July 21, 2017

Forget Mansions, Homebuyers Really Want Yurt Mentions In Their Infographics

I should have titled this week’s Housing Notes as “readers like housing infographics because there is little thinking needed.” I’ve always seen infographics as a way to “cheat” social media with some sort of shiny filler content that makes it look like there was a thoughtful effort made. We are never told who specifically created the infographic and we assume the content creator accurately conveyed the information or had a strong artistic sense of nuance to properly convey it. In other words, I see them as one step removed (or diluted) from the source info. An emulator of sorts. I’m probably too cynical over this type of medium, but let’s talk ‘Yurts.”

Because readers of Housing Notes obsess about all things real estate, Chase Home Lending worked with Google and found that the second highest housing style people search for are Yurts. It’s on the internet so it must be true. In related news, Chase Home Lending, a subsidiary of America’s largest bank, whose CEO Jamie Dimon went berserk this week was really referring to our love of Yurts memorialized in infographics. Skip to the middle.

but I digress…

Week 3 of Q2 Housing Market Report Gauntlet [CT & SoFL Edition]

Douglas Elliman published my firm’s research on the Connecticut markets of Greenwich and Fairfield County, as well as their South Florida foot print of Miami (Beach and Mainland), Boca Raton, Fort Lauderdale, Palm Beach, Wellington, Delray Beach and Jupiter/Palm Beach Gardens. I’ve been the author of this growing Elliman report series since 1994.

Greenwich, Connecticut continued to show improvement, largely because high-end sellers, after a decade of being disconnected with value and holding on to the Wall Street boom times that created the market, pre-housing bubble, are capitulating. And Wall Streeters are interested in the topic as the Bloomberg story on the topic that included our findings was the 7th most read and 5th most emailed story on the Bloomberg Terminals world wide.


Luxury Greenwich inventory is falling, and that’s good for the health of the market in the long run. Sellers that wildly overpriced are letting their listings expire or are coming way down to meet the seller:

The Bloomberg piece notes:

Among properties that sold in the quarter was an 8,535-square-foot (793-square-meter), six-bedroom home on Khakum Wood Road that had been on the market since 2008. Back then, the home, on 2 acres (0.8 hectares) with a pool, was listed for $14.5 million and didn’t sell, according to Greenwich’s property listing service. It returned to the market several times since — at $9.975 million, $7.645 million and, most recently, $6.65 million.

The home finally sold in April for $5.8 million, or 60 percent less than its 2008 price.

South Florida

Douglas Elliman published 8 South Florida market reports I authored this week that shows all markets are in generally better shape than last year and some are standouts. Most markets remain “softer at the top” but the remainder, especially moving towards lower price points, are moving very quickly.

The links to all the market reports can be found below. Their press release presents the highlights for each of the markets.

Kale salad on rooftops and the NYC Housing Market

I had a fun and spirited discussion with Tom Keene and David Gura on Bloomberg Radio about a little bit of everything, namely NYC and national housing along with kale salad as I fought off a cough.

I’m the middle interview and it starts around 29:00.

NAR says foreign buyer purchases jumped nearly 50% to new record

Canadian and Chinese buyers were key factor per WSJ.

Here are a series of quotes from the COO of Juwai, the top Chinese international property portal, on the report:

In 2016 Chinese investment in international and U.S. real estate hit a historic high. While we think the dollar amount is likely to decline somewhat this year, investment levels are still in the foothills of this mountain range. There are higher peaks ahead.

This year, international real estate investment will be down at least 10% from 2016, according to present trends.

Chinese buyers trust the American market and believe it is a long-term safe bet. The US is also the most popular destination for Chinese immigrants, students, and corporate investment. All of these factors drive property acquisitions.

After the United States, the top destinations for Chinese investment are Australia, Thailand, Canada and the UK.

While I don’t question the large influx of foreign buyers this year, I suspect the jump is not as large as this as evidenced by the lack of New York representation as a top 5 state. This is because NAR has little membership or access to information in Manhattan – characterized by the highest housing prices in the U.S. and a very heavy concentration of Chinese buyers. If NAR had Manhattan access, last year would be higher than this year. That would have the affect of lowering the U.S. year over year change.

Too soon for any kind of housing reform

There’s a great article from PIMCO on the problem with housing finance right now. This has always been my key view:

We believe the decline is directly related to the inability of many quality borrowers (those who have consistently paid their bills and have the financial means to borrow) to access mortgage credit. While many people expected – and desired – a retrenchment in mortgage credit after the frothy days of 2005–2007, many quality borrowers are still unable to secure a mortgage nearly nine years after the financial crisis.

Here’s what Matt Klein of BV called out on twitter as critical. I agree.

Free parking isn’t free

I continue to be obsessed with this topic of how free parking is not free for cities and suburbs and stifles their growth. Here’s a good Vox video on the topic:

Housing sold separately from land

Like children’s toys, the batteries that make them work are often sold separately. Ardell DellaLoggia, Seattle area Realtor, prolific blogger, Quora question answerer and one of my favorite people online, shares this on her Facebook page.

New development marketing groups play musical chairs

In soft housing markets (NYC high end) with new development projects that have a pricing disconnect with actual conditions, we tend to see a lot more turnover of new development marketing groups. Just like an individual home seller anchored to a higher list price than their market can bear, there is a period of mourning a seller must go through until they face the reality that the pricing isn’t right.

I am noticing a lot more NYC new dev marketing group turnover these days as developers are coming to the end of this mourning period that began in late 2014/early 2015. Sure, marketing skills are important to the success of a new project, but if the pricing is out of whack, there isn’t much that can be done unless you can wait for the next cycle to appear.

Diners RULE in my book

This is a quasi-housing market-related topic. I love diners. One of the first things my wife and I did when we arrived in Manhattan was go to the Cosmic coffee shop just off of Columbus Circle and have breakfast. City life was a lot grittier back then, especially the subways. It was early in the morning and the waiter came up to us, with a half unbuttoned short and barked, “what do you want?” Having just arrived from the midwest, we stumbled through our order but noticed he wasn’t writing anything down. The food came back to us in 5 minutes and was perfectly prepared. I was hooked. During my 31 year career as an appraiser, I constantly sought out old diners and coffee shops for breakfast and lunch – knowing their days were numbered as rents seemed to rise faster than inflation. Cosmic is gone and I have lost some others but I feel I am biding my time. New old-style diners are off limits to me. I want to sit at the worn Formica counter and hear the waiter yell to the cook, “whiskey down, burn it!” You can’t get much more New York than that.


Since I released 10 market research pieces this week I have been slow to return phone calls and emails from my appraiser colleagues – my apologies. I have 5 more this week and then life is back to normal. So I’m a little light on granular this week.

Surveys Can Be Useful or a Complete Waste of Time

[Surveys] can be very helpful in determining what people are really thinking about. They can also be a tool to placate angry customers to feign some sort of future action on the existing problems. Next week I’ll share the questions presented by AI National from their “McKinley” survey to those that weren’t sent one.

It is hard not to be cynical these days but my assumption is that this survey was done to fog the upcoming governance action in which AI National seemingly plans to drop chapters regions and the “taking” that caused an uproar last fall.

[Evaluations] as an appraisal issue is dead but AI National keeps it on life support. I know of senior AI people reaching out to thought leaders outside AI about how wonderful it is to have the option of doing $25 evaluations. They still don’t grasp how badly this will confuse the marketplace with infinite multiple standards across the 50 states and beyond. It’s very sad.

[Conclusion] I believe we are very close to the point where AI National actions can be ignored and we can focus on real issues that will impact the future of the appraisal industry. Their membership is now very much on top of what they are doing. I just don’t want AI National to be a distraction anymore in our fight against misinformation and our industry’s survival.

Rural appraisal bill is believed to be DOA

I heard from a reliable source that the proposed appraisal bill in this article that would impact rural appraisers was DOA.

Housingwire Webinar Redux

If you’re not busy, join us on July 26th.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll watch Big Bird do a Beastie Boys song, you’ll learn not to eat on planes and I’ll still refuse to put ketchup on my hot dog.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

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July 14, 2017

Correlating The Housing Trackfires

As I sit and write these Housing Notes, I wonder why I enjoy writing so much but remain challenged by the grammar of it all. It’s not like I haven’t tried to up my game grammar over the years. In my world, life is one big run-on sentence connected by conjunctions. I thought I learned a lot a lot from watching ABC’s Schoolhouse Rock as a kid.

But I think I was too enamored with the trains – I’ve always loved trains – so I correlated those videos with real life and forgot the grammar part.

but I digress…

Additional Market Reports Released This Week For Brooklyn, Queens, and More…

This week Douglas Elliman published our research on a number of housing markets as part of an ongoing series I’ve been authoring since 1994:

Wall Streeters, as we often illustrate here, love their real estate. Bloomberg coverage of the Brooklyn sale and rental market using our research was the 5th most read story on the Bloomberg terminals world wide.

And a cool chart on the compression of inventory that caused a median sales price record to be set for the 4th consecutive quarter.

Here are a sampling of charts from Brooklyn and other markets published this week.

Will Amazon Be The Next to Disrupt Housing?

This is beginning to fuel rampant speculation (via Curbed)…

Real estate news website Inman reported that on Tuesday, while Amazon Prime Day was in full swing, the e-commerce behemoth quietly debuted a new “Hire a Realtor” page under the Home and Business Services section that featured a field in which to enter a ZIP code followed by a “Coming soon” message.

The moment might be right given the anger and focus on Zillow these days..especially their modified Premier Agent product and $3 per day per rental program policy offered through their Streeteasy property.


I’m dating myself, but as a teenager, I remember when gas pumps couldn’t go beyond 99¢ so most had a written “1” or taped a “1” on a piece of paper. This may have happened with a listing, or I might simply be over interpreting this.

I came across as a Trulia listing on July 11, 2017, on Long Island for $999,999,999+. That “+” struck me as odd because it inferred that Trulia couldn’t hold another digit. Earlier in the day, I received a notice of a $100,000 listing of a large home that turned out to be the same picture as the $999,999,999+ home. It inferred to me that the data entry could not process a price of $100,000,000 so it kicked back to $100,000. Then one assumes (I know, I know) that the price was modified to $999,999,999+. This article in Newsday came through my feed on Wednesday using the modifier “near” in the headline. But this morning, the Trulia listing for $999,999,999+ was gone.

