Speaker 1: Have you thought about owning or buying a vacation property.
Speaker 1: Would you like a place to take the family to
Speaker 1: on a lake near the beach or up in the mountains.
Speaker 1: I have, and I know a lot of our listeners
Speaker 1: have also. Let's bring in Jonathan Miller, a CEO and
Speaker 1: founder of Miller Samuel, a highly rated data analytics and
Speaker 1: research firm covering the housing market. He has written a
Speaker 1: number of pieces on vacation homes, second property, luxury properties,
Speaker 1: and what's happening in that market. So Jonathan, let's just
Speaker 1: talk a little bit about what's going on in the
Speaker 1: second home market, whether it's the luxury market or not.
Speaker 1: Tell us a little bit about what's going on out there.
Speaker 2: Well, you know, we had coming out of the pandemic,
Speaker 2: we probably had the biggest second home purchase boom in
Speaker 2: history as people were coming, you know, sort of re
Speaker 2: engaging with the outdoors again after the pandemic. And then
Speaker 2: in the last couple of years we've actually seen a
Speaker 2: big drop off in second home purchases. Now it's I
Speaker 2: would describe it as more normalized, where it's more consistent
Speaker 2: with seven or eight years ago before the pandemic, and
Speaker 2: comparisons against the last few years are probably unfair to
Speaker 2: the market.
Speaker 1: So what's going on then with the supply of homes
Speaker 1: for sale? Obviously twenty twenty one, twenty two, a lot
Speaker 1: of supply got sucked up. As a percentage of average
Speaker 1: home numbers for sale, that number seems to have plummeted.
Speaker 1: Has that normalized?
Speaker 3: Yet it depends on location.
Speaker 2: The way I think of it is, we all are
Speaker 2: seeing a big uptick in supply, but it depends on
Speaker 2: where the uptick began. You know, did it become begin
Speaker 2: at a record load number and now it's you know,
Speaker 2: we have some markets, a lot of markets that are
Speaker 2: still behind pre pandemic inventory levels, but we have a
Speaker 2: growing number of markets that are sort of catching up
Speaker 2: or exceeding.
Speaker 3: But it is very location specific.
Speaker 1: The one let me gues let me take a few guesses.
Speaker 1: I'm going to guess that we're seeing a big uptick
Speaker 1: in supply in southern Florida and not as much supply.
Speaker 1: And let's say the Hampton's or Jersey Shore off of
Speaker 1: New York, or Newport or any of the vacation destinations
Speaker 1: off of Boston. That's just my instinct. I'm curious what
Speaker 1: your data shows.
Speaker 2: It shows exactly that you know. And another way to
Speaker 2: really look at this simplistically is I think of Sunbown
Speaker 2: versus everybody else, a sunbelt. You know, it's new product
Speaker 2: can be built faster, you know, the whole moving away,
Speaker 2: you know, to something cheaper. You know, a cheaper housing market,
Speaker 2: which tends to be to the south was sort of overdone,
Speaker 2: and now there's a big difference. Even within South Florida.
Speaker 2: You look at Miami Dade is really seeing a lot
Speaker 2: of supply come in significant about fifty percent over the
Speaker 2: last year up.
Speaker 3: But then two.
Speaker 2: Counties to the north, go Broward and then go Palm
Speaker 2: Beach County. Palm Beach County is seeing declining inventory. So
Speaker 2: I don't think there's a correlation with the further south
Speaker 2: you go, the more inventory is rising.
Speaker 3: But that seems to be what's actually happening in Florida.
Speaker 1: Palm Beach kind of reminds me of East Hampton or
Speaker 1: seg Harbor or something like that. So it's more, you know,
Speaker 1: East end of Long Island. Like, is it fair to
Speaker 1: say that a lot of parts of places like South
Speaker 1: Florida just to become victims of their own success? There
Speaker 1: was such an exodus from California to Texas, from New York,
Speaker 1: New Jersey, Connecticut to Florida, that it just seemed to
Speaker 1: overwhelm the infrastructure and the supply. Fair statement, that's a
Speaker 1: very fair statement. And then throwing hurricanes on the Gulf side.
