Matrix Blog

New York City

Nathan Pyle’s NYC Basic Tips and Etiquette Book Now Available!

April 16, 2014 | 11:13 pm | Favorites |

SMALL_COVER_d My friend Nathan Pyle has penned a book: NYC Basic Tips and Etiquette that should be required reading, well at least required viewing for:

  • anyone living in NYC, or
  • anyone planning to visit NYC, or
  • anyone who’s ever read anything about NYC, or
  • anyone who hasn’t thought about going to NYC someday, or
  • anyone not planning to visit NYC, or
  • anyone who’s never read anything about NYC, or
  • well, anyone.

You get what I mean. This book is clearly for everyone.

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You can check it on on his Facebook page or actually buy it on Amazon.

He’s come a long way from making selfie-videos of his basketball dunking prowess. I’ve long been a fan of his art. Nathan combines nice Midwestern sensibilities (he’s from Ohio) with street smarts, artistic talent and a dab of humor.

In fact Nathan’s only shortcoming is his siding with the “GIF” (Graphics Interchange Format) pronunciation camp while I am squarely in the “Sounds like “Jif” as in the peanut butter AND confirmed by the inventor of the “GIF” camp who said, and I quote:

“It’s pronounced JIF, not GIF.”

And the word is getting out, in newspapers, an AMA on Reddit on radio/podcast, etc.

Here are a few samples, I plan to revisit his artwork over the next few weeks. The book even provides instructions on where to eat pizza on a busy sidewalk!!! C’mon people, the value add for that alone is worth well above the very modest price! Here are a few samples…

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With Mortgage Lending Historically Tight, Renters Suffer Just As Much

April 15, 2014 | 4:19 pm | nytlogo |

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There was a good article in the New York Times yesterday: In Many Cities, Rent Is Rising Out of Reach of Middle Class

Many have complained about the Federal Government’s (and our society’s) overselling of homeownership over the past decade and how the decline in homeownership will eventually lead to an emphasis on rentals in the US. Of course, like many housing market ideas, good and bad, they tend to be presented in a vacuum, without real context.

I believe much of this discourse is in reaction to tight credit combined with a weak economy rather than some sort of fundamental cultural and economic shift. During the bubble we got the opposite discourse – that there was a fundamental cultural and economic shift towards homeownership.

Currently there is a much smaller subset of Americans that have access to financing. According to the Federal Reserve Senior Loan Officer Survey, lending has actually tightened in 2014 over 2013 (related to QM). Many homeowners are unable to sell because they can no longer buy and many renters no longer qualify for financing so the idea of of homeownership as a goal fades.

Case in point has been the recent public discourse on the issue of home affordability, whether it be sales or rentals. Zillow presented an analysis for the New York Times that illustrates how much rents have risen in the past 13 years (since 2000) in cities across the US.

Here’s the scenario:

The economy is weak – we are seeing tepid growth in employment, stagnant incomes and historically tight residential mortgage lending.

  • Approximately 38% of homeowners can’t buy their next home so they won’t list their home for sale.
  • Buyers without credit issues won’t list their homes until they can find something to buy.
  • The lack of supply presses prices higher because those who have access to credit have little inventory to choose from, driving up prices.
  • Renters looking to buy can’t find a home they want to purchase so they are kept in the rental market.
  • Renters looking to buy don’t qualify for a mortgage so they stay in the rental market.

The organic flow out of the rental market into the sales market is slowed and a log jam is created of too many renters and not enough buyers.

Rising rents against stagnant incomes creates an affordability crisis. The sales and rental markets are connected. They are not mutually exclusive.

Rising rents are a product of tight credit, which is a residual byproduct of the financial crisis. Fix the economy and credit eases, then lending normalizes (no, not circa ’06) and the pressure on rental housing is eased.

ASIDE I’m not entirely confident with the reliability of the historical rental data being presented to the New York Times by Zillow – but I still agree that affordability is being pressured:
- Zillow was launched circa 2006 and rents are not public record so the early data has to be super thin.
- The comparison was made between a first quarter (low) and a third quarter (high) in a highly seasonal market.
- I am not sure if “New York” means Manhattan or New York City. If it is Manhattan, then our median rent figure in 1Q 2000 was $2,600 in nominal terms, and $4,276 in real terms. In nominal (unadjusted for inflation) terms, rents have risen 23.1% through 3Q 2013 while real median rent has fallen 27.3%. The Zillow median rent as share of median income nearly doubled, rising from 23.7% to 39.5%. Either incomes have collapsed in NYC or the 2000 rental figure being punched into their model is flawed, ie way low, no?

Other inights on any of this would be appreciated.

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Why I Love New York, Notify NYC Edition

March 26, 2014 | 1:57 pm |

notifynyc-logo
[click to open Notify NYC web site.]

NYC is never boring.

From: Notify NYC
Subject: Notify NYC – Notification
Date: March 26, 2014 at 1:11:07 PM EDT
To: Jonathan Miller

Notification issued 3/26/14 at 1:09 PM. On Thursday, March 27, the filming of a TV series will simulate the aftermath of a crime scene throughout the day in the vicinity of Sixth Ave between West 30th and West 31st Street in Manhattan. Included in the simulated activity will be emergency response vehicles and actors dressed as law enforcement officers interacting with the PATH train entrance. NYPD will be on site.