Welcome to real estate. And remember to take screenshots of strange things.

SF/Oakland Real Estate Is Literally on Fire

San Francisco

If that sinking (16″) and leaning (2″) San Francisco Millennium luxury condo tower couldn’t have worse luck, how about increased fire risk? Aside from being projected to continue to sink 2″ per year?

An outside architecture engineering firm found gaps in the walls of one unit that could present risks in the event of a fire, NBC Bay Area’s Investigative Unit reported.


Four new development projects were subject to arson this week.

Where The Cranes Are

I thought this construction crane infographic from the Seattle Times was pretty cool except for the lack of Miami and low count for Manhattan part. The key point being made is that Seattle is booming but LA is catching up. In my LA research for Douglas Elliman, it has become apparent that LA is discovering vertical living and condo tower construction is booming.

Devotion To Parking Is Bad For Your City

In the new urbanism movement, it has become evident that too much parking chokes off pedestrian activity by pushing retail spaces farther apart. This STREETFILMS video has a conjunction-junction feel to it but it is well worth watching…

PARKING: Searching for the Good Life in the City from STREETFILMS on Vimeo.

Spurious Correlations About Bikelanes and Housing Prices

Quite a while back I wrote about an awesomely funny book called “Spurious Correlations” that I bought and very much enjoyed. It explored the world of junk stats – a topic I’ve discussed quite a bit here on Housing Notes – most recently covering blue bathrooms. The data analytics behind the correlations can be high level and accurate (or not) but the interpretation confuses causation and correlation. This morning I’ve had several people send me this article: Property Sales Jump 16 Percent Along Bike Lanes in Bushwick, Study Says with a lot of head scratching.

While the data and methodology were disclosed who is to say one causes the other? I call that a “hop, skip and a jump” story telling. The inference made here seems more like this to me:

There are a lot of junk stats in real estate – well meaning but not useful.


The real estate appraiser industry needs a public relations firm. We have no advocates or if we do, they aren’t getting the job done. There was a very one-sided Bloomberg Businessweek article that predicted the real estate industry would be gone in 5 years. I like the author and have followed his writings since he was at WSJ. But like the Housingwire piece discussed here a few weeks ago, the story is being told in a one-sided way and the author needs an to understand the nuance. Interview a slew of companies that have everything to gain from removing appraisers from the mortgage process and through in a token appraiser interview.

The introduction raised flags that meant there was trouble coming (in the article).

Twenty-five years ago, Brian Weaver was told at a seminar that the real estate appraisal profession would be killed off by technology in five years. It didn’t happen. But he now thinks the forecast wasn’t exactly wrong—just early.

I immediately thought – why wouldn’t trouble brew in 25 years rather than 5 this time just like before? Doesn’t history repeat itself?

And the article was out of context – which appraisers are we talking about? In this case, he meant residential mortgage appraisers based on who was interviewed, not the appraisal industry.

As far as the token appraiser quote as an offset to the slew of appraisal industry adversaries quoted – this time it was with Jim Amorin, president of AI National – who has consistently acted as anything but an advocate for residential mortgage appraisers with this (aside from his residential committee):

At the industry’s peak in 2007, states had granted 121,407 credentials to perform residential appraisals. Last year there were 96,856, some of which were held by people working in multiple states. The pipeline of young people entering the profession is almost empty, says Jim Amorin, president of the Appraisal Institute, a national trade group.

Here is the data he is referring to that is cited wildly out of context. Thanks to appraiser Matt Simmons for keeping us all sane.

This is like looking at supply, without demand. So let’s look at mortgage demand. This trend clearly shows that there are MORE APPRAISERS now relative to the demand for our services.

The Next Job Humans Lose to Robots: Real Estate Appraiser [Bloomberg]

It was also referring to Freddie (and Fannie)’s willingness to do appraiser-less appraisals. This is true and clearly overstated. Consider the issue with trainees for the past 9 years. The vast majority of banks will not accept the use of trainees for appraisals yet Fannie is perfectly fine with it. If they won’t allow trainees, why would they suddenly (5 years) happily accept using no appraisers at all and opt to use AVMs for everything?

There is a lot more to this article to take apart, but the takeaway here is that the appraisal industry – the mortgage residential part – has no one working to convey the accurate context to what is actually happening. We went through this with the AMC false narrative of an “appraisal shortage.

Housingwire Webinar Redux

If you’re not busy, join us on July 26th.

Appraisal Institute Is Hiring An Outside Firm To Tell Them Whats Wrong

Their consulting firm doesn’t seem to be reaching out to the most outspoken critics of AI like myself. Darn, I am being punished. Oh well.

So many questions:

  • How much will this cost membership to tell AI National they aren’t doing a good job.
  • How can members be assured that all the feedback from the consulting firm will be vetted.
  • What assurances are there that after spending all this money, that actual actions will be taken?

This was sent to someone who is not in AI.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll get new railroad ties, you’ll discover “an, but & or” and I’ll respond to a survey.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

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July 7, 2017

Big Bathroom Data, Big Housing Results & Big Media Spamming Appraisers

In my opinion, the summer doesn’t really start until July 4th. No disrespect to Memorial Day summer purists and what that holiday stands for, but most kids are still in school after Memorial Day. I’m not sure if everyone had the same weather as we did in NYC metro but the July 4th 4-day weekend was amazing. Time with friends and family made it even better.

From Wednesday when I returned to work up until now as I sit and write this on Friday morning, I remain unabashedly groggy with relaxation (this is an apology in advance for typos and poor grammar). While July 4th was our nation’s birthday, July 5th was the 80th birthday of spam. And I learned something new: The name “spam” comes from “spiced ham.” I needed to get the word out as well as make a reference to the global cyber attack in my discussion of the Manhattan housing market later on as well address the spam-like attack on appraisers in the Appraiserville section below. Incidentally, one-third of U.S. households have a can of spam. Here’s this year’s 15-second Super Bowl ad that probably cost more than the equivalent of 1.25 million cans – I did the math.

Here’s the fried version.

And of course, here is the Monty Python version (I still have that Lobster Thermidor reference memorized from my teen years – test me when you see me in person).

But I seriously digress…

Blue Bathroom Valuation, The Junk Statistic That Won’t Go Away

Remember when I brought up the topic of valuing blue bathrooms a while back? There was an incredible blog post written by Salil Mehta over at Statistical Ideas on this very subject called: Zillow misestimates, despite Big Data. I added his site to my RSS feed and will hang on by my fingernails as I get more informed every day.

Of course, Zillow has improved their model substantially in recent years, but it is still significantly worse and often completely futile versus a human realtor estimate and Zillow has modeling accuracy that makes their home resale suggestions untrue (how do hey know what are the marginal drivers of price when they frequently have >40% errors?) Realtors tend to gauge the local nuances and flow data better, and interpret estimates that are far closer to the actual selling price.

In other words, Zillow’s big data modeling projects a nuanced precision that does not exist.

And he mentions a point I brought up:

Leading housing consultant Jonathan Miller reviewed these findings and agrees with the difficulties for Zillow estimates in dense cities, for example, those with a towering skyline: “A 3rd floor condo in Manhattan called 3A and the exact same unit on 33rd floor in same building called 33A can’t be distinguished in value.”

Here’s a subsequent article on the topic if you’re interested.

Oh, by the way, your name correlates with how valuable your home is…according to Zillow. I’m not sure why they continue to push out these misleading “fun facts?” They have such strong economic analytic firepower from good people yet insist on stat junk. I love to have fun with numbers as much as the next person, but it is important to convey the meaningless nature of it as a disclaimer so consumers don’t just run with it.

This just in: Get educated on your name’s impact to your home value a la Zillow:

Manhattan housing irony: luxury sellers cut prices to set new records

Real estate firm Douglas Elliman published our research on the Manhattan sales market yesterday in the Elliman Report: Manhattan Sales 2Q17 and our submarket report which overlaps the content known as the Elliman Report: Northern Manhattan Sales 2Q17. This is part of an expanding series I’ve authored for 24 years (gulp). Heavy press coverage of the report this quarter.

If you haven’t noticed, there is a lot going on in the world these days and a lot of it is stressful. So even with all the global distractions, it is good to know that Wall Streeters love their real estate news. Bloomberg’s coverage on the Manhattan market was the 7th most ready on their terminals worldwide yesterday when the report was released.

And the chart they presented had perhaps the most telling characteristic of the market. Sellers, especially at the higher end (luxury market defined as top 10%) are traveling further to meet buyers, who generally aren’t budging. So in effect, larger discounts from silly high asking prices resulted in new sales price records.

Here are a few charts from our web site gallery.

Here is an interesting long term trend for Northern Manhattan, defined as north of West 116th Street, Central Park, and East 96th Street.

The market share of co-op and condo sales over the past 30 years continues to rise. It is about 4x the share seen 25 years ago.

Where Are The Global Hotspots for High-end Housing?

Remember that the 15% foreign buyer tax from the province where Vancouver is located has shifted demand to Victoria (and Seattle). Taxes like this modify locations of such purchases but don’t stop them. It has shifted the problem to other locations.

The Acronym Wars: What’s in a neighborhood name?

Every few years, there is WSJ coverage of a local neighborhood leader in some northern Manhattan neighborhood fighting against gentrification acronyms as an insult to the existing residents. I appreciate and respect this position but at the same time, I don’t quite understand it. I have always seen neighborhood boundaries, housing stock, residents and conditions as something in a constant state of flux over the hundreds of years of Manhattan’s existence. Neighborhoods are not a static entity. The latest offender was the use of the acronym Soha as in South Harlem. The leaders were able to get results and a real estate agency removed the Soha reference in their signage.

Redfin Goes IPO

I’ve never been quite able to figure Redfin out. They changed their original model from cheap commissions and use of “show-ers” instead of agents to something more traditional. I find their website generally better than Zillow as I do their valuation tool (it’s less but still terribly inaccurate. Now they are looking to raise more money so we will gain additional understanding of what makes them tick.

Here are a couple of solid thought pieces on Redfin, especially Rob’s.

