Explainer: Three Ways to Look at S&P/Case-Shiller Index Results

August 25, 2015 | 2:00 pm | Charts |

I have a long history of dissing the relevance of the S&P/Case Shiller Index because of the 6 month lag and the slew of anecdotal link-the-dot official commentary associated with it that literally has nothing to do with the numbers generated (gasping for air). However I feel compelled to look at it periodically because it is part of the media’s monthly market report gauntlet.

The S&P/Case-Shiller Home Price Indices were published today so I thought I’d create a trifecta of ways to look at the same data.

Top Chart – This is the famous year-over-year % change view which I believe is the best way to look at the market and the scariest. They use the seasonally adjusted index and the non-seasonally adjusted index (so did I) but there is virtually no difference. Most news coverage of the index usually link to the press release which embeds this type of chart that uses all the broad indices: 10-city, 20-city and National. The 20-City has long been the primary index that was touted but the references in the media are shifting to the national index and that’s probably a good thing.

Middle Chart - This is the month over month version using the same data. Clearly the seasonal adjustment smooths out the line. However the non-seasonally adjusted versions shows a significant impact from the seasonal nature of real estate – in fact this chart shows that seasonal patterns are becoming more extreme since the financial crisis began. Originally the index was virtually all about the month over month results even though the featured chart was year-over-year. They have since moved year-over-year to the front of the press release and has already influenced the way the index is presented in the media which is good to see.

Bottom Chart - This is the only chart that uses the actual index numbers rather than percentages. It’s a sleepy pattern that seems to wash out seasonality a bit and shows the market in a less intimidating way. Ironically, the actual index trend is visually less interesting. Seems ironic.

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Top 10 Manhattan Apartment Super Talls, 2 are in Hudson Yards

August 23, 2015 | 7:45 pm | crainslogo |

Crain’s 2015 annual analysis of a wide range of NYC data is worth a look. Get to know the biggest city in the U.S.

Top 10 Manhattan Residential Tallest Towers

manhattantop10sCNY

Affordable Housing Units Built

DeBlasio administrations meets it’s annual goal of building 8,000 annual affordable housing units – the highest total ever tracked (began in 2008).

affordableCrains8-2015

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[Three Cents Worth #290 NY] Tracking 24 Years of Manhattan Sales and Rental Prices

August 23, 2015 | 6:09 pm | curbed | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

It’s been a while since I dropped in on Curbed with a Three Cents Worth post but since I’m currently huddled next to an air conditioner, I really needed to take my mind off the heat and humidity. I thought I’d reach back into history and trend the year-over-year changes in the Manhattan sales and rental markets. I presented the median rental price and median sales prices by quarter back to 1991 measuring their year over year percent change. I’m surprised I haven’t done this before since there is so much discussion about the relationship between the two markets, and whether it’s better to rent or buy…

3cw8-19-2015

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My latest Three Cents Worth column: Three Cents Worth: Tracking 24 Years of Manhattan Sales and Rental Prices [Curbed]

Three Cents Worth Archive Curbed NY
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Three Cents Worth Archive Curbed Hamptons
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Most NYC building permits since ’63 – Brooklyn nearly equals rest of city

July 30, 2015 | 10:20 am | wsjlogo |

WSJnycpermits7-30
Source: WSJ

Yesterday evening Josh Barbanel at WSJ posted a milestone piece on the current building boom: Construction in New York City Goes Through The Roof: New residential permits surge as developers rush to qualify for tax break

There has been an incredible surge in NYC residential building permits, the most in more than 50 years. It’s amazing to see the Brooklyn permit total nearly reach the total of remainder of the city tallied together.

New York City is entering what could be the biggest building boom in a generation, census figures show, as work gets under way on hundreds of residential projects in neighborhoods across the city. In the first six months of the year, developers received new residential building permits for 42,088 apartments and houses in the city, according to the U.S. Census Bureau, already more than in any full year since 1963, when nearly 50,000 permits were issued.

While permit numbers don’t translate directly to what will actually get built, it is clearly a sign of a significant pipeline in the making.

Reasons?

  • Expiring tax abatement program encouraged developers rush in and start foundation work by June 15
  • Alternative financing around the globe chasing higher returns that low rates can’t deliver
  • Little regulatory oversight because of Dodd-Frank bogging down traditional commercial lenders
  • Significant pent-up demand from 2008-2012 unleashed on the market
  • Improving economy with near record employment growth

UPDATE – I neglected to be more clear and say that this surge will likely collapse in the near future, since the jump in permits is likely to be wildly exaggerated as a result of the first reason above.

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An Honest Appraisal – Some Personal Background Including My Favorite Color and Love of Yo-Yos

July 30, 2015 | 9:59 am | Articles |

A while back, Kim Velsey at New York Observer reached out and thought it would be interesting to do a profile on me. Who wouldn’t like to talk about themselves for hours? What an opportunity! LOL. Uh, Yes?