Speaker 1: The Gulf side with you know, has has seen a
Speaker 1: much faster rise in supply than the ocean side of Florida.
Speaker 1: And I wonder too if that's part of you know,
Speaker 1: Canadians tend to gravitate towards the Gulf side, and you know,
Speaker 1: with the trade war that we're having right now, maybe
Speaker 1: that's playing into it as well. So we were looking
Speaker 1: in of all times, January twenty twenty on the Gulf
Speaker 1: side in places like Saint Petersburg for a winter home,
Speaker 1: and then the pandemic shut everything. And when everything reopened,
Speaker 1: I wasn't as surprised about the big increase in home
Speaker 1: prices as I was the giant increase in things like
Speaker 1: insurance taxes, HOA fees. It got to the point, wait,
Speaker 1: if I'm going to spend sixty or eighty or one
Speaker 1: hundred thousand dollars a year on everything around the house,
Speaker 1: not actually buying the house, Hey, that pays for a
Speaker 1: lot of nice vacations. Maybe I don't need to own
Speaker 1: a place in Florida. I could just visit how significant
Speaker 1: is the cost structure change in southern Florida? What's going
Speaker 1: on there? And where else are we seeing that sort
Speaker 1: of spike in home ownership costs?
Speaker 3: Right?
Speaker 2: So, you know when in the old days, when you
Speaker 2: bought a house and you were worried about the interest
Speaker 2: rate and the price of the house, uh, the the
Speaker 2: costs of home ownership. Beyond that, we're sort of a
Speaker 2: rounding area. You weren't thinking about the cost of insurance,
Speaker 2: real estate taxes. And what we've been seeing in the
Speaker 2: last several years is a big jump in not not
Speaker 2: just the cost, but actually getting coverage in insurance. One thing,
Speaker 2: you know, when we think about other parts of the
Speaker 2: country that are sort of struggling, I would I would characterize.
Speaker 3: This as more of a national condition. Now.
Speaker 2: California as wildfires, the Midwest is tornadoes, and the southeast
Speaker 2: and eastern seaboard is an inland too is flooding. So
Speaker 2: there just seems to be this sort of steady rising tide,
Speaker 2: no pun intended, but of it. And actually the one
Speaker 2: thing that you know, in all my research about this
Speaker 2: over the last couple of years, the most expensive uh
Speaker 2: uh insurance cost relative to home prices is the Midwest.
Speaker 2: It's not Florida, it's not uh you know, wildfows in California,
Speaker 2: because housing is so much less expensive in the Midwest.
Speaker 1: But it's a bigger chunk.
Speaker 3: It's a bigger, bigger liability or so.
Speaker 1: We were just in Chicago a week or two ago,
Speaker 1: and what was so interesting. So I'm in Chicago over
Speaker 1: year for Thanksgiving, for forever. I always find the Midwest
Speaker 1: and Chicago in particular, a smaller, more manageable, more rational,
Speaker 1: much more affordable version of New York City. But a
Speaker 1: lot of people we spoke to there in Chicago, in Detroit,
Speaker 1: in Milwaukee, all the Great Lakes, like what we talk
Speaker 1: about on the East Coast with beach property, Hampton's Fire Islands,
Speaker 1: Jersey Shore, Delaware, go down the whole list. They all
Speaker 1: talk about some people have homes on Lake Michigan, or
Speaker 1: if you're coming from Grand Lake Streams, there's just a
Speaker 1: run of vacation properties and the prices seem almost reasonable.
Speaker 1: What are you seeing in the Midwest market for real
Speaker 1: estate prices?
Speaker 3: So it's always really dangerous to sort of make a
Speaker 3: living in the East and then go to the Midwest
Speaker 3: and look at housing prices, and it's almost entertainment because
Speaker 3: the affordability, you know, to buy a vacation home in say, Wisconsin,
Speaker 3: north of Chicago where I used to live, you know,
Speaker 3: is you know, a reasonable but not to locals, right,
Speaker 3: And my head.
