Chartist: New York Post, Grant’s Interest Rate Observer

November 19, 2015 | 11:56 am | Charts |

If this market report slash appraisal thing doesn’t work out, I’ll go into graphic design with a focus on charts.

The New York Post asked me to whip up a chart for them. They change the fonts to make it theirs but hey, it’s fun. Oh yeah, the article was about living rent-free in NYC (but there’s a catch). Jim Grant of Grant’s Interest Rate Observer wrote a cover piece in his widely followed twice monthly newsletter subscription called “Too close to the sun” about the super luxury housing peak using my insights and a chart.

Ok, admittedly there is no real point to this post. I’m trying to convince myself to get back in the blogging groove, in addition to my weekly Housing Note.

New York Post version

My original version
[click to expand]

Grant’s IRO version

My original version
[click to expand]

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Better Than a Sex Scandal: Brooklyn Housing was #3 on the Bloomberg Terminals

October 8, 2015 | 9:53 pm | bloomberg_news_logo | Favorites |


The Bloomberg News story “Brooklyn Homes Sell at Record Pace in Outer-Borough Surge” was the 3rd most read story on the Bloomberg terminals world wide this afternoon.

Here’s the Douglas Elliman report.

The Brooklyn housing story in fact earned more reads than the Stanford Business School sex scandal, the Bill Gross $200M lawsuit against PIMCO and Deutsche Bank’s $7B loss this quarter.

After all, Brooklyn is now a global brand.

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Brooklyn, Queens Set Records, NYC rents jump, Westchester, Putnam and Dutchess Get Busy

October 8, 2015 | 9:05 pm | delogo | Reports |


We published a slew of research today for Douglas Elliman Real Estate:

Manhattan, Brooklyn & Queens Rentals

Manhattan Rentals - Median rental price increased year-over-year for the 18th consecutive month - Median rental price was third highest on record - Brisk employment growth and strong economic conditions kept upward pressure on rents - Mortgage lending conditions remained tight tipping would-be first-time buyers back into rental market - Strength at lower end of market remained as non-doorman rents rose faster than doorman rents - Luxury median rental price slipped, showing weakest conditions of all price segments - Inventory slipped and marketing time remained low, despite rise in vacancy rate

Brooklyn Rentals - Median rental price set a new record for third consecutive month - Median rental price exceeded the $3,000 threshold for first time - Landlord concessions remained at nominal level as inventory slipped - Rental price indicators moved higher across all size categories - Listing inventory as well as negotiability between landlords/tenants fell - Median Brooklyn rent was $288 less than Manhattan

Queens Rentals - Price indicators showed mixed results, suggesting general stability overall - Studios showed strong price growth as 1-bedrooms and 2-bedrooms were flat - New development market share comprised 30.2% of new rentals - Luxury market median price gain was modest, but exceeded the overall market - Median Queens rent was $362 less than Brooklyn and $650 less than Manhattan

Brooklyn Sales - Brooklyn median and average sales price set a new record - Brooklyn remains the only New York City borough with a median sales price above the pre-financial crisis high - Condo, co-op and 1-3 family properties set new median sales price record - Luxury housing prices followed overall market trend - Sales expanded as listing inventory declined, resulting in brisk market pace - Fastest marketing time in 8 years

Queens Sales - Queens median and average sales price set a new record - Condo median sales price set a record for second consecutive quarter - Co-op price indicators set new record - 1-3 Family price indicators set new record - Luxury price indicators set new record - Inventory declined as sales surged - Marketing time fell as negotiability expanded

Westchester County Sales (expanded) - Record number of sales for the quarter, based in historical back to 1981 - Fastest marketing time and least negotiability in the 5.5 years this metric has been measured - Listing inventory for all property types slipped from year ago levels - Absorption rate was fastest market pace in 15 years - Single family and condo median sales price indicated stability - Single family market share declined even though sales increased - Luxury price indicators slipped, out performed by overall market

Putnam/Dutchess County Sales (new)

Putnam County - Price trend indicators increased on a year over year basis - Listing inventory slipped as the number of sales surged - Based on absorption, the market pace was 17.2% faster than the year ago quarter - Marketing time and listing discount expanded despite faster market pace

Dutchess County - Price indicators suggested general stability - Single family prices edged higher as condo prices declined - The pace of the market slowed as sales declined and inventory expanded

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Multi-millionaire Motivational Speaker Dean Graziosi Shares His Appraisal Wisdom

October 4, 2015 | 4:40 pm | irslogo | Favorites |


Over the past few days I’ve been sent this blog post by a number of real estate appraisers who are upset with its derogatory reference to our profession. It was written by Dean Graziosi in the Huffington Post guest blogger section. I’ve never heard of him but perhaps that’s because I’m not a real estate agent. If you insert the word “scam” in your google search, there are a lot of additional insights that come up.

