When your second home is the first you buy

Lillie Walsh Dudley and Andy Dudley wanted to be homeowners. The couple, who have a 5-year-old son, had been renting in the South Slope neighborhood in the New York City borough of Brooklyn since 2014. They began looking for something to buy about three years ago.

“Even though we’re not rolling in money, we had a little bit of savings,” said Lillie Walsh Dudley, 41, who works in book publishing, as does Andy Dudley, 45. Still, not enough to buy in Brooklyn. “Anything we could possibly afford would be a stretch and a downgrade from our rental.”

Then the pandemic hit, and their apartment suddenly felt small and the city itself felt claustrophobic. The couple decided to try another house hunt.

This time, instead of looking in Brooklyn, they looked farther out — much farther. Their plan: Keep their rental and buy a second home about three hours away in the Catskills. In August 2020, they paid $221,000 for a move-in ready, 100-year-old house in Roxbury, New York.

A growing number of first-time buyers are doing what the Dudleys did — purchasing a second home while renting their main residence. Though there isn’t data to track this trend, real estate agents and industry observers say a combination of rapidly rising home prices and pandemic workfrom-home flexibility has prompted some hopeful homeowners to skip the first step — owning a primary home — and go straight to buying a second home in a more affordable location.

Vacation home purchases in general boomed during the pandemic. In 2020, loan applications for vacation homes were up 30% from 2019, according to the most recently available data from the Home Mortgage Disclosure Act. Zillow, a real estate website, looked at homes for sale in vacation and weekend destinations, and in January 2019 one-quarter of those markets had more page views per home than typical markets. By January 2022, half of them did.

Historically low interest rates and an unpredictable stock market have made real estate an appealing investment category during the past few years, said

Richard Green, the director of the University of Southern California Lusk Center for Real Estate. But rapid price appreciation has put homeownership out of reach for buyers who don’t already have equity in the market or very high income, particularly in already-pricey metro areas like New York and Los Angeles.

Indeed first-time homeownership nationwide has been falling dramatically. In 2009, first-timers made up 45% of the homebuying market, but by January 2022 they represented just 27%, according to the National Association of Realtors. And with median home prices up 13.7% from a year ago, the challenges are mounting.

“Even if you’re being paid really well, accumulating a down payment for a million-dollar house is really hard,” Green said. “But you want to own somewhere, you want to get into the market.”

Which is why some first-timers are getting creative. Virginia Alber-Glanstaetten, 51, and Becky Goodman, 35, who are renters in the Dumbo neighborhood in Brooklyn, said COVID19-era lifestyle changes, including remote work, prompted them to buy their first home together near Provincetown, Massachusetts, where they have vacationed for years. Their budget of $800,000 for a primary home wouldn’t have gotten them much more space than they already had in Brooklyn, they said. But on Cape

Cod, where they bought, there were more options within their budget, which was about $600,000 after setting aside enough to keep paying rent in Brooklyn.

In March 2021, they paid $605,000 for a 220-yearold fixer-upper on 1.3 acres in North Truro, Massachusetts. “Everyone in my family thought I was insane and that it was the backward way of doing things,” said Goodman.

The home they bought had long ago been converted from a single family into three separate units, which was part of the appeal. The couple plans to stay in one of the units while renting out the others as investment income. With their jobs still partially remote, they have been spending weeks at a time in Cape Cod, while keeping their rental as a home base closer to friends and work.

The appeal of living in multiple places has grown in recent years with an increase in “nomadic” living, says Austin Allison, CEO and co-founder of Pacaso, a company that sells a fractional ownership model for second homes, allowing buyers to purchase a share of a home to use occasionally. “We see a growing cohort of people who might buy four shares of four homes around the world,” he said.

Some say it’s like having the best of both worlds. “The Cape Cod house has become this really beautiful escape,” said Goodman. “And we like having our resident footprint here in the city and doing the things we love here.”

Dylan Beaumont, 33, who owns a house in the Catskills and rents in Manhattan, put it this way: “If I’m up here for a week or a week and a half, it’s like, ‘I want to go to the city and get Thai food and see some friends,’ ” he said. “Then you get sick of the city, and you come up here and go hiking.” He and his fiancee, Susanah Zeffiro, 32, purchased in Margaretville, New York, in August 2020, pivoting from their original, pre-pandemic plan to buy a place in the city.

They paid $565,000 for the Catskills home and have spent more time there than they initially thought they would, with the prolonged nature of the pandemic. Beaumont and Zeffiro’s jobs in advertising are still partially remote, but they often have to meet with clients in the city or travel for work. “I love the balance,” Beaumont said.

Other first-timers are buying second homes now with the idea of moving into them later on. Jackie Puerta, a 48-year-old ultrasound technician who lives in North Bergen, New Jersey, said she became enamored with Miami in the ’80s watching “Miami Vice,” the TV show. Earlier this year, she bought a 16th-floor condo in Miami’s Edgewater neighborhood for $310,000. She spent the first few weeks staying at the condo on an air mattress. “Just to wake up to that view, it was all worth it,” she said.

Though her job is in

New York, she plans to move to Florida within the next two years. Until then, she’s renting the place to long-term tenants to cover her mortgage and other monthly expenses. “I’m very surprised that I pulled this off,” she said. “I always wanted to do it.”