We met and she proceeded to “drain my soul” as I am fond of saying – by the end of the interview my head was spinning and I wasn’t quite sure what I had said or if I would look foolish (the sign of a good interviewer). I was also getting a little worried when I started hearing through the grapevine who she was reaching out to – in other words this was an actual, real interview profile thing!

It turned out to be a fun, extensive and detailed read that captured a very fair and accurate picture of me for which I am very grateful (and relieved).

Jonathan Miller Is the Most Trusted (and Quoted) Man in New York Real Estate
An Honest Appraisal by Kim Velsey July 29, 2015

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Photo credit: New York Observer

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[VIDEO] Boomberg TV ‘Market Makers’ 7-27-15

July 27, 2015 | 10:49 pm | Reports |

Had a nice conversion this morning with Matt Miller and Stephanie Ruhle on Bloomberg TV’s ‘Market Makers.’ Never been on this show before. Wow. Energy+.

Before the show started, we had a active debate on whether ‘American Flyers‘ or ‘Breaking Away‘ was the best bicycling movie. Clearly ‘Breaking Away” was the better of the two HANDS DOWN but I liked the other a lot, especially for someone who likes the whole culture of bike racing. Not sure what bike movies had to do with our ‘state of the Hamptons market’ discussion covering our Hamptons market report for Douglas Elliman, but hey, it was obviously more important to settle the bike movie issue first.

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[VIDEO] Fox Business ‘Risk & Reward’ w/Deirdre Bolton 7-27-15

July 27, 2015 | 10:22 pm | TV, Videos |

Always great to swing by and speak with Deirdre Bolton on her Fox Business show “Risk & Reward.” However today’s show was a bit of a mess for me. Working on 4.5 hours of sleep I said I was talking about “interest-free” then changed it to “principal-free” mortgages – LOL – good grief! Note to self: “interest-only.” Plus my company name was reversed 2x and the chyron had it backwards as well. Didn’t discourage me though – always fun to do the show.

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[Video] Ladies and Gentlemen, We Apologize For The Unavoidable Delay…

July 19, 2015 | 11:56 am |

I’ve been interviewed by Charlie Pellet of Bloomberg Radio a few times and have thought to myself, “His voice sounds really familiar.” Here’s this short video from The New Yorker that shows why.

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Will London (or any large city) Become a Bad Version of Dubai?

July 15, 2015 | 2:24 pm |

Dubaization Defined.

This video is an epic condemnation of the new wave of architecture associated with super luxury housing that is redefining the London skyline presented by – The Guardian.

Alain de Botton goes full on, providing heavy criticism that is well worth watching for the answer to the question: Why we are seeing the super luxury/starchitect phenomenon occur?

But the rest of the piece slips into full scale whining.

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Rotating GIFs: Cost of Land Is The Secret to Affordable Housing

July 14, 2015 | 4:48 pm |

Here’s a cool rotating gif map on rising U.S. land prices based on data taken from the Lincoln Institute of Land Policy (in partnership with University of Wisconsin-Madison).

I’ve used their data for my Bloomberg View column talking about the price of land. In short, the land is what appreciates, not the improvements to the land such as the house itself. The price of land is a key issue in the U.S. affordable housing crisis we are now experiencing.

Here’s a 40 year view on the price of land for residential development provided by Howmuch.net


Source: Howmuch.net

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Fed Charts: How are the Housing Fundamentals Doing?

July 13, 2015 | 11:22 am | fedny |

The New York Fed just put out an economic recap of the U.S. economy that is chock full of charts and data.

NYC employment growth is strong…

7-13-2015NYFedregionalempl

But nationally, unemployment is falling but those being counted on the roles are falling…

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Housing starts have ramped up but most is multi-family – driven by freakin’ high rents.

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New single family home sales are lagging existing home sales (see chart above)…

7-13-2015newexisthomesNYFED

And we wonder why the economy doesn’t feels so good…anemic wage growth…

7-13-2015hourlywageNYFED

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Record Queens Condo Prices: Bigger Than Crises in Greece, China

July 9, 2015 | 9:51 pm | delogo |

Rental_0615Douglas Elliman published our research today covering Queens sales, Brooklyn sales Westchester/Putnam sales as well as the rental market for Manhattan Brooklyn & Queens. You can download the reports and more at Douglas Elliman’s market report page.

Like last week’s Manhattan report, there were lots of records set and it wasn’t simply the influence of high end sales – prices were up across the board in most markets.

Incidentally, the Bloomberg News article that covered record Queens condo sales was the second most emailed story world-wide. It stoked more interest than the finance crisis in Greece and the recent Chinese stock market gyrations. Apparently only “investors with satellites” was a more popular read.

Idea (?) for next quarter: Talk about drones and investors in the Queens housing market.

2q15queensrptBLOOMBERGTERMINALS

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