Speaker 1: Tray in the office after this hole we had a
Speaker 1: big event in Chicago. He's like, oh my god, I
Speaker 1: can't believe how reasonable everything is here, Like you and
Speaker 1: your fiance should move there. The only catches we have
Speaker 1: to cut your salary forty percent because that's the local wage.
Speaker 1: So clearly home prices track local median income. I don't
Speaker 1: remember if it was your research note that talked about,
Speaker 1: or maybe it was Paul Krugman's talked about all New
Speaker 1: Jersey as one of the densest populations in the country
Speaker 1: with one of the highest home price in the country
Speaker 1: but an even higher median income on average. And so
Speaker 1: it turns out that paying a high price for homes
Speaker 1: in New Jersey is actually cheaper then an inexpensive home
Speaker 1: in another part of the country relative to your income.
Speaker 1: So that really begs the question how significant is local
Speaker 1: income to vacation properties, lakefront homes and beach houses.
Speaker 2: Well, you know, it's in danger of saying it depends,
Speaker 2: but it depends.
Speaker 1: You know.
Speaker 2: I think about a market that that I lived in
Speaker 2: and cover market like Manhattan, which is known for lots
Speaker 2: of pidtees, you know, places in the city that people
Speaker 2: in the suburbs buy homes there. If you look at
Speaker 2: the median income in Manhattan, it has no bearing on
Speaker 2: the price of housing because there's such an international and also,
Speaker 2: you know, affluence that gravitates there. So so the meeting
Speaker 2: income doesn't really relate.
Speaker 3: It's you know, it's like, you know, seventy thousand or
Speaker 3: some you know, you know, and the median home price
Speaker 3: in Manhattan is about a million two, which it gets
Speaker 3: you a studio, right, maybe a small one bedroom in
Speaker 3: a walk up.
Speaker 1: So since you're mentioning foreign buyers, let's talk about what's
Speaker 1: going on with the public policy and in particular the dollar.
Speaker 1: We've seen the dollar full off from its highs recently.
Speaker 1: You talked about this in a recent research note. What
Speaker 1: does the strength of the dollar mean for potential buyers
Speaker 1: of real estate from overseas? And what has let's just
Speaker 1: call the damage to America the brand the black guy
Speaker 1: that we sort of see Uncle Sam having. What does
Speaker 1: that mean for outside purchasers.
Speaker 3: At least at this point, it's an offset in other words,
Speaker 3: that we've had periods of time where you know, you know,
Speaker 3: if you're coming from Europe, you were enjoying a fifty
Speaker 3: percent discount off the currency play for a US home,
Speaker 3: and so New York, you know, had a tremendous would
Speaker 3: have a tremendous surge every time the dollar got weaker.
Speaker 2: We had periods I want to say two thousand and six,
Speaker 2: two thousand and seven where I called it the Irish
Speaker 2: Carpenter syndrome where you had sort of, you know, people
Speaker 2: of modest means in Ireland getting fifty percent discounts on
Speaker 2: million dollar condos in midtown.
Speaker 1: Well about the other coast, what about Japan, China, Korea,
Speaker 1: It's Asia buying San Francisco, La Joia, San Diego, and
Speaker 1: even across the border of Vancouver.
Speaker 2: Well, a big driver is access to university, high quality universities,
Speaker 2: and so the Asian demand, that's one of the amenities
Speaker 2: they're really looking for, you know, sort of over the
Speaker 2: long run.
Speaker 3: The problem with.
Speaker 2: The weaker currency or the weaker dollar is that the
Speaker 2: state of immigration and the sort of what I call
Speaker 2: the tariff tantrums and the uncertainty that is abound at
Speaker 2: the moment has essentially at least you know, in my
Speaker 2: anecdotal observation at this moment is you know, it's offsetting
Speaker 2: the benefit of a discount that we're not seeing the
Speaker 2: influx of international demand that we normally would expect during
Speaker 2: this this type of dollar environment.