  • Random Thoughts on Redfin Going Public [Notorious ROB]
  • Six things to know about the real-estate company Redfin before it goes public [Marketwatch]


The appraisal profession needs PR. We literally have none. This week it was clear that my profession was under siege by ignorance from those I just assumed were informed. It now makes me questions anything else they might have said in the past. Real estate appraisers in the trenches, especially those in my residential world, have been quiet since our dawn of existence until the past year. It is time for all of us to respond to these inaccurate depictions:

These were my favorites of the week…

Homebuyers who pay cash win deals as appraisals derail sales in tight Chicago market [Chicago Tribune]

No appraiser interviewed
Story hook about the $5k buffer yet doesn’t disclose whether the value actually came in low.

I didn’t think it was possible to cram so many appraiser stereotypes into one article [sarcasm].

  • We are old, behind the market and aren’t keeping up with the rising prices
  • There is a shortage of appraisers
  • We are conservative because the banks tell us to be
  • We don’t want to be held responsible for appraising the sales price
  • We want protection so giving us a signed letter attesting to the value for our files
  • Appraiser is a blip on the way to buying a home

Appraisers May Be Holding Back The Housing Market, And That Might Be Okay [Forbes]

The econ blog Modeled Behavior writes a piece for Forbes that sees appraisers as keeping the housing market get out of hand. He does note that there isn’t data on this, just conjecture.

No interaction with appraisal profession noted

  • Appraisers are very conservative in the wake of the housing bubble and are effectively keeping prices below their market levels.
  • Banks are more likely now to outsource the process of hiring independent appraisers to so-called appraisal management companies
  • Appraisers who lived through the housing bubble may be more conservative about what kind of price movement is reasonable

When is a broker’s price opinion better than appraisal? [Chicago Tribune]

The author presents the very idea that Zillow and Redfin can give you a sense of what your home is worth sends me off to la la land. He says BPOs are used by banks for short sales to save $100 for the additional appraisal fee since they are already losing money on the foreclosure. LOL.

No shared insights from appraisal professional

  • Professional appraisals are expensive ($100 more than a BPO!)
  • Professional implies more information than just the number
  • Appraisers do drive-bys on motorcycles

The latter point nailed it for me. Then imagine if the appraiser was wearing flip-flops on that motorcycle drive-by? What a lack of professionalism. Definitely, save your money and get a Zestimate.

Zen and The Art of Real Estate Appraisal [Appraisal Buzz]

I included this article mainly for the comments near the bottom of the post. The idea that there is a zen or art to appraising allowed in an AMC dominated residential appraisal world is an ancient, dated concept.

When you get review appraiser questions like:

  • Why did you use comp 3?
  • Justify your adjustment for [fill in the blank]

It has become a mechanical process where experience has limited value and abstract concepts have no real worth to the 19-year-old gum chewer that is calling you for the status of your report for the second time that day.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll break out the spam, you’ll light a leftover firecracker and I’ll cook up some Lobster Thermidor.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

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June 30, 2017

Looking Through The (Zillow) Bathroom Window at McMansion Hell

Well, I crossed the street successfully and am back at here on Housing Notes. My wife and I had an amazing, long-awaited vacation in London last week you were warned in last week’s HN. Through the din of massive tea consumption and a record heat wave, I was amazed out how much the city has grown and improved since I was last there in my teens. Every block seemed to have a construction crane. Walking the streets of London made us feel like salmon swimming upstream through millennials. Residents appeared very upbeat despite the terrorist events (the last one was on our first night there). Supposedly the local economy is just about at the point where the impact of Brexit will take hold but, you’d never know it.

Global High-End Rental Trends are Sliding

Knight Frank just released their global rental index, and the results match the weakness of the high-end condo sales market. Rent growth has been straddling zero for the past couple of years which aligns with the weakness of the top of the new development condo market in New York. I provide a small sliver of research for Douglas Elliman used in this report.

Billionaires’ Row Bookends

[Source: Photographer: William Edwards/AFP via Getty Images via Bloomberg]

The West 57th Street corridor has provided massive media fodder for the new development housing boom as the global elite purchased 8-figure homes to sit empty. I always saw the phrase “Billionaires’ Row” as fightin’ words as to “altercation” or “quarrel.” A billionaire smackdown over who had the most expensive condos in the world.

The project first out of the ground is known as One57, and because the developer was too aggressive raising prices from lack of competition, sales nearly stalled or at the very minimum have been tepid. This gave time for all the competition to rise around them and make matters worse.

Recently, this project has received a spate of bad news. Initial re-sales selling for 20+ percent less than their original purchase – one for 33% less. and 2 very large foreclosures, the latter that showed kleptocracy in play.

And about that kleptocracy thing:

Foreclosure proceedings were started in January on Aluko’s apartment on the 79th story of One57, which would be the costliest ever residential seizure in New York City. The 6,240-square-foot (580-square-meter) condo was bought in 2014 by a shell company listed in New York City public records as One57 79 Inc., whose sole shareholder is Earnshaw Associates Ltd. Earnshaw was set up by Aluko in the British Virgin Islands, according to the Panama Papers, a trove of documents leaked in 2016 to expose offshore tax evasion, which cite him as a shareholder and beneficiary.

Here’s what I said about it in The Real Deal, in what was a terrific overview of the situation.

“You have a nearby development from the same developer with a similar price point that’s got twice the number of units,” said Jonathan Miller, CEO of appraisal firm Miller Samuel. “The first building has a lot of units to sell and Billionaires’ Row is very quiet right now. Maybe that will change. But the scale of this and the fact that it took so long to shore up financing, it’s confusing to me what the lenders are thinking. It makes no sense.”

The sad part about the red flags in this series of events is that it provides the biggest optics of the market for consumers, yet it has nothing to do with the performance of the remainder of the market which sees balanced resale inventory, modest price growth and elevated sales volume.

McMansions are back?

The symbol of the housing bubble excess might be returning. Although the reasons are different.

McMansion Hell is Definitely Back

A while back on Housing Notes I mentioned McMansion Hell, a website that pokes fun at McMansion architecture. I had discovered it while listening to one of my favorite podcasts, 99% Invisible. They received a cease and desist order from Zillow, yet they don’t own the copyrights to the photos they present. It came across as heavy-handed and the internet went into outrage mode.

Buzzfeed provides a great chronology of the issue. Other sites like The Architects Newspaper, Ars Technica and The Verge also have good reads.

The Verge offers some great advice to Zillow: “Maybe talk to people before sending the lawyers.”

Bad Times For Zillow’s PR Department

Here’s a recap of some recent Zevents:

Despite all of this controversy, Zillow is doing well financially and I suspect will continue to do well. This is what disrupters do.

But consider this great insight: The Wrong Kind of Entrepreneurs Flourish in America

Aspirational Mansion Pricing Reigned In

There was a wave of $100+ million listings that hit the market in 2013-2014 during the heydays of “aspirational pricing.” One just sold. but not at the original a $100 million dollar price. After a total of 70% price drops to $29.85 million, it sold for an undisclosed price (it hasn’t closed yet).

To get basic and move away from the inferences many will make on this sale, the high-end market has not declined 70% as evidenced by a four-year marketing time. It seems pretty reasonable to infer that the original list price of $100 million was never connected to reality. We see this behavior (not to such an extreme) in the slight rebound of high-end sales in NYC metro area suburban markets. The buyers were sitting around waiting for sellers to connect with actual market conditions, and that’s encouraging since sales volume determines the health of a market, not prices.

New York 1911

Watch this.


Ryan Lundquist of Sacramento Appraisal Blog has always been one of my regular reads, and the man has hobbies like making skateboards and finding small nuances in the market such as the following inspiring video:

Kick flip

In the appraisal industry these days, the big skateboards are more out of our control, but little victories pile up (if you missed it, this was an analogy).

Future of Mortgage Appraising is Dire

What does the future look like for appraisers, specifically mortgage appraisers, regarding automation? My theory why AI National has abandoned their residential members, aside from the recent committee to look into how to change that, is because they believe there is no future for mortgage appraisers with automation and are afraid to tell their members.

According to this latest research, appraisers, most likely mortgage appraisers, have a 90% chance of being replaced. That’s too absolute for me because automation can’t tell if the house was occupied by 57 cats, but there is very high risk for the more generic stuff (i.e., low-end AMC work).

The message from this? Specialize and upgrade your skillset to differentiate. Leverage your valuation skills into other related things.

Ken Harney asks: Are home appraisals always necessary?

He had me at “always.”

Ken Harney, noted columnist and reader of these Housing Notes (Hi Ken!) have consistently covered our industry when few journalists of his caliber would. Fannie Mae is proposing “appraisal-free” mortgage products. MBA loves it too – many of their members include AMCs. After all, mortgage lending is all about automation, and not about valuation accuracy since the U.S. taxpayer is always on standby for a bailout. Any way to streamline mortgages to make them fast is all that matters today. Scalability.

I believe Fannie’s logic is simple. They currently hold mortgage portfolios with average credit scores well above 700 because credit standards remain historically tight. That allows them to take more risk. In other words, “our portfolios are so strong that we don’t care all that much about the details of the collateral.” They’re not saying that appraisers are not needed for anything, but it is a concern since many of us have lived through the bubble and are observing the collapse in concern about quality from the AMC industry. That deterioration occurred despite the AMC industry much-touted analytics, which relies upon eroding data quality as good appraisers increasingly stay away from AMCs.

There were some great quotes inserted by appraisers Carl Schneider and Pat Turner in the piece. I’m not sure Pat realizes it, but he’s now officially famous, having appeared in The Real Deal magazine in NYC.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll hang ten on their street board, you’ll cross Abbey Road someday, and I’ll start dreaming of my next vacation.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

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June 23, 2017

London Calling

When you read this, we’ll be flying back from London after a well-earned vacation. I’m writing this note on the evening before we left for vacation. I have framed out my future (at least for the next week) and it requires a deep immersion into vacationing. No work will be done across the pond since I’m not bringing my laptop.

When I was a sophomore in college I played the London Calling album by The Clash so many times that I still think of the name “London Calling” whenever I hear the word “London.” It sounded so raw, wonderful and controversial at the time yet now it seems so tame. I still love it but I could easily listen to it while having afternoon tea & crumpets with an old clock ticking on the fireplace mantel (that London immersion thing is already working).

Back in ’79, my college campus was abuzz about The Clash’s national TV appearance on the SNL-competing sketch show “Fridays.” My roommate, friends and I were at a party on the other side of campus on that Friday night and there wasn’t a TV to be found. We ran around campus and finally commandeered a TV in a lobby of a nearby dorm. It was a full-on glorious few minutes of that song because it was more than a song. It was a thing.