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NY Fed: New York City and State Expanding at “Brisk Pace”

March 21, 2014 | 5:03 pm | fedny |

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[click to view report]

The Federal Reserve Bank of New York uses a coincident index to track the New York, New Jersey and New York City economies.

They define a coincident index as:

“A coincident index is a single summary statistic that tracks the current state of the economy. “

The Fed results share no analysis but state:

Our Indexes of Coincident Economic Indicators (CEI) for January show economic activity expanded at a brisk pace in New York State and New York City, but was essentially flat in New Jersey.

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Talking Interest Rates, Housing on Bloomberg TV’s ‘Surveillance’

March 20, 2014 | 8:33 am | bloomberglogo | Videos |

Had a great conversation with Tom Keene, Scarlet Fu, Olivia Sterns and guest host Strategas Research Chief Investment Strategist Jason Trennert about the US housing market. We also dabbled a bit in Brooklyn and Manhattan rents and talked NCAA March Madness picks. Always fun to come in and join the Surveillance team.

Go MSU Spartans! Go State!

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[Infographic] New York City’s Aging Infrastructure

March 18, 2014 | 3:29 pm |

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[click to expand]

The Center for an Urban Future, a NYC-based think tank, just published a sobering summary of New York City’s aging infrastructure. You can download the report. Here is the report author’s editorial in Time Magazine.

The NYC real estate economy is dependent on the quality of services offered by the city. One of the unsung reason for NYC’s active NYC housing market began in the early 1990s when the “broken windows theory” was widely adopted as a policy strategy. It worked. I lived through it and saw the city transition.

Now we have bigger windows to fix.

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Bonus for NYC Housing: Wall Street Comp Up 15.1%, Most Cash Paid Out Since ’08 Crash

March 17, 2014 | 7:00 am | Charts |

The annual release by the New York State Office of Comptroller brought upbeat news to the real estate economy in NYC. Wall Street compensation has long accounted for roughly a quarter of personal income but only 5% of employment so the industry remains very important to NYC’s tax revenues. Here are some of the key points:

  • The overall bonus pool and bonus per person increased 15.1%.
  • The total bonus pool was
  • Bonus pool is up 44% in past 2 years.
  • Securities employment is down 12.6% from before the 2008 market crash.
  • Wall Street accounts for 8.5% of NYC tax revenue and 16% of NYS tax revenue
  • Part of the rise was due to payouts of deferred compensation from prior years.

Here are a few charts that layout the bonus trends in NYC. Wall Street is a key economic driver of NYC and therefore important to the health of the NYC housing market.

Wall Street compensation is 5x that of mere mortals (other private employment compensation) and that ratio has stabilized after a modest correction following the 2008 stock market crash.
2013nycsecuritiesbonus
[click to expand]

Wall Street bonuses rose steadily as a portion of total compensation but after the 2008 stock market correction and financial reform, the market share fell – but not as much as perceived.
2013nycsecuritiescompasperc
[click to expand]

Wall Street employment has fallen since 2008, but not nearly as much as expected. The market share of Wall Street NYC employment has slipped as a result.
2013nycwallstreetemployment
[click to expand]

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Safety First: Explaining Flood of Asian Investors Into Western Real Estate

March 15, 2014 | 12:50 pm | kflogo |

This is a good interview with Alistair Elliott, senior partner and chairman at Knight Frank by Josh Noble of FT about the buying binge of Asian investors in many major global cities like London, Vancouver, Sydney and New York City…”mature financial cities.”

Institutional investors come first, then developers and then private investors. The phenomenon is at it’s very early stages.

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NYC Construction Permits Surge, But Still Remain Below Population Growth

March 5, 2014 | 9:00 am | crainslogo |

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Joe Anuta at Crain’s New York Business lays out the permit situation for building construction, which reached 18,000 units in 2013.

Citywide, 2013′s figure is still shy of the 20,000 units the congress estimates developers need to build annually simply to keep up with the growth of the number of households, to replace outdated buildings and to provide housing options for New Yorkers across the income spectrum.

With all the construction going on right now, it isn’t enough to:

  1. Keep pace with population growth.
  2. Help lower the cost of housing by creating abundant supply.

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[Miller Cicero] 1Q 09 Manhattan Building Sales Report Is Available For Download

May 22, 2009 | 5:57 pm | Reports |

Our commercial advisory firm just released the Manhattan Building Sales Report prepared in conjunction with Massey Knakal, a leading commercial real estate brokerage firm.

My commercial valuation partner John Cicero, MAI in our firm Miller Cicero oversees the report preparation. The report is the only one of its kind that tracks cap rates, income multipliers, price per square foot and number of sales.

The format has changed to quarterly and the expanding series will be more borough-specific.

An excerpt:

The first quarter of 2009 property sales market in Manhattan is characterized by a dramatic slowdown in sales activity. This is the first period tracked that truly reflects the market mentality created in September 2008 with the collapse of Lehman Brothers, the federal bailouts of AIG, Fannie Mae and Freddie Mac, and the ensuing paralysis of the credit markets throughout the fall. (In contrast, our last market report for the second half of 2008 included numerous sales that were negotiated pre- September)…

Massey Knakal will distribute nearly 300,000 hard copies of the report over the next few months.

Massey Knakal Manhattan Building Sales Report [1Q09]

Report Methodology [Miller Cicero]


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