Speaker 1: So, since you mentioned the tariff tantrum that seems to
Speaker 1: be keeping mortgage rates elevated. Doesn't really matter to luxury
Speaker 1: properties three four five million dollars. Those are mostly cash
Speaker 1: deals I've learned from in your research notes. But what
Speaker 1: about you know, younger folks in their not in their
Speaker 1: twenties and thirties, but perhaps in their late thirties and
Speaker 1: forties who want a vacation property. They're not spending tens
Speaker 1: of millions of dollars. They're spending something a little more reasonable,
Speaker 1: but they're probably putting ten twenty thirty percent down and
Speaker 1: putting a mortgage on it. What is these elevated mortgage
Speaker 1: rates doing to that market?
Speaker 3: So it's restraining it. The way to think of rates
Speaker 3: is they're sort of you know, stuck at sort of
Speaker 3: you know, just below seven percent on a fixed rate.
Speaker 3: When you when you're looking at a second home purchase,
Speaker 3: you probably want to add a half to three quarters
Speaker 3: of a percent to the rate of a primary residence.
Speaker 1: So it's more for a second home mortgage than a
Speaker 1: primary home.
Speaker 2: Yes, yes, And the underwriting is a little tougher as well.
Speaker 2: There's ratios that are a little bit tighter, you know,
Speaker 2: And that's the way to think of it. However, you know,
Speaker 2: you know, if you're looking for like a break in pricing,
Speaker 2: you know, pricing now with the uncertainty and the rates
Speaker 2: being stuck at an elevated level, the rate of price
Speaker 2: growth is starting, you know, has been really over the
Speaker 2: last few months, starting to ratchet down a bit.
Speaker 1: So it's plateauing.
Speaker 3: Yeah, I would say plateauing is probably a fair term
Speaker 3: in some markets, even slipping a bit. We still have
Speaker 3: markets that are rising, but those tend to be primary
Speaker 3: housing markets, like if you're in New York City. Metro
Speaker 3: Long Island grew ten percent last year, you know, big numbers.
Speaker 1: So let's since we mentioned the non luxury second home.
Speaker 1: Let's talk demographics a little bit. What about millennials and
Speaker 1: Gen z are they remember during the twenty tens, they
Speaker 1: stared clear from the initial housing market. They were forming
Speaker 1: households at a very low rate. Along the same time
Speaker 1: as builders had kind of pivoted post crisis to multifamily
Speaker 1: and away from single family homes. Not only are those
Speaker 1: generations now buying first homes, some of them, I hesitate
Speaker 1: say many of them, but some of them are looking
Speaker 1: at second homes. How do you think about demographics and
Speaker 1: where these folks look at a vacation property.
Speaker 2: So you're right, we're absolutely seeing the millennials first just
Speaker 2: you know, push into home ownership, not just home ownership,
Speaker 2: but second home owner ownership. If you think about this
Speaker 2: at a top sort of at a top level, one
Speaker 2: of the things that's been changing with the baby boomer
Speaker 2: generation is buying homes or giving what the kids would
Speaker 2: wait until their.
Speaker 3: Parents passed you. We were seeing a lot, you know,
Speaker 3: like twenty thirty years.
Speaker 1: Of DeVos is the technical term. You're making the gift
Speaker 1: while you're alive, to.
Speaker 3: Glow the basket and the glow right, and and that's
Speaker 3: a thing and just sort of you know, the quick
Speaker 3: observation is in the eighties when I started up my company,
Speaker 3: it was very common for, you know, in Manhattan, for
Speaker 3: parents to buy like a studio apartment sort of the
Speaker 3: size of a hotel room for their kids that were
Speaker 3: going to college in that and it would become a
Speaker 3: piedotar for the family down the road. Now they're buying
Speaker 3: three four five million dollar apartments, and.
Speaker 2: As opposed to little efficiency type places, we're seeing a
Speaker 2: much bigger price.
Speaker 3: Tag on this, as you know and I and that
Speaker 3: is giving these this generation sort of a jump start.