His Huffpost bio and web site indicates he is a NY Times Best Selling Author along with one of the top personal motivation and real estate trainers in the world. I also learned from his bio that he is a multi-millionaire, a guru in the personal motivation sector and cares deeply about his students. Translation: He basically teaches real estate agents how to sell.


Good. While it’s not my thing, I’m happy for Dean’s success (notice how his watch is strategically placed within his Facebook head shot as an indirect confirmation of his success) assuming no one was hurt. However as a public figure (as indicated on his Facebook page with 340K+ likes), Dean has a responsibility to convey information accurately to his students if he does indeed care.

While I doubt he wrote it it personally, his brand handlers managed to mischaracterize two key issues in a small blog post on HuffPost:

  1. Graziosi frames the current housing market as equal to the bubble’s peak but doesn’t accurately describe what that means.
  2. Graziosi frames the real estate appraiser as something other than a real estate professional while the real estate agent is a professional.

1. Housing Market

Graziosi cites the FHFA trend line as breaking even with the 2006 peak. Yes, based on FHFA methodology that’s certainly true and taken directly from the most recent FHFA report. I do feel the need to split hairs here since his “brushstroke style” of simplifying everything misaligns with reality. He says:

First, and most important, it requires repeat sales of homes, so if there aren’t huge numbers of sales, then we’re looking at a number derived from a small set of sales data. So, we’re not necessarily seeing an excited bunch of buyers flocking to the market. We are seeing a whole lot of homeowners who aren’t selling, waiting for rising values. So, we have a small inventory and competition for it.

The problem here is that there are a lot of sales outside of FHFA data – and FHFA only tracks mortgages that go through Fannie and Freddie. Roughly 30% of home sales are cash and another 5-10% of them are jumbo loans, too large to be purchased by the former GSEs – so they don’t get included. FHFA also excludes new construction.


The Case Shiller index is also a repeat sales index like FHFA but shows a different price point for the current market because it includes transactions outside of the GSE world.


If we look at the number of sales, which is the key point he makes, sales activity is low because we’re not necessarily seeing an excited bunch of buyers flocking to the market. But in reality, home sales are not low and they have been rising for 4 years. Of course sales are not at pre-crash highs because those highs were created largely by fraudulent lending practices including the unethical behavior of consumers caught up in the systemic breakdown that included nearly all particpants in the mortgage process.


Graziosi is right that inventory is low, but not because buyers aren’t flocking to the market – many buyers are being held back credit access has over-corrected. Many homeowners can’t qualify for the next purchase so there is no point of listing their home for sale.


Conclusion – we are not at the pre-Lehman market peak unless you only look through the eyes off FHFA, a distorted subset of the overall housing market. I would think that real estate gurus understand this.

2. Appraisal Industry

Let’s move on to the real reason I am writing this post.

I can ignore Graziosi’s “lite” market commentary but I can’t ignore his misunderstanding of the appraiser’s role in the purchase mortgage process (buyers applying for a mortgage to purchase a home.)

Don’t call an appraiser, as their approach to market value is different than that of a real estate professional. The real estate agent is trying to get you a sold price near to the top of the market, and their CMA, Comparative Market Analysis, is going to give you a pretty good idea of its value.

There is so much to talk about within these two sentences I’m not sure where to begin. It’s mindbogglingly simplistic, misleading and uninformed. Perhaps this is how he makes his students motivated?

Lets go for the big point first:

“Don’t call an appraiser, as their approach to market value is different than that of a real estate professional.” He must be thinking along the lines of the IRS definition, which is

To meet the IRS requirements, you need two things: spend the majority of your working time spent performing qualified real estate activities (regardless of what you do), and rack up at least 750 hours. Qualified activities include “develop, redevelop, construct, reconstruct, acquire, convert, rent, operate, manage, lease or sell” real estate.

Nary an appraisal-related definition within that list.

The problem with Graziosi’s communication skills as a best selling author and nationally renowned real estate guru who gives seminars for a living to communicate to his students (agents) how to succeed is – if we (appraisers) are not “real estate professionals” then it is a hop, skip and a jump to suggest we are “unprofessional” as if appraisers are something less than a real estate agent. Ask any consumer if they hold real estate agents in higher regard than real estate appraisers? In my view both industries don’t have sterling legacies but one isn’t more professional than another. Remember that he is used to speaking to his students who are real estate agents, the kind that sign up for this type of course. Promote BPOs and help agents get more listings – has got to be his recurring mantra.