Here is the official album version.

As well as their appearance on the show “Friday” that I watched live…

And the iconic album cover…

And the original album cover that inspired it…

If you stuck with me, thanks. Next week I get back to the business of housing.

See you then.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

June 16, 2017

Heroes of The Housing Tornado: Man on a Lawnmower Edition

I’m not a big super-hero-in-a-cape-movie fan (but I have a soft spot for a TV version) but I do respect someone who likes their home to look good, no matter what. Back in 1984, when I was a real estate agent for six months in suburban Chicago, my last sale before I moved to Appraiserville was almost crushed by an old, very used, rider mower. The buyer wanted it, and the seller was sentimentally attached to it. The seller stood firm, and luckily the sale went through.

I doubt if the homeowner below would throw in a lawnmower as a deal-sweetener when the time came to sell. He was quoted as saying he ‘was keeping an eye on it’ which is always good advice for Housing Note readers.

Interest Rates: FOMC Is Not Keeping Their Eye On It

Speaking of ‘keeping an eye on it’ – it is always a bad idea to second guess the Fed, but the idea that FOMC intends to push for another hike this year after yesterday’s hike and mortgage rates didn’t really react that much is further evidence that housing market participants don’t need to be concerned about runaway mortgage rates.

Even though rates edged up a little after the Fed announcement, in context they remain lower than they were on January 1st.

Because banks borrow short term and lend long term, and bond traders still think the Fed is harming future economic growth, as evidenced by the yield curve i.e. spreads, which are flattening. With less wiggle room, I suspect this will cause mortgage underwriting to tighten or remain tight which is not good for the housing market if we want it to normalize.

May Showers Bring June…NYC Rental Charts

Housing Afordability Ditties

Housing Shortage Catches Google’s Eye [MReport]

The supply of housing is so limited, even Google has taken notice. On Wednesday, the technology giant announced its efforts to alleviate the ever-tight (and ever-expensive) housing market of Silicon Valley through an investment in modular housing.

Since land costs are the reason housing is expensive, how does the purchase of modular housing resolve this problem, unless Google already owns a bunch of land?

Study: U.S. must add 4.6M new apartments by 2030 to meet rising demand [Curbed]

The country will need to add over 328k new apartment homes each year on average to keep up with demand. The industry averaged just 225k completions from 2011-2016.

We simply can’t keep up with population growth. I suspect the problem will become much more significant in urban markets are housing construction there is relatively inelastic.

A $664,000 Parking Spot Symbolizes Hong Kong’s Property Frenzy [NY Times]

In many places, $664,000 can buy you a nice house. For that price in Hong Kong, you can buy a slab of concrete, roughly 17 feet long and 11 feet wide, to leave your luxury car.

This price is a little higher than new development sales in Manhattan that go for around $450k. The problem in tracking these sales is that they are often blended with the residential sale.

Thinking About The Next Cycle

I don’t track metrics on open houses myself, but I seem to recall an unusually high number of events staged at the $70 million penthouse listing at 50 UN Plaza. I believe it has been on the market for about four years. In fairness, construction was only completed a year and a half ago, and current buyers do not purchase off of floorplans.

In the second half of this Forbes video I bring up the idea of the “next cycle” since this market cycle started in 2012 and if you believe cycles are seven years, we are two years from the next one. I wonder if some developers are holding tight on pricing for exceptional units, for now, hoping the next market arrives sooner than later. However, the brief post-election sales bump turned out to be a false-positive, and Manhattan luxury sales activity has cooled considerably in recent months.

[click on image for video]


Housingwire Gave Appraisers A Long Overdue Win

After a snarky trying-to-be-coy blog post that tried to win on a technicality that there was an appraiser shortage, many appraisers, including myself, took to the streets (the comments section) to voice our outrage. It was based on an amazingly misinformed Urban Institute post that doesn’t understand the appraiser role in mortgage lending, which was even more infuriating. I’m a long time reader of Housingwire and knew the founder, who visited me in my office well before it was sold to investors. In response to the blog post outcry by the appraisal community, HW editor-in-chief Jacob Gaffney reached out and asked me to write a rebuttal. To his credit, he got our message and promised to do a better job covering both sides of appraisal issues. He handed our long besieged industry a rare “win, include” and I am grateful for his honesty and for the opportunity to voice my view on their platform.

Hey 50-percenters, there is no “appraiser shortage” so knock it off [Housingwire]

Here’s what the win for appraisers looked like:

But I digress…

In my Matrix blog post on this rebuttal, I inserted a cool chart that was presented in a prior Housingwire Webinar that also includes the infamous AMC owner Brian Coester – who blocked me on Twitter after the webinar (I feel honored). I add this line of reasoning in the Housingwire story because I wanted to talk about the optics of the false narrative being pushed by AMCs.

From my Matrix post

Not too long ago there was a webinar hosted by Housingwire that included some Powerpoint slides by one of the panelists, Matt Simmons. He is a Florida appraiser and former state regulator. He shared it with me, and one of his slides is quite amazing. He matched mortgage origination volume with the federal registry of appraisers.

The finding?

The ratio of appraisers to mortgage volume has been higher since the housing bust than during the housing boom. While the chart only goes to 2015, both total origination and appraisers have changed little since then, so the ratio would remain stable, consistent with the post-financial crisis pattern. In other words, there are more appraisers now than there were during the Housing Bubble based on mortgage volume.

Voice of Appraiser Podcast Goes All FTC On US

On Today’s free podcast, Phil discusses difference between the Foley case and the FTC’s action against the Louisiana Real Estate Appraisal Board. Then he goes into “AMC Teddy Bear Picnics” which is something I can’t articulate like he can but that’s why Phil makes the big bucks. Listen.

And The Survey Says!

A colleague of mine asked me to pass along this survey on appraiser issues. I’d appreciate it if you would fill it out and share it. There are only six questions and they focus on your day to day work experiences. The results will be shared soon.

Appraiser Issues Survey

Fidget-Spinner Housing Demand Analogy Makes Coin

Ryan Lundquist of the Sacramento Appraisal Blog leverages his son’s spidey-sense of a Fidget-spinner bubble in a housing market analogy. The Nobel Prize committee has already made a note of his son’s highly developed economic acumen.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll never see it coming, you’ll realize that name-dropping doesn’t work and I’ll play the only instrumental ever banned on the radio. No really. See below.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

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June 9, 2017

Catch A Falling Rental Market

I’ll explore the NYC rental market this week – actually I needed a way to insert this short video into this week’s Housing Note. I got five hours of sleep last night so I needed some levity.

The May 2017 Elliman Report Was Published

Douglas Elliman just published my research on the New York City market, namely the Manhattan, Brooklyn and northwest Queens rental market. This is part of an expanding series of Elliman reports I’ve been authoring since 1994. The rental market accounts for two thirds of the total housing stock although about 75% of the rental market has statutory tenancy. The rental report itself covers new leases, not renewals. The latter is the secret sauce of the rental market, held very closely to the landlord’s vest. In most cases, new leases represent about one third of rental activity and since that information is not recorded in public record, we are collecting a modest portion, but a representative sample across the market, rather than simply the results of Douglas Elliman’s business.

When this was published, I was thinking that there was no way that my rental market research could compete with the Comey Hearing in the U.S. Senate. But hey, the coverage of our market report was the 7th most read story on the Bloomberg terminals world wide.

And speaking of Bloomberg, here is a chart on the rise in new leases – both from consumers pushing back and rental price increases at renewal and more new development product entering the market.

Here are the matrix tables for each of the 3 markets:

And some extracurricular charting:

One more thing on high end rental market skew…

In the month of May, we tracked 88 new leases signed that were at or above $15,000 per month. That was a 95.6% surge over the prior May. Not only was there a surge, but the median rent for those units jumped 8.4% to $19,750. With the introduction of larger, high end apartments into the mix, they do have some impact on aggregate price trends even when looking at median sales price. That’s because there were 47% more sales at or above $10,000 per month. These transactions also skewed larger apartment price metrics such as 2-bedroom and 3-bedroom units when on a unit for unit basis, those markets continue to weaken. Newer higher quality units are continuing to obfuscate the rental market in general.

Ok, one more thing on rentals, really…

With the heavy use of concessions, landlords are in danger of attracking too many renters that can only afford the rent if they are provided with concessions. If for some reason the rental market rebounds and the landlords stop offering concessions, many existing renters will not be able to renew. Curbed has a great piece called: What happens to New York apartment-seekers when perks like free rent dry up?

Jobs and Homeownership

The U.S. economy is showing mixed signals these days (remember that the economy is NOT the stock market) with a recent lacklust jobs report a the beginning of the end of a long run of tourism growth. Mortgage rates, which reflect future risk, are at their lowest level this year. Oh, and old-timey jobs are hot.

Apparently it is homeownership month. In this note to the NYT editor, and I would suggest a more important discussion over debating the mortgage interest rate discussion, is the mobility of our work force. With the decline in manufacturing, many workers are noit able to where the new jobs are.

It looks like salad days for engineers.

99% Invisible Podcast: Squatters of the Lower East Side

When my wife and I moved to Manhattan in 1985 from the midwest, it was a little dicey. The “broken windows” theory had not been set into practice and our relatives were concerned about our saftey. One of the more worrisome neighborhoods to perform appraisals was the Lower East Side of Manhattan. I remember walking to an inspection on Avenue B, passing a school bus on blocks having been engulfed by flames a while ago, “gangs of anarchists” walking directly up to patrons of local restaurants asking for a bite of their sandwiches, rubble strewn vacant lots, noticing the door of a condo conversion with the freshly painted monniker “die yuppie scum.” There were quite a few tenaments that were occupied by squatters. Thirty years of gentrification later, you’d hardly recognize it.

Here’s a great story on what happened: Squatters of the Lower East Side

[click to play]

The Global Glut of Super Luxury

The FT takes a great broadsweeping of the aftermath of the global super luxury development boom.

Here’s a good overview:

The luxury construction frenzy has produced too many buildings, and political factors have turned against the sector. China has attempted to clamp down on money flowing out of the country, while low oil prices and sanctions have curbed sales to Russian buyers. Cities around the world are imposing new taxes on overseas property buyers, and there is increased scrutiny of money laundering through high-end property. The mayors of London and New York have pointed to gleaming residential towers as symbols of inequality amid chronic shortages of affordable housing.