Speaker 1: So you're kind of employing I don't want to say
Speaker 1: fractional ownership or co ownership. It's multiple generations of a
Speaker 1: family using the same second property. But what about those
Speaker 1: sort of things We've seen business models of fractional ownership,
Speaker 1: or I've heard stories of close friends two or three
Speaker 1: families co owning a property. Is this a real trend
Speaker 1: or is this still a rounding error?
Speaker 2: To me, it's more of a rounding error. You know,
Speaker 2: it's an interesting storyline, but I'm not seeing that it's
Speaker 2: happening on the margin more than anything else. What's really
Speaker 2: interesting in the world of airbnb and investor ownership. You know,
Speaker 2: lenders there's a higher rate for that, right, a higher
Speaker 2: mortgage rate if you're financing. But you know, to my understanding,
Speaker 2: you can as long as you on a second home,
Speaker 2: as long as you.
Speaker 3: Control the house, meaning you don't have tenants in it
Speaker 3: for more than six months, you can claim it as
Speaker 3: a second residence.
Speaker 1: What does that do for you tax wise if it's
Speaker 1: a second residence, as always do a business.
Speaker 3: That I don't know, you know, every situation is so different,
Speaker 3: but I.
Speaker 2: Know that with with airbnbs, if you're using a professional
Speaker 2: manager to manage it for you, then it's considered an
Speaker 2: investor property.
Speaker 3: It's it's not. And you know we've had like in
Speaker 3: the southwestern US, you know, there's a massive oversupply of
Speaker 3: Airbnb properties that are not sort of covering the monthly costs.
Speaker 3: So I'm not necessarily encouraging that.
Speaker 1: There's going to be some supply coming on the market.
Speaker 1: When people say, hey, this just isn't worth the headache,
Speaker 1: is that the implication?
Speaker 3: Yeah, yeah, that that you know, I'm not getting the
Speaker 3: returns that I that I thought I would get. You know,
Speaker 3: because everybody had the same idea at the same time,
Speaker 3: there's certainly a place for it, but I think it's
Speaker 3: been a little bit over overused.
Speaker 2: And you know, the other thing is, and you know,
Speaker 2: when we think about Airbnb versus being an investor, a
Speaker 2: pure investor in renting it out for you know, for
Speaker 2: six months or a year, is that you don't get
Speaker 2: to use the property right and let you know, And
Speaker 2: and that's been one of the selling points of Airbnb
Speaker 2: as a you know, as a landlord. And then the
Speaker 2: other thing is that generally, you know, when you look
Speaker 2: at their data, they generate about two and a half
Speaker 2: times the rent per square foot of a one year lease,
Speaker 2: and some even generate more like one fine Stay is
Speaker 2: a sort of luxury Airbnb, and it's like three times.
Speaker 1: Rentals are more expensive than longer term rentals. Yes, so
Speaker 1: let's I think everybody knows what are the super hot destinations,
Speaker 1: but I know the super hot vacation home destinations. But
Speaker 1: I know, you crunch a lot of data. What do
Speaker 1: you see as sort of up and coming? What do
Speaker 1: you see as hot that are probably going to surprise
Speaker 1: most people who pay attention to real estate.
Speaker 3: Well, I think if New Hampshire and from hot, which
Speaker 3: isn't really.
Speaker 1: A or a ski ski location.
Speaker 2: Yeah, that's probably my my built in bias for going
Speaker 2: north when the kids are young for every vacation and
Speaker 2: not south. But there just seems to be especially probably
Speaker 2: more New Hampshire than Vermont, a tremendous at least in
Speaker 2: the northeast. There was a from the pandemic through now
Speaker 2: there was a tremendous boom in New Hampshire housing because
Speaker 2: of the second home phenomenon. What's really interesting something that
Speaker 2: I hadn't paid much attention to until the last couple
Speaker 2: of years, is with the whole push for rto you
Speaker 2: return to office, some people that are buying second homes
Speaker 2: really want to be cognizant of their employers', you know,
Speaker 2: future policies on how often you have to be in
Speaker 2: the office, because.