The second issue with his quote concerning an appraiser’s value opinions – “their approach to market value is different” than a real estate agent. Providing an opinion of market value is likely the intention of both. Most real estate agents are hoping to get the listing and the appraiser is not incentivized by the home’s future sale. The agent may be the most knowledgeable person in the local market but there is an inherent potential conflict. Graziosi suggests that the broker will give you a price you want to hear. However I do like his idea of getting three broker opinions – that’s a very common practice – nothing new there. Ironically both an agent and an appraiser are looking at closed sales, contracts and listings but the appraiser doesn’t have an inherent conflict. They aren’t going to get the listing no matter how accurate their value opinion proves to be.

One problem with today’s appraiser stereotype as this column brings out indirectly, is that bank appraisers now generally work for appraisal management companies (probably about 90%) and the best appraisers tend to avoid or perform minimal AMC work because they can’t work for half the market rate. As a result, good appraisers aren’t necessarily known as well by the brokerage community as in years passed unless they get in front of the brokerage community in other ways, like giving seminars, public speaking, etc. Competent brokers within a market will know who the competent appraisers are.

There are unprofessional professionals in every industry – doctors, lawyers, deepwater diving arc welders and farmers, so please don’t make sweeping pronouncements to the contrary – especially if you are in the business of communicating information to “real estate professionals”.


The real estate appraisal industry is not unprofessional
IRS definition aside, real estate appraisers are real estate professionals

As I’ve walked through this response, I realized that the silly advice blog post in the Huffington Post by an infomercial guy did what it intended, stir up conversations of any type to get his name out there when his actual content was devoid of useful information. There is a great post I stumbled on the industry of motivational speakers: Real Estate B.S. Artist Detection Checklist. Worth a read.

Looks like I’m never going to be a multi-millionaire wearing a huge watch strategically placed in my head shot. If you notice my own head shot in the righthand column, my watch is very small.


UPDATE From the I have no idea for whom the appraisal is being performed but I am a 20+ year real estate professional (see definition above) department: Here’s an article from the Santa Fe New Mexican “Be cautious of appraisals” that damns appraisers using a stunning lack of understanding of the appraiser’s role in the mortgage process given his experience. This piece was written by a mortgage broker who was also a former financial consultant and real estate agent. The author states:

Everyone in every business falls under some measure of accountability. Certainly appraisers must also be accountable to their customer. The customer is the homeowner, not the AMC.

No it isn’t.

The appraiser’s client in the mortgage appraisal situation you describe is not the homeowner. The AMC is acting as an agent for the lender in order to for the lender to make an informed decision on the collateral (of course that’s only a concept). The appraiser is working for the AMC (who works for the lender) and not for your homeowner. Your logic from the housing bubble still sits with you today.

Yes I agree that the quality of AMC appraisals for banks generally stinks, but blame the banks for that, not the appraisers. Quality issues don’t change who the appraiser is working for. AMCs do internal reviews and make ‘good’ appraiser’s lives a living hell for half the prevailing market rate loaded with silly review questions by 19 year olds chewing gum to justify their own institution’s reason for existence. No wonder you are frustrated with appraisers from AMCs. ‘Good’ appraisal firms like mine avoid working for AMCs whenever possible. Yes I would be frustrated as a mortgage broker today because your industry got used to using appraisers as “deal enablers” during the bubble and nothing more. I contend that the current mortgage process post-Dodd Frank is clearly terrible and AMCs are a big part of the problem.

ASIDE This new era of online journalism for print stalwarts like the “Santa Fe New Mexican” and new versions like the “HuffPost” rely on filler-like the above 2 articles discussed here. Very sad.

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Miller Samuel turned 29 today

October 1, 2015 | 2:43 pm | Milestones |


Hard to believe we’ve been around so long.

I personally feel about 29 years old (maturity of a 19 year old, obviously) yet after we published our Manhattan report today that cited 26 year record highs, the math places me a bit older than 29. My birthday was yesterday (I’m still milking that day for all I can) and our company’s birthday is today. We launched in 1986, working in our apartments and communicating via fax machines, buying Macintosh Plus computers, creating our own appraisal software, using bar code scanners, Scantron readers, tape measures, measuring wheels, sonic measuring devices, laser measuring devices and beepers. It’s been a surprisingly fun but difficult journey.

Manhattan Report 3Q15 Just Published

October 1, 2015 | 8:06 am | delogo | Reports |


The Elliman Report: Manhattan Sales 3Q-2015 we author on behalf of Douglas Elliman Real Estate was published today. It’s part of our report series that has been expanding since 1994.