Upcoming Speaking Events

June 13, 2017 – Real Estate Board of New York: Residential Brokerage Division Owners and Managers Breakfast: “New York, New York On The Global Stage.” Tickets for Owners / Principals of Residential Brokerage Firms and Residential Branch Managers are available for purchase on rebny.com.

I’ve been warming up with two events this week and in both cases I seemed to be enjoying myself. Thanks to Nancy Strong and Christine Haney for the actions shots!


Sorry, but I am taking a little breather this week – no, not because I got home at 3 am last night – but because there are things that are slowly developing that I don’t want to write about prematurely even though I am dying too. There are a number of legal and policy matters coming to a head these days after years of self-dealing by certain entities that benefitted from taking advantage of or simply beating down front line appraisers. It has been painful to watch and experience but I am glad we are seeing things on the verge of coming to the surface. More on this in the future.

Ok, I’ve got to come clean. I am cutting this short because I was out until 3 am last night despite being under the weather. In the meantime, check out the Appraiserville links below, especially over at Appraisers Blogs.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll sharpen your knife, you’ll discover a creative way to paint the town with sex and I’ll cut a piece of fermented curd.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

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June 2, 2017

Getting The Bathroom Color Just Right by Putt-Putt Pros Using Old Spreadsheets

Admittedly I have a few sports skills that most of my readers aren’t aware of. Specifically I was a darn good putt-putt golf player in my teens, and who knows whether I would have ended up as a pro putt-putt golfer if I knew about it, instead of a real estate appraiser. I’m not really sure which occupation is the more grueling one. I mean, putt-putt professional golf was disrespected for being a tiny low paid niche of a bigger sport, and appraising continues to be disrespected as a tiny low paid niche of the bigger real estate industry. So in the interest of transparency, I always went with an orange golf ball.

Or to put it another way, if I hadn’t heard of the early spreadsheets, I probably wouldn’t be a market analyst. Here’s a fascinating history of the one that started it all – Visicalc.

Now that foundation of my lot in life has been established, let’s talk about bathrooms…

Homes with Blue Bathrooms Sell for More?

[Geithner Bathroom, Westchester MLS]

Remember former Treasury Secretary Tom Geithner’s blue bathroom that didn’t help him get his price back in 2009?

Today I received a press release from Zillow that shared the results of their research with the headline: Homes with Blue Bathrooms Sell for $5,400 More than Expected.

Like the Zestimate’s results that are presented to the nearest dollar, this type of presentation infers a market precision that does not exist. Labeled as “disrupters,” I think Zillow’s concept of “aggressively marketing an accuracy that is non-existent” is one of the biggest challenges facing real estate appraisers and brokers and in turn, the consumers. Numbers can be magic, especially when presented in an econ-sounding way. The consumer absorbs the results as gospel without challenge.

I’m sure the numbers are accurate for the data they have but Zillow’s application of the results are misleading. Yes their data says blue bathrooms sell for $5,400 more but that doesn’t mean your blue bathroom will get you $5,400 more than your neighbor with the exact same house across the street that doesn’t have a blue bathroom. The problem here is that consumers take this information and run with it.

Are 19 Bathrooms Enough?

There is a 30,000 square foot home listed for sale in New Jersey that has been off and on (essentially on) the market for 7 years. Still vacant, the seller announced that he is ready to sell at $45 million after initially listing it for $69 million.

As I mentioned in the article, an excessive marketing time like 7 years suggests that pricing has not been close to market. I don’t think you need to be an appraiser to understand that.

How About A ‘Beige’ Look In That Bathroom?

The Fed released their “Beige Book” this week and I always look to it for a narrative on the state of the economy right now. The headline in the WSJ says it all: Fed’s Beige Book Reports Slower Growth, Less Optimism in Some Regions

Or just directly to the Fed Beige Book and drill down by the member banks to get a regional anecdotal description. Here are a few summaries for the banks whose regions overlap those of our Elliman report series:

New York
Economic activity has flattened out in recent weeks. Labor markets remained tight, and wages for skilled workers have continued to grow moderately. Input cost pressures have remained fairly widespread, while selling prices have increased at a modest pace. Housing markets have been steady, on balance, while commercial real estate markets have been mixed.

Atlanta (South Florida)
Economic activity modestly improved. The labor market remained tight. Firms noted use of training programs to attract and retain workers. An uptick in wage growth was reported for high-demand positions. Retail sales were soft, however, sales of trucks and large vehicles remained solid. Manufacturers noted increases in new orders and production.

San Francisco (west coast)
Economic activity continued to expand at a moderate pace. Overall, price inflation was steady. The labor market tightened further, and wage pressures grew moderately. Sales of retail goods grew modestly, and growth in the consumer and business services sectors remained strong. Manufacturing activity picked up to a modest pace. Activity in the real estate sector remained strong. Lending activity grew moderately.

Freddie Mac Tells Us That Rate Growth Seems To Be No More

Oh, and no matter how many time Fed FOMC members speak in public about strong economic growth and future multiple rate increases, mortgage rates are sliding.

Mortgage Interest Deduction Lifts Housing Prices

There was an interesting article in The Real Deal Magazine column: The Long View. The mortgage interest deduction is America’s great inequalizer

The concept is pretty straight forward. When you introduce ways to cut costs for homeowners (i.e. making the payment smaller), the price moves higher. We see this in other mechanisms like tax deductions or low mortgage rates. The universe doesn’t remain in a vacuum while you solely enjoy the benefit. I’ve taken the deduction for years and have always been concerned about a price drop if this key homeownership incentive for housing activity was suddenly removed. Here’s why.

According to a well known 1996 study by Richard Green, Patric Hendershott and Dennis Capozza, U.S. home prices may be between 13 and 17 percent higher than they normally would be because of the MID. The logic is simple. The deduction makes it cheaper for Americans to take out mortgages, which means they can afford to pay more for homes, which artificially inflates demand, which in turn drives up home prices.

In addition to the mortgage interest rate deduction, land use regulations also push prices higher. Edward Glaeser, a noted author on this topic – and not because he has cited my market research in the past 😉 – wrote an interesting piece for Brookings on reforming land use regulations.

We changed from a country in which landowners had the relatively unfettered freedom to add density to a country in which veto rights over new projects are shared by a dizzying array of abutters and stakeholders. Consequently, we now build far less in the most successful, best-educated parts of the country, and housing prices in these areas are far higher than construction costs or prices elsewhere.

It is prudent to realize that value isn’t just inherent. Zoning, land use regulations, tax incentives are embedded in that value. So if those incentives are removed, the value will quickly drop. I’m not presenting rocket science here (that’s for later down the page with Elon Musk) but housing value is not just “location, location, location.”

Random Real Estate Information As Ads

In covering over 30 U.S. housing markets for Douglas Elliman, I have a lot of real estate trivia stored in my head. Here are some charts and copy I wrote to showcase this information from our research that was used in their marketing efforts. Click to expand them.

Off Topic

This week I am sitting in my D.C. hotel room about to attend some appraiser regulatory meetings and I’m under the weather and still groggy from Memorial day time off. As a result, I’m a little thin on content this week, plus I needed a little pick me up. I have provided two fascinating interviews that, while they aren’t specific to housing, are about ways to think of the future. I implore you to consume both riveting interviews:

Barry Ritholtz’ Masters in Business on Bloomberg: Marc Andreessen, Venture Capitalist at A16Z [link]

TED – Elon Musk: The future we’re building — and boring [link]


This week it is all about the FTC.

The FTC Has Sided With the AMC Industry Rather Than All The Appraisers Those AMCs Have Gouged

Today was a historic day for the appraisal industry, and not in a good way. After years of the expanding AMC monopoly on appraisal services to a more than an 80% market share, and with these third-party companies taking 50% or more of the prevailing appraisal market rate from appraisers in the mortgage lending space, the FTC has made a tone-deaf move with this action. The FTC made an announcement after what I heard was some hard lobbying by REVAA, to challenge Louisiana Real Estate Appraisal Board on restrictions that they say hurts competition.

The Louisiana Board came right back at the FTC with their own release later in the day. The state board’s counsel is considered one of the best antitrust lawyers in the U.S. so this is going to get interesting. Housingwire provides a summary of what we know at this point. Keep in mind that Housingwire’s editorial position is pro-AMC given their lack of acknowledgment of the infamous AMC Coester v. Skapinetz lawsuit, yet showed a willingness to report on this anti-appraiser announcement.

Phil Crawford gives his always fascinating take on this FTC action and why it is a harbinger of tough times ahead for the appraisal industry.

Corelogic Takes The Zillow Approach

Apparently, we learned that big data can tell you what the best color of paint is for maximum value of your bathroom – even if you believe that, it cannot tell you that the house was occupied by 200 cats.

I was taken aback by the self-serving press release from Corelogic that basically said appraisals are questionable and automated valuations are better. That makes sense coming from a data firm with their own AVMs. The article lists a series of data that question the credibility of comp selection and adjustments with the “…these patterns aren’t sufficient to make conclusions at the loan level; more research is needed. However, he says, “They do reveal aspects of underlying inconsistency in the appraisal development, for which more sophisticated data analytics techniques are likely better suited…”

Part of the analysis that is missing – that contaminates the data pool – is the unending pressure appraisers are subjected to in the mortgage lending process, especially through AMC conduits. I find it weird that this type of analysis was understaken without consideration of the administration pressure the current syste, places on appraiser professionals.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll paint your bathroom, you’ll amass a lot of putt-putt golf scorekeeping pencils and I’ll get a hole in one at the 18th right into the purple hippos opening and closing mouth.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

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May 26, 2017

Housing Market Geometry’s Shrinking Dimensions

Friday nights are pizza night at our house. I remember seeing a lottery commercial a few years ago that explored what people would think about in all their spare time if they won the jackpot. One commercial showed a woman walking in a beautiful garden, contemplating the geometry of a pizza box. Admittedly, I thought it was pretty deep. After all, a slice of pizza (triangle) that is part of a pie (circle) that sits in a box (square) is kind of mindblowing…especially when I contemplate the round slices of pepperoni and parallelogram-like chunks of eggplant.

Apple, known for iPhones and MacBook Pros and their new saucer-like (circle) headquarters building…

And in the process, patented a better pizza box, although technically it is no longer a square box (circle). And they are not speaking in public about it, so the plot thickens (but not the crust).