Speaker 1: I know I could take a cannonball from West Hampton
Speaker 1: into Manhattan and it's marginally longer than my normal commute
Speaker 1: into the city. But it raises an interesting question, how
Speaker 1: has the rise of the remote work, work from home
Speaker 1: and the return to office, how is that impacting buyer
Speaker 1: preferences for vacation homes and where they're located.
Speaker 2: So there was a word that somebody I was giving
Speaker 2: a presentation, you know, right after the sort of dark
Speaker 2: days of the pandemic, and I remember a real estate agent,
Speaker 2: you know, I was trying to describe that, you know,
Speaker 2: people moving to a second home market because they could
Speaker 2: work remotely. I called it co primary basically it was
Speaker 2: a co primary residence. So what people what I found,
Speaker 2: people coming out of a pandemic were looking for quality
Speaker 2: of schools, if.
Speaker 3: They had a young family. You know, they were looking
Speaker 3: at things that you normally don't consider internet, you know, quality,
Speaker 3: things that you normally only don't consider when you're buying
Speaker 3: a second home. The hall day would be about second
Speaker 3: home is to get away from it all. But that's
Speaker 3: been sort of co opted by the need to work
Speaker 3: or the desire to reduce commuting or you know, you
Speaker 3: know who doesn't like to maybe work in their pajamas.
Speaker 1: Right, So, how would you recommend, given all of the apps,
Speaker 1: all of the data, all of the things that are
Speaker 1: out there, someone shopping for a vacation property, how should
Speaker 1: they be using an app like let's say Zillow or
Speaker 1: redfin in order to help them find a vacation property
Speaker 1: they really want to own.
Speaker 3: Right, So, you know, the apps make it all accessible pictures.
Speaker 3: You know, you can see lots of information.
Speaker 2: But this sounds old school, But once you have that information,
Speaker 2: you know you have you know, you've looked at a
Speaker 2: you know, online a dozen properties that sort of you know,
Speaker 2: make sense to you. You really need to see an agent,
Speaker 2: you know, you need to talk to a human being,
Speaker 2: you know, and someone that's a local expert in a market,
Speaker 2: which is a whole other thing which you can through
Speaker 2: these apps figure out, you know, does their name pop
Speaker 2: up all over the place, and have them talk you
Speaker 2: through it if there's a moment in your life that
Speaker 2: you need handholding. Even though you think you know everything.
Speaker 2: I think it's home bying you do, and you know
Speaker 2: all the sort of stories while they're just trying to
Speaker 2: sell you out. Yeah they're trying to sell you a house,
Speaker 2: but they're also they're also a wealth of information and
Speaker 2: you can't get that online.
Speaker 1: Huh. Really really interesting stuff. So final question in two parts,
Speaker 1: what sort of advice would you give somebody who asks, Hey,
Speaker 1: I'm looking to buy a luxury property in a hot area.
Speaker 1: And what advice would you give to a millennial someone
Speaker 1: in their late thirties or forties. Hey, we'd love to
Speaker 1: have some reasonable vacation property. What do you tell those folks?
Speaker 2: So the first is incredibly obvious. There is so much
Speaker 2: information at your fingertips in terms of understanding the cost
Speaker 2: the additional mortgage expense if you're.
Speaker 3: Going that route.
Speaker 2: To think about the equity that you have in your
Speaker 2: existing primary residence, if you have one. You know, right
Speaker 2: now we're you know, basically looking at record or near
Speaker 2: record home equity because of the price growth that we've
Speaker 2: seen over the last five seven years. And maybe that's
Speaker 2: a financing vehicle or an acquisition vehicle for your purchase.
Speaker 1: Certainly down the payment you could borrow from your home,
Speaker 1: even though it will have to be disclosed to the bank.
Speaker 3: Yes, yes, you know, and you know banks, you know listen,
Speaker 3: if you have a boatload of equity in your home,
Speaker 3: you know it's you know, I see this quite a
Speaker 3: bit where people use that to buy a smaller home,
Speaker 3: a second home.
Speaker 1: And you know, we as we've seen in the past,
Speaker 1: leveraging up your primary residence to buy a luxury property.
