply rose about 50% over the previous year
Palm Beach County's inventory declined despite being in the same region

“But it is very location specific.”
Jonathan Miller · 02:23

“Miami Dade is really seeing a lot of supply come in significant about fifty percent over the last year up.”
Jonathan Miller · 03:27

#inventory#florida#regional markets

Myth Buster08:29

When Local Income Stops Explaining Local Home Prices

Home prices often track local wages, making seemingly inexpensive regions less affordable to local residents than outsiders expect. However, globally attractive and affluent markets such as Manhattan can detach from local median income because buyers draw wealth from far beyond the immediate population.

Nominally cheap homes may not be cheap relative to local wages
Outsiders can misread Midwestern affordability through higher-income assumptions
Local-income ratios work differently in internationally demanded markets
Manhattan housing prices reflect mobile and concentrated wealth

“it's almost entertainment because the affordability, you know, to buy a vacation home and say Wisconsin, north of Chicago where I used to live, you…”
Jonathan Miller · 08:29

“the median income in Manhattan, it has no bearing on the price of housing because there's such an international and also, you know, affluence that…”
Jonathan Miller · 10:40

#affordability#median income#manhattan#midwest

Myth Buster18:25

Fractional Vacation-Home Ownership Is Still Mostly a Storyline

Despite attention around friends or multiple families sharing vacation properties, Miller does not see broad evidence that fractional ownership is a major market trend. He characterizes it as an activity occurring at the margin rather than a defining shift.

Co-ownership receives more attention than its scale warrants
The trend remains marginal in Miller's market observations
Multigenerational family use is distinct from commercial fractional ownership

“To me, it's more of a rounding error.”
Jonathan Miller · 18:53

“it's an interesting storyline, but I'm not seeing that it's happening on the margin more than anything else.”
Jonathan Miller · 18:55

#fractional ownership#co-ownership#vacation homes

Hot Take· 2

Hot Take11:52

A Weak Dollar No Longer Guarantees a Foreign-Buyer Surge

Historically, a weaker dollar produced substantial effective discounts for overseas purchasers and boosted demand in cities such as New York. Miller argues that immigration concerns, tariff instability, and broader uncertainty are currently offsetting that currency advantage.

Currency movements once created discounts approaching 50%
New York historically gained foreign demand when the dollar weakened
Asian buyers also value access to high-quality universities
Policy uncertainty can outweigh an attractive exchange rate

“New York, you know, had a tremendous would have a tremendous surge every time the dollar got weaker.”
Jonathan Miller · 12:09

“it's offsetting the benefit of a discount that we're not seeing the influx of international demand that we normally would expect during this this type…”
Jonathan Miller · 13:23

#foreign buyers#dollar#tariffs#immigration

Hot Take19:04

The Airbnb Gold Rush Created Its Own Oversupply Problem

Short-term rentals can earn substantially more per square foot than annual leases, but that headline advantage attracted many owners simultaneously. In parts of the Southwest, oversupply has left properties unable to cover monthly costs and may push disappointed owners to sell.

Professionally managed rentals may be classified as investment properties
Investment financing carries higher mortgage rates
Southwestern markets have an oversupply of Airbnb properties
Short-term rent per square foot can exceed annual-lease rent by 2.5 times
Expected returns can collapse when many owners pursue the same strategy

“there's a massive oversupply of Airbnb properties that are not sort of covering the monthly costs.”
Jonathan Miller · 19:58

“because everybody had the same idea at the same time, there's certainly a place for it, but I think it's been a little bit over…”
Jonathan Miller · 20:23

#airbnb#short-term rentals#oversupply#investment property

Explainer· 4

Explainer00:58

The Second-Home Market Is Normalizing After Its Pandemic Boom

Second-home buying surged to an extraordinary level as people re-engaged with outdoor spaces after the pandemic. Recent purchase declines look less alarming when compared with pre-pandemic norms rather than the exceptional boom years.