All I can say is that appraisers are constantly measuring different shapes every day. This is a deep and a good segway to the next Housing Note slice (triangle).

New Single Family Home Sizes Are Getting Smaller

I thought this was a pretty interesting point made by NAHB on new home sizes:

Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions.

Here’s the trend…

Since Zillow Miscalculated Their Zestimate, You Can Get A Prize

The Zestimate has been around now for more than a decade, filling a voyeuristic real estate need but without consistent accuracy. And their former president once told me at a meeting in my office: “The consumer knows when it is wrong.” That might have flown in the early days when it wasn’t ubiquitous. And because they infer significant precision in their presentation of Zestimates to the nearest dollar, they don’t seem to be aware of how misleading the tool actually can be to consumers.

Zillow was recently sued by a homeowner/lawyer in Chicago, and her phone is ringing off the hook as evidenced by the news coverage. She is now representing an area homebuilder who looks to make their case go to class-action:

The lawsuit seeks an injunction against Zillow, saying that the Patels and the company have never requested or authorized Zillow to gather data about their properties or to publish it. One of the questions that the lawsuit raises is whether Zillow’s publishing homes with a Zestimate “violates the tort of invasion of seclusion.”

And in a diabolical attempt to marginalize the reliability of the Zestimate, Zillow has created a contest offering $1 million to whoever can make the algorithms more accurate.

The reason I think this is a diversion tactic to fend off the lawsuit is that the problem isn’t likely about algorithms. Zillow has had more than a decade to build and improve them. The real issue is more about the varying quality of public record and the simplistic singular digit way they present the results to the public. NYC public record is a horror show yet in other markets with more homogenous housing stock the results are more accurate.

More on the Retail Apocolypse: Manhattan Edition

Manhattan retail rents have spiked 50% since 2010 while the overall city retail rents have fallen 21%. No wonder there are empty storefronts all over Manhattan.

While I Have Style, The Celebrity Premium Is A Myth

Humblebrag: My insights and research were mentioned in both Woman’s Wear Daily and the New York Times Style Section this week, so I clearly have style. Ok, so they didn’t post pictures of me walking down the street in cool clothes but I thought my insights – at the very least – looked good.

Here’s a shout out to all celebrities that wildly overprice their homes – your buyers aren’t star struck enough to pay a massive premium for anything just because you lived there, particularly at high end of the market. The celebrity premium is largely a myth.

And while we’re at it, “experiences” can get buyers to new developments, but they don’t cause them to pay a premium. Pricing still needs to reflect actual market conditions.

Robert Shiller On Why Worldwide Economies Are Anemic

In Robert Shiller’s Project Syndicate column he addresses the global economic malaise and how it is fueled by pessimissm. This is one of the reasons I have a hard time believing mortgage rates are going to rise much over the next several years no matter what the FOMC decides to do.

Here’s what Shiller said about growing angst…

My own theory about today’s stagnation focuses on growing angst about rapid advances in technologies that could eventually replace many or most of our jobs, possibly fueling massive economic inequality. People might be increasingly reluctant to spend today because they have vague fears about their long-term employability – fears that may not be uppermost in their minds when they answer consumer confidence surveys. If that is the case, they might increasingly need stimulus in the form of low interest rates to keep them spending.

10-year treasuries have been fairly consistent since 2014.

I Wonder How Wealthy Home Owners Price Their Homes?

There is a beautiful Malibu California listing for $57.5 million. Although the Forbes reporter was able to get the square footage estimate of around 8,000 from the broker, the figure is not presented in the listing (as of this writing). This seems odd since it is a new home and there must be fresh architectural measurements. Perhaps it was done to prevent ppsf comparisons to other sales? Still, I love this place.


I pinch hit for Becky Jones, founder of the New York Coalition of Appraiser Professionals (NY-CAP), in a webinar hosted by Appraiser eLearning‘s Bryan Reynolds. I am one of the board members of the new NY-CAP effort. While the sound quality was a little choppy, I learned a lot from the other speakers, John Dingeman and Creighton R. Cross, MAI. Great information was shared and I soaked it up as someone new to the grassroots coalition movement.

I’ve got more appraisal news and issues to discuss, but it’s the Friday before Memorial Day weekend – who am I kidding? All appraisers I know are getting their shopping list together right now for some serious B-B-Qing this weekend. I’ll get back on my horse next week.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll grind meat for the BBQ, you won’t wear this hat and I’ll look at the physic’s of Roger Moore’s greatest iconic Bond stunt.

Have a terrific Memorial Day Weekend. See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

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May 19, 2017

Sgt. Pepper’s Lonely Housing Market Deep Tracks

You think that there is a lot of news and controversy coming out of Washington, D.C. these days? Well, the appraisal industry is seeing just about as much (Russia, aside) so be sure to read through the supercharged edition of the Appraiserville section below.

It is also important to note that on June 1st, we will celebrate the 50th anniversary of the Beatles’ Sgt. Pepper’s Lonely Hearts Club Band, the number one rock album of all time.

One could argue that this seminal album does not contain many deep tracks.

However, when you find deep tracks in the housing market, they provide a complete context to the market (or band) you thought you understood.

So let’s play that album. Ready?…1..2..3…4…Go!

NYC metro area NY Fed Business Leaders Survey [Sgt. Pepper’s Lonely Hearts Club Band]

In this NY Fed Business Leaders Survey, you can see how pronounced the pause in activity was late last summer into the fall before the U.S. election.

A Listing Description for the Ages [With a Little Help from My Friends]

There was a listing with this description on Zillow.

The single-family home with a cottage has been listed on Zillow since April and is priced at $130,000. This listing says in full:

Please read carefully before scheduling showings. May not qualify for financing. Great “diamond in the rough” investment property or primary home needing separate apartments. Little is known about condition except that property has active roof leaks.

Property is being sold “as-is” with no repairs, no clean-up, and no warranties expressed or implied. Upstairs apartment cannot be shown under any circumstances.

Buyer assumes responsibility for the month-to-month tenancy in the upstairs apartment. Occupant has never paid, and no security deposit is being held, but there is a lease in place. (Yes, it does not make sense, please don’t bother asking.)

Downstairs has 1,742 sq.ft, central HVAC, 2 large bedrooms, and ceramic tile bath w/separate tub and shower areas, living room w/fireplace, dining room, kitchen, utility/breakfast room and studio/study w/antique pine paneling and tile floors. Living room, dining room, and bedrooms have wood floors.

Berber carpet in central hall. In 2000, some electrical and plumbing were upgraded. Upstairs unit has 914 sq.ft. w/gas heater, large great room, built-in storage areas, small study/library w/bookshelves, bedroom, kitchenette (all in original pine paneling) and bath. Some electrical upgraded ’07.

Backyard cottage has gas heat, 563 sq.ft. of area including 2 rooms, bath and great room with kitchenette. All units have been used as rentals at some point. In the past, downstairs has leased for $1000, upstairs (occupied) $450, and cottage for $350.

U.S. Borrowers Credit Scores are insane. [Lucy in the Sky with Diamonds]

One of the reasons our housing market still remains distorted is because mortgage lending standards have not normalized. The credit scores for portfolio mortgage loans is incredibly higher than during the housing bubble era. In fact, 61% of all mortgages have an average credit score of 760 which is basically quadruple-mint territory. This is why I contend that credit conditions for mortgages – unlike auto loans, credit cards and student loans, remaining irrationally tight.

Getting Tired About Predicting Canada’s Housing Bust [Getting Better]

Goldman Sachs predicted that Canada’s housing market had a 30% chance of collapse within two years. Those odds seems fairly reasonable if not low considering their market kept on going after the U.S. collapsed.

The ‘Flipper’ Narrative Led to The Housing Bubble [Fixing a Hole]

Nobel Laureate and economist Robert Shiller connects the dots between housing data at the time and the price bubble through social narratives at the time – ie getting rich through flipping.

There is still no consensus on why the last housing boom and bust happened. That is troubling, because that violent housing cycle helped to produce the Great Recession and financial crisis of 2007 to 2009. We need to understand it all if we are going to be able to avoid ordeals like that in the future.

The Bronx is bubbling [She’s Leaving Home]

As the search for affordability increases, there has been an outward push in demand extending to the outer boroughs and suburbs. When Queens began to boom a few years ago I described it as “Queens is the new Brooklyn.” Now “The Bronx is the new Queens.” As this recent TRD article says, Investors are placing huge bets on the borough – but the numbers may not pencil out. Sales since 2010 show prices far outpace building fundamentals: TRD analysis

Mile High Buildings? [Being for the Benefit of Mr. Kite!]

An interesting conversation with Justin Davidson, architecture critic for New York magazine on an article he wrote in 2015. This dovetailed nicely with a great Citylab piece I mentioned last week but still am reveling in the content: Why Do Autocracies Build Taller Skyscrapers? which had an even better short answer: Because they can!

Premium for private park access [Within You Without You]

Some Gramercy Park area residents in Manhattan have access to a beautiful 2 acre private park. Many years ago, New York City hired consultants to value direct access to the Highline for real estate purposes. They approached me to discuss the Gramercy Park premium although I’m not sure how they used that or even if they even used my feedback for their analysis of the Highline.

Renters That Want To Rent [When I’m Sixty-Four]

This weekend’s New York Times real estate section has a great piece on people that have the way, but not the will to buy their homes. Remember that roughly two thirds of residents in many urban markets are renters despite the fact that two third of U.S. residents are homeowners. NYC is no exception it is a two-thirds renters market. Manhattan is 75% rental.

And here’s an interesting NYT Magazine read on How Homeownership Became the Engine of American Inequality

Here’s a chart i created on the homeownership rate nationwide. The rate appears to be rising – or at least not falling unabated. Notice the Fannie Mae projection made during the bubble?

Second Avenue Subway Access Problems [Lovely Rita]

Sprinklers accidentally turned on and damaged three escalators at the 86th Street station on the new Second Avenue subway line. We New Yorkers love to complain.

Buying in a building with a pool [Good Morning Good Morning]

I’ve always seen pools as one of those amenities that are nice to think about but few actually use them. If the building is big, then a pool will likely have a nominal influence on your HOA fees. I remember appraising a loft-like townhouse in downtown Manhattan where a roof top pool was positioned directly above the master bedroom on the floor below. I couldn’t imagine getting comfortable with the thought of thousands of pounds of water suspended over me.