Here’s a brief summary but I’ll provide a more thorough explanation of the results in tomorrow’s Housing Notes (don’t just stare blankly at the screen, please sign up for my free weekly newsletter here.)

  • Median sales price was second highest on record, highest since 2008
  • PPSF set 26 year record of $1,497 per sqft
  • Year-over-year sales increased for first time in a year as pent-up demand from financial crisis has been fully absorbed
  • Listing inventory growth stalled in 2015 after bottoming at the end of 2013
  • 51% of all sales were cash purchases, up from 43% a year ago
  • 53.9% of all sales were “at or above” list price at time of contract, a seven year record
  • Luxury housing prices did not see the same growth as overall market
  • Days on market was lowest (fastest) in 15 years at an average of 73 days
  • Larger price gains seen in larger apartments such as 2, 3, 4 bedrooms than studios – 1 bedrooms
  • New development market share of closed sales continued to rise

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Podcast: My Port Authority of NY & NJ Interview on Regional Housing Market

September 24, 2015 | 12:16 pm | Podcasts |


A few days ago I was interviewed by Christopher Eshleman at the Port Authority of New York & New Jersey. He works for Alexander Heil who is the chief economist and publishes a lot of great regional economic insights. Although this is a new effort, this was their first podcast conducted outside of the institution so I am deeply appreciative of the opportunity to share my views.

Christopher is a sharp guy and kept the conversation interesting (I even inserted a Jerry Seinfeld joke). It’s about a half an hour.

Check it out.

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The Big Short: The Movie Coming this December

September 23, 2015 | 11:37 am |

Coming to a theatre near you in December…

Aside from playing my favorite Led Zeppelin song “When the Levee Breaks” and being based on one of my favorite books about the housing bust/financial crisis “The Big Short” that was written by one of my favorite authors Michael Lewis (Blind Side, Flash Boys, Moneyball, Liar’s Poker, The New New Thing, etc.) that includes pretty much all my favorite actors – it’s a freakin’ incredible story.

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Manhattan Monthly Absorption Rate – August 2015

September 22, 2015 | 2:07 pm | Charts |

8-2015Manhattan [click to expand]

Thoughts The co-op and condo market absorption rates for the $10 million+ market have slowed over the past year while the pace of the sub-$3 million remains extremely brisk. The $3 million to $10 million shows limited change and some stabilization.

Side by side Manhattan regional comparison:

August 2015 v August 2014
8-20158-2014 [click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. (I got tired of the red/gray look in 2014 so I changed it) The blue/red line shows the 10-year quarterly average for context. The pink/orange line represents the overall average absorption rate of the most recently completed month for that market area.

Definition Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the current annualized pace of sales activity in our market report series.

Manhattan Market Absorption Charts [Miller Samuel]

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[VIDEO] Boomberg Radio/TV ‘Surveillance’ 9-21-15

September 21, 2015 | 11:45 am | Radio |

I was set to speak in studio with Tom Keene and Pimm Fox but had a commuting snafu and had to call in. It was a great opportunity to show a picture of me as a 15 year old. Love these guys. The best. The Bloomberg Television/Radio are clearly pros and handled the last minute change with ease.

We talked about lots of housing markets and the distortion being created by credit conditions.

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[Infographic] NAR gets into the Urbanization Conversation

September 1, 2015 | 10:12 am | trulialogo | Infographics |

The National Association of Realtors, who is generally viewed as emphasizing suburban single family housing markets, may be plotting a new course. NAR will be sharing more releases on the topic of urbanization in the coming months. They look to be taking the same path as, the online entity who licenses their name from the NAR mothership. has cleaned up their act and has been much more focused on city life after their recent purchase by News Corp (through’s parent company Move), trying to become relevant again by emulating Zillow and Trulia. And of course, the consumer wins.

It’s a good thing too since urbanization is one of the most important housing trends (affordability aside) facing the housing market going forward.

Here’s an interesting infographic released by NAR today:


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[Three Cents Worth #291 Ski] Aspen Sales at $10 Million and Above Stay Consistent

August 31, 2015 | 6:19 pm | curbed | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski. Whether I’m on the trail, on the lift or in the lodge, I’m always taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

Over the last decade, sales of high end Aspen residential properties have followed a logical flow, consistent with the overall U.S. housing market. Activity peaking in 2006; extinguished with the Lehman Brothers collapse in 2008; weakness in 2011; showing elevated levels over the past year; all tell the national real estate story. And recently…

[click to expand chart]

Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami
Three Cents Worth Archive Curbed Hamptons
Three Cents Worth Archive Curbed LA
Three Cents Worth Archive Curbed Ski

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