The pandemic produced a historic second-home buying boom
Purchases subsequently dropped from unusually high levels
Current activity is closer to conditions from seven or eight years earlier
Boom-year comparisons can distort assessments of today's market

“we probably had the biggest second home purchase boom in history”
Jonathan Miller · 01:01

“Now it's I would describe it as more normalized”
Jonathan Miller · 01:17

#second homes#pandemic#housing market

Explainer05:53

Insurance Is Rewriting the Economics of Second-Home Ownership

Insurance, taxes, and related expenses have shifted from incidental costs to central components of the buying decision. The pressure is national, with different regions exposed to wildfires, tornadoes, and flooding, while insurance can consume the largest share of property value in lower-priced Midwestern markets.

Obtaining insurance coverage can be as challenging as paying for it
Climate-related risks affect markets across the country
Lower home values can make insurance proportionally more burdensome
Recurring costs may make travel more attractive than ownership

“what we've been seeing in the last several years is a big jump in not not just the cost, but actually getting coverage in insurance.”
Jonathan Miller · 06:11

“the most expensive uh uh insurance cost relative to home prices is the Midwest.”
Jonathan Miller · 07:04

#insurance#ownership costs#climate risk#midwest

Explainer14:29

Second-Home Mortgages Carry a Rate and Underwriting Premium

Financed vacation homes face more restrictive economics than primary residences. Buyers should expect an interest-rate premium, tighter underwriting, and a market in which elevated borrowing costs are restraining demand and slowing price growth.

Second-home rates may be 0.5 to 0.75 percentage points higher
Underwriting ratios are tighter than for primary homes
Rates near 7% restrain non-luxury buyers
Price growth is plateauing or slipping in some markets

“When you when you're looking at a second home purchase, you probably want to add a half to three quarters of a percent to the…”
Jonathan Miller · 14:42

“And the underwriting is a little tougher as well.”
Jonathan Miller · 14:59

#mortgages#interest rates#underwriting#pricing

Explainer22:24

Remote Work Turned Some Vacation Homes Into Co-Primary Residences

The pandemic changed what buyers demand from second homes. Properties once intended mainly as escapes are now evaluated for schools, internet quality, commuting feasibility, and compatibility with uncertain return-to-office policies.

Miller calls the new use pattern a co-primary residence
Remote work expanded the practical role of second homes
Buyers began assessing schools and internet connectivity
Return-to-office policies constrain acceptable locations
Traditional getaway priorities now compete with work requirements

“I called it co primary basically it was a co primary residence.”
Jonathan Miller · 23:32

“people coming out of a pandemic were looking for quality of schools, if they had a young family.”
Jonathan Miller · 23:46

#remote work#return to office#co-primary#buyer preferences

Story· 1

Story16:42

Living Inheritances Are Moving Younger Buyers Into Second Homes

Millennials are progressing into both first-home and second-home ownership, sometimes with substantial help from baby-boomer parents. Rather than waiting to transfer wealth after death, affluent families increasingly make larger property gifts while the parents are alive.

Millennials are entering second-home ownership
Some parents transfer property wealth during their lifetimes
Family purchases have shifted from small studios to multimillion-dollar apartments
Early transfers can accelerate younger buyers' access to property

“we're absolutely seeing the millennials first just you know, push into home ownership, not just home ownership, but second home owner ownership.”
Jonathan Miller · 16:42

“that is giving these this generation sort of a jump start.”
Jonathan Miller · 18:16

#millennials#inheritance#family wealth#homeownership

Takeaway· 1

Takeaway28:44

Forty Percent of New York Metro Buyers Still Pay Over Asking

Limited inventory continues to produce bidding wars in the New York metropolitan area even as conditions cool elsewhere. Sellers and buyers often retain incompatible expectations formed during the pandemic, so transactions take time to converge on present market conditions.

About 40% of relevant New York Metro closings were above asking price
The share had fallen from more than 50% six months earlier
Comparable bidding pressure is nearly absent in some Sun Belt markets
Both parties may need to abandon pandemic-era expectations
Ongoing policy uncertainty has become part of the market environment

“forty percent of the closings the buyer paid over ask. That's a reality.”
Jonathan Miller · 28:58

“Both have to sort of capitulate to the actual market conditions.”
Jonathan Miller · 30:06

#bidding wars#new york metro#market psychology#inventory