No, not one of these.

Forward-Looking Sentiment Cooling Off [Sgt. Pepper’s Lonely Hearts Club Band (Reprise)]

Appraiserville [A Day in the Life]

High-end appraisal lock by AMCs is collapsing

In my own practice, we are seeing some rumblings on the AMC front that is encouraging for our industry. Because these actions were fueled by upper management of banks, they could even be seen as a “tipping point” for the AMC stranglehold on the appraisal industry.

  • 3 major Wall Street investment banks that handle a lot of residential mortgage volume have called me to warn my firm to expect significant work volume from them soon. They are either not renewing their AMC agreements or requiring their AMCs to create high-end appraisal groups that cater to high-end mortgage loans. The blowback from their own client base has been significant and they needed to take action. Apparently, all those AMC analytics run on crappy appraisals don’t take the place of competent appraisers with local market knowledge.

  • 1 major wealth management banking group that is locked into AMC agreements from their larger retail group has formed a high-end review group so that the same people that review the slog presented by AMCs aren’t the same people who review high-end appraisers in specialized markets. So far they have been very refreshing to work with. We no longer get stupid requests that wear us out; i.e. “What does a doorman do in a condo building?” and “Do you really think this co-op is worth this amount?” We were close to the point of firing this long time client for demeaning addenda requests.

From the Desk of Dave Towne: Your Appraisal Signature

For excellent periodic insights, send appraiser Dave Towne a request to be added to his email distribution list: dtowne@fidalgo.net and tell ’em Jonathan Miller sent you.


Yesterday (5/17/17), a CA based ‘low echelon’ AMC sent an email to APPRAISERS requesting REAL ESTATE AGENTS upload their signature to the AMC website, for use in BPO’s.

Many appraisers began circulating messages about and questioning this request, and the blogosphere and forums are now filled with various comments. That’s excellent, because appraisers were paying attention.

This morning, a manager with this ‘low echelon’ AMC issued a retraction and apology, saying that the message was not meant for appraisers.

The problem with this situation is a number of appraisers are “dual licensed,” meaning they have BOTH a real estate sales person’s license in their state, plus an appraiser’s license. Some of these licensed appraiser people may in fact do real estate BPO’s for extra income.

The other major issue with this is apparently this ‘low echelon’ AMC thinks it’s perfectly acceptable for any REAL ESTATE AGENT to willingly fork over their signature, separately, irrespective of any actual BPO performed on behalf of this ‘low echelon’ AMC.

Appraisers are reminded that USPAP’s Ethics Rule, Management section (Pg 9, lines 276-282) clearly states that the APPRAISER is responsible for exercising due care to protect the unauthorized use of the APPRAISER’s signature.

One problem with unencrypted digital signatures – which are nothing more than an ‘image’ – is the signature can be removed from a PDF or the actual signed report if it is sent in native software. This is one key reason why I have major concerns about using the AppraisalPort delivery process. AP can, and often does, remove and re-use the appraiser’s signature when converting reports to the AP .env format when making the ‘new report document’ sent to lenders.

By the way, the .xml data sent with UAD reports does not have the signature [embedded]. But the signature is on the PDF report that accompanies the.xml.

Zillow’s Zestimate Under Siege

Phil Crawford Spews Out Verbiage That Makes Us Smarter

As a fan of Phil Crawford’s Voice of Appraisal, I signed up for his $4.99 monthly subscription because it’s not just his weekly must-listen show. He also shares some suggested verbiage for appraisers to address various issues they run into. This verbiage came out today:

The appraiser understands that the subject property may have a publically reported estimate of market value known as a “Zestimate”. The real estate technology firm known as Zillow uses an algorithmic propriety formula to compute this value. It is important to note that Zillow makes the following statement on their website about this product: The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:

• Getting a comparative market analysis (CMA) from a real estate agent
• Getting an appraisal from a professional appraiser
• Visiting the house (whenever possible)

The appraiser performed a detailed market and valuation analysis within the appraisal assignment. The opinion of market value is based on applicable and peer reviewed and accepted market data and not on a “proprietary formula” that has not been reviewed or verified by the appraiser.

Tom Horn Gives us Zestimate Artwork to Cherish

I’ve included a number of links below to the Zestimate Lawsuit – actually including two for Kenneth Harney’s syndicated column. But this was really an excuse to post Tom Horn’s real estate graphic with a useful description of a Zestimate:

The Outside World Continues to Fail to Understand Our Role in the Homebuying Process

From the Denver Post: Metro Denver’s average home sale price hits record $487,974 in April, even as number of closings cools

“Agents are experiencing a higher degree of cancellations and of contracts falling through,” he said. Part of that could reflect offers from buyers that are going above what appraisers are willing to support.

Willing to support?

Updates from the Real Estate Industrial Complex

Here are some posts over at my forum known as the Real Estate Industrial Complex where I have been chronicling the unfortunate anti-membership activities of AI National.

  • Appraisal Institute Committee (RAPT) Working to Develop Recommendations To Address Neglect of Residential Members

Woody Fincham, SRA, AI-RRS penned a summary piece on this effort in Joan Trice’s Appraisal Buzz site yesterday. His public reputation is one of absolute loyalty to the policies and practices of AI National, so it invites analysis to make sure a balanced message is conveyed.

I’ve written about this residential committee before, here on REIC. Here are my thoughts after reading this post. I’ve broken it down into two viewpoints; cynical and optimistic.

Cynical Viewpoint

— The title of Woody’s blog post Appraisal Institute Addresses Residential Appraisers’ Issues is weakly worded. Full disclosure – Woody and I have a history. He has been critical of me in social media and behind the scenes with people I know. But still, I respect anyone who enters the arena of discourse at a seminal moment in our industry’s history. I just wish he would rely on facts and not simply go with the default storyline of AI National. Critical thinking as a lucrative appraisal skill can apply to everyday life including the actions of a trade group or professional association. His post title choice infers that AI National is in the middle of resolving residential membership issues. They are not – to my understanding from Woody’s recent email to me. Granted the committee has already been getting together to create recommendations for AI National to consider. This is great news. However, I don’t believe AI National has “addressed” anything yet and hopefully, when they do, they will tell their members. Better title: ‘Appraisal Institute Will Review Input From New Residential Appraisers Committee.’

— Quoting from his blog post: “Appraisal Institute research shows that the number of licensed U.S. appraisers has declined nearly 23 percent since 2007, a drop of approximately 3 percent each year.” Unfortunately, the membership decline of the Appraisal Institute has fallen by 35% over the same period – relying on AI National statements and documents on their website (facts). The decline in membership can be seen in charts from an earlier post on REIC. In other words, the rate of decline of membership of AI National has been more than 50% faster than the appraisal industry itself since 2007. Because AI National membership decline is faster than market forces facing the industry, it is reasonable to suggest that the excess decline is due to the mismanagement including the lack of attention AI National has provided to their residential members.

— Specifically, Woody gets passive-aggressive by lecturing bloggers like me with the “noise in the blogosphere” comment. The “blogosphere” on this issue is essentially me and a handful of others because we are the only people blogging about this issue. He pulled out an old family chestnut saying we (the blogosphere) are a bunch of whiners because we aren’t doing something about the damage done to the SRA designation (also see Brad Bassi’s eloquent response in the original post).  It looks like he forgot to consider that if it weren’t for my “whining” back in December with my “taking” post and Jim Amorin’s subsequent trip to Dallas to pause the “taking” action due to the massive organizational backlash, then Woody wouldn’t be on this residential committee because it wouldn’t exist, because Jim Amorin wouldn’t have been pressured to suggest it, and therefore Woody wouldn’t have felt the need to lecture us on not taking action.

— Let’s remember that the Appraisal Institute’s lobbying thrust (advocacy) in 2016 was towards alternative valuation standards and was to the tune of at least $100,000 based on public disclosure filings. As far as we can tell – and their silly press releases aside – the key lobbying efforts were centered on the fight for an appraiser’s right to switch off and on their license to take $25 evaluation assignments. Jim Amorin, Bill Garber and Scott DiBiasio of AI National feel strongly that all their residential members want the option to do evaluation work and don’t believe it damages the value of the SRA and the standing of appraisers in the industry. Jim Amorin has formed this committee to provide solutions to stop their neglect of residential membership. Logic follows that because they don’t understand the needs of their residential members as evidenced by the formation of this committee, they don’t realize how Scott DiBiasio’s stealth lobbying effort on a statewide level severely damages the public trust and is a betrayal of AI National residential membership. I hope the committee addresses this specific issue and refutes what Bill Garber inaccurately represented to Congress last fall and what Scott DiBiasio asserted in various state legislatures.

— The same people – literally the same leadership for at least a decade – that have ignored the SRA brand are the same people that are going to implement the committee’s recommendations: all, some or none.

— As the article correctly states, this committee process will be a long slow effort. Unfortunately, the Appraisal Institute is in a state of crisis and doesn’t have the luxury of time.  In all due respect, how can this process not take more than a couple of months if it was of such importance to AI National? AI National is losing membership at an alarming rate. I have been told they spent heavily on their international recruiting and apparently it continues since Scott Robinson just spoke in Serbia. They are also spending on lobbying for alternative standards at a statewide level and in DC.  It feels like they see the end is near, and these are their last ditch efforts but aren’t sharing their strategy with anyone.  When the “taking” policy is enacted on January 1, 2018, as stated, and AI National – in theory – will have nearly all chapters’ money, how much will AI National care about the residential committee’s recommendations? My guess is they won’t need to care because the implementation of this committee appears to be done to appease residential membership during a significant membership backlash. “Throw the residential membership a bone to keep them occupied,” so to speak.

Optimistic Viewpoint

  • The group includes some terrific residential professionals and good people – some of which I have the pleasure of knowing and some others I simply know from their reputations shared by people I respect.

— I agree with Woody’s assertion that the SRA designation holds value to some clients. However one can’t hide behind that assertion and apply it to the whole membership, or otherwise, there wouldn’t be a reason to have this committee. A lot of time and money has been spent by the residential membership to earn their SRA designations. The function of AI National is to create a branding value-add to hold such a designation. Let’s apply “paired sales analysis” to extract the value of the SRA designation. If you took the value of the SRA designation in 2007 and compared it to the value in 2017 –  What is the contributory value between the periods? Are they different? Yes, of course, they are quite different. Why are they different? Because AI National has largely ignored this designation for years relying on decades-early momentum. Running the same old ads isn’t supporting the brand.  I believe it can be revived to a limited degree if AI National gets behind it instead of funding speeches in Serbia and Romania.  However, deep down I suspect it is too late – AI National missed their moment.