Speaker 1: How could that ever go wrong?
Speaker 3: Right right right right exactly, you know, and and.
Speaker 2: The sort of saving grace to that, unlike during the
Speaker 2: financial crisis is that credit conditions remain tight, so lenders
Speaker 2: aren't just giving away.
Speaker 3: Loans.
Speaker 2: If you have a pulse or foger mirror like we
Speaker 2: had during the financial crisis, it's actually a thing. You know,
Speaker 2: they're actually doing their due diligence.
Speaker 1: And doing their jobs. Go figure, that's a crazy concept.
Speaker 3: It's kind of a crazy concept. But let me refocus you.
Speaker 1: Let me refocus you on the luxury question, because I
Speaker 1: know you bought a property not too long ago. I
Speaker 1: bought a property not too long ago, and I was
Speaker 1: I learned from your experience. I was completely frustrated by
Speaker 1: people making all cash offers for over the asking price.
Speaker 1: And I'm like, I can't believe we lost another house.
Speaker 1: I thought we were in. So someone comes to you
Speaker 1: and says, I'm doing pretty well. I got a nice
Speaker 1: bonus this year. We'd love to get a vacation property,
Speaker 1: and we're not. We're looking over two million dollars. We're
Speaker 1: not going to go crazy, but we have a decent budget.
Speaker 1: What advice do you give somebody like that, Well.
Speaker 2: The first thing is, you know, if you're in a
Speaker 2: housing market with limited inventory.
Speaker 3: New York Metro, the share of bidding worth of transactions
Speaker 3: is in the forty ish percent, meaning that forty percent
Speaker 3: of the closings the buyer paid over ask. That's a reality.
Speaker 1: Still twenty twenty five, that's going on.
Speaker 2: Absolutely, it is not what it was six months ago.
Speaker 2: Is fifty more than fifty percent in the New York
Speaker 2: metro area, you know, outside of the city. The city
Speaker 2: isn't seeing that city is a much lower number. But
Speaker 2: but that's sort of the reality. But then you know,
Speaker 2: if you go to other markets, like we were talking
Speaker 2: about the Sun Belt, you know that that's almost non existent.
Speaker 2: I just still think that the sellers are embedded with
Speaker 2: sort of a bravado that you know, is still you know,
Speaker 2: was built up during the pandemic. And I also think
Speaker 2: that buyers are sort of have a bravado that they're
Speaker 2: going to get the most amazing deal, and so that
Speaker 2: the gap between them, you know, is a lesson and
Speaker 2: it takes the parties a while to you know, to
Speaker 2: sort of meet halfway. Both have to sort of capitulate
Speaker 2: to the actual market conditions. And part of what's happened
Speaker 2: things have happened so quickly, just with the tariffs and
Speaker 2: the confusion, I had this sort of cocumyey theory that
Speaker 2: came up out of you know, the you know, when
Speaker 2: we think about tariff policy having foot flopped at least
Speaker 2: fifty times, there's this uncertainty that we're sort of all
Speaker 2: living with, and in some ways, that sort of chaos
Speaker 2: or uncertainty as it relates to housing becomes a constant
Speaker 2: as opposed to this new thing. It's sort of, you know,
Speaker 2: it's a reality, and if you're in the housing market,
Speaker 2: you have to be sort of aware that there is
Speaker 2: a chaos to it still and don't be afraid of it.
Speaker 1: So to wrap up those people searching for a vacation property,
Speaker 1: a lake house, a beach house, a mountain house, we've
Speaker 1: seen some uptick in the amount of supply, and perhaps
Speaker 1: in some areas prices have stopped going up, at least
Speaker 1: not going up as aggressively as they have been. But
Speaker 1: be aware it's very regional, it's very geographic specific. There
Speaker 1: is a demand for more of these properties, especially from
Speaker 1: millennials and soon gen z.
Speaker 3: Keep your eye on what's.
Speaker 1: Going on, get informed, and work with a local expert
Speaker 1: to help find your dream vacation property. I'm Barry Redolts,
Speaker 1: You're listening to Bloombergs at the Money