The time for lecturing those who criticize AI National is over because to do so is self-serving.  Criticism is the engine that promotes improvement.  Whining about critics like me not having the facts is disingenuous.  Focus on the actual problem and help the membership…now.

I truly wish the committee well and hope they are able to make effective recommendations to AI National to implement immediately for their residential members. The residential designations for AI members that possess them were hard-earned.  I’m with you and hope the committee does a thorough job keeping the membership informed and specifically recommends to AI National how important timely communication is to their residential membership.

The time is now for the committee and roll up their sleeves and get something constructive accomplished for the hard-working residential appraisers in the Appraisal Institute sooner than later.  There isn’t a lot of time left. These efforts are greatly appreciated.  Fingers crossed.

  • Kenneth Harney, syndicated columnist writes: “Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth”

The “Zestimate” AVM results are being tested by the courts as a homeowner (who happens to be a lawyer) sued them over the results. While I don’t know if the accuracy is an issue in this case, conceptually it always has been an issue. I’ve railed about this tool for a decade, specifically because the presentation infers a precision that doesn’t exist. I have been in several articles on the topic over the years relating to my own home’s value including the WSJ. When our market was stable, my home value plummeted 25% almost overnight. When I modified my square footage and number of bedrooms to reflect actual conditions (my house is a 200-year-old historic home) the value of my home increased 5 fold. I met former Zillow president Lloyd Frink and their chief economist at the time. Stan Humphries in my office to discuss it. Both very nice people who have a strong belief in this tool despite the real estate industry’s concerns, namely from appraisers and agents. Zillow’s response to me on this issue was along the lines of “the consumer is smart enough to know when the results are off.”

Now that the AVM has been in use for more than a decade, it is ubiquitous. And the fact that it still continues to be presented as rounded to the nearest dollar, infers precision.

  • Stephen Wagner, MAI, SRA, AI-GRS justifies implementation of “Taking” policy on January 1, 2018, saying vast majority of AI Chapters want AI National To Take Most of Their Money.

The following feedback was just shared with me by an attendee.

The Regional 8 meeting was on Saturday. That is generally composed of Central Texas, El Paso, North Texas, South Texas, Houston and Austin. In short nothing has changed with respect to AI. Beta testing will begin in the next few months with some chapters for the new policy and most larger chapters are not. One stat that Stephen Wagner provided is that “only” 20 % of the chapters do not like the policy. Well that means nothing – the chapters who do not want the policy “as is” are the large chapters with the highest number of members. So if some chapters need the AI Mothering FINE. But those of us who do not what AI to provide this mothering want an opt in opt out provision. In short after many of us telling them “they owe the membership more than they giving, provide this extra provision and that their arrogance is going to be the final straw that puts us down – they refuse to acknowledge these issues!! I am totally ashamed of our leadership and embarrassed at what this is doing to our reputation nationwide.

As a reminder, Stephen Wagner is part of the inner circle of leadership that is driving this train wreck. He is also the co-chair of the Residential Appraiser Project Team (I addressed this previously in REIC on May 16, 2017). The silliness of the 20% figure either disqualifies him as co-chair as a defender of the leadership status quo, or it makes the committee’s efforts moot. Or both. How about presenting a list of the chapters that are either for or against the “taking policy” in the interest of transparency, since there is so little trust between membership and AI National?

Good grief.

I remember when Saddam Hussein won re-election with 100% of the vote.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll listen to your Beatles collection, you’ll get some HELP! and I’ll finish listening to all my Beatles music after I play my new Richard Hell & the Voidoids ‘Blank Generation’ album.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Appraisal Related Reads

Extra Curricular Reads

May 12, 2017

The Danger of Drawing Housing Markets With Avocados

I plan to take advice from my friend Nathan Pyle when drawing my next floor plan for one of my appraisals. I’ll simply insert a bubble that says “Hi! I’m the kitchen sink!”

Nathan W. Pyle

But if you are inclined to draw, make sure you are very careful with avocados or you won’t be able to. Prices are booming…

… but so are avocado-related trips to the emergency room.

Got it? Now back to drawing the market.

Elliman Report: Manhattan Brooklyn & Queens Rental Markets

Douglas Elliman published our monthly rental market research on the rental market this week. The April 2017 Elliman Report on Manhattan, Brooklyn & Queens is part of our expanding report series I’ve been authoiring since 1994. The market continued to show significant polarization by being soft at the top and strong in the entry-level. One of the easiest ways to illustrate this phenomenon is comparing doorman and non-doorman median rental prices. While there is a lot of overlap in property types, this breakout is literally a 50/50 split.

Here’s my take on it (I am making up for taking band in high school).

although Bloomberg presents a much better version with our data…

This chart made it to the prestigious “chart of the hour” on the Bloomberg Terminals

…and was the 8th most emailed (9th most read) on the Bloomberg terminals world wide.

Here are some of my favorite Manhattan rental charts we created this month.

Streeteasy Premier Agent is not leveling the playing field

The Real Deal magazine has been going after the new “Premier Agent” product that caused an uproar in the broker community because the actual listing agent was hidden from view and only those agents that paid to be on the site would have their names adjacent to the listing. In Konrad Putzier’s column this week, he explores this concept further. It was very odd to see Streeteasy stand by their position given the unethical nature. Finally they acquiesced by creating a navigation path to get to the listing agent. What I originally loved about Streeteasy before it was acquired by Zillow, was their neutral position in the market. They built a better mousetrap than the individual brokerages to display listing information and as a result, they became ubiquitous. Now they seem to recognize their lack of competitors and continue to figure out new ways to screw up the site over time.

In real estate today, there are magazines, events and cable access shows where the speakers, or moderators “pay to play” and as a result, the content sucks because the product is not the best that can be offered and the only people that view it are those that paid to play. Streeteasy seemed to ascribe to that model by hiding the listing agent.

The program results in “agents getting opportunities & consumers getting choice,” Spencer Rascoff, CEO of Streeteasy parent Zillow, tweeted last week.

whereas I contended that

“This concept of leveling the playing field is very misleading,” said Jonathan Miller, CEO of Miller Samuel. “Anytime you pay to play, there is no factoring in competence or local market knowledge. It has nothing to do with the playing field. It has everything to do with who has the most money to pay to be in front of the consumer.”

And that, my friends, screws the consumer since they don’t understand the nuances of who is listing the property. I understand Streeteasy needs to make money, but presenting content and expertise transparently to the consumer is just as important.

Why we won’t see meaningful housing related policy change soon

Politics and personal feelings aside – whatever your views are, Josh Brown, CEO of Ritholtz Wealth Management makes a compelling case as a regular on CNBC Fast Money that the Trump Trade is over. The market has already decided, based on actions, that the current administration, with all the political distractions, isn’t likely able to follow through on their promises this year.

To housing, that suggests there won’t be a big tax cut, no singificant increase in interest rates, no GSE reconfiguration this year.

The Housing Recovery That Wasn’t

For many U.S. housing market observers, the benchmark determinant of whether we got back to zero has been the S&P/Case Shiller Index. My extreme distaste for this index aside. Only recently has the index exceeded the 2006 peak – that we dug out of the hole we fell into.

Based on a compelling analysis by Trulia, we aren’t quite there yet. For example, home prices in NYC metro are largely below 2006 prices. You can see how the coastal U.S. severly lags price recovery of the central U.S.


Trulia looked at income and home value recovery in this interactive chart its extremely compelling.


The Retail Real Estate Apocalypse

Just walk down a street in the downtown section of your town and take a look at the vacant storefronts. There are probably a lot of them. There is an interesting shift that is occuring. Consumers have been drawn to new urbanism housing trends, you know, walkable cities. Yet the retail that gives them something to walk to is evaporating in front of them.

It’s being called the “Retail Apocalypse” since 90,000 jobs at brick and mortar retail have been lost since October.

Yes, Amazon has played a role, but Lois Weiss, retail journalist maven, provides another nuts and bolts view in her Bisnow column: Retail Is Being Manipulated To Live Another Day

In this Bloomberg Gadfly piece, you can see that department stores are being crushed.

Other Research of Interest

Lower Manhattan Real Estate Market Overview Q1 2017 – This is a study on the economy in lower Manhattan from the Downtown Alliance. I provide them the residential rent and sales data research from my work on the Manhattan sales and rental reports for Douglas Elliman – conditions continue to improve.

Knight Frank Prime Global Cities IndexKnight Frank is a global real estate services firm that has an alliance with Douglas Elliman. I provide housing data for this particular report in markets that I cover in our Elliman report series. Their graphic designers must be on steroids. It’s a fascinating report.

Autocrats and Skyscrapers: Modern White Elephants in Dictatorships: This a fascinating white paper on the proliferation of tall towers worldwide. I discovered this through Citylab, which does great job discussing the phenomenon and bringing in other insights from the Council on Tall Buildings and Urban Habitat.

The trend is staggering…

But the Citylab article provides the best answer in the subtitle:

Why Do Autocracies Build Taller Skyscrapers?
Short answer: Because they can!


Earlier in these Housing Notes, I talked about a Zillow/Streeteasy product called Premier Agent that caused a firestorm in the real estate brokerage community. They were ommitting the actual listing agent from properties that appeared on the site and only presented broker contacts adjacent to it that paid for placement. They eventually compromised, but I was struck by how hard they defended a practice that was clearly misleading the consumer. Being a disrupter as Zillow is, doesn’t mean they have to be unethical. Think about Napster and Uber for example. Now Zillow is in the spotlight again for their “Zestimate” product which has successfully “normalized” AVMs as something everyone can rely on even though they repeatedly say it is not an appraisal.

Zillow Gets Sued Over Zestimates

I linked out to this lawsuit in last week’s Housing Notes but it is starting to snowball. Now columnist Ken Harney writes a great piece on the lawsuit and Phil Crawford landed an interview with the plaintiff, Barbara Anderson, who also happens to be a lawyer.

Zillow says:

Zillow’s website prominently disclaims its “Zestimates” are not appraisals, but are merely computer-generated estimates intended to help those looking to sell, buy or refinance a home gain a “ballpark” idea of what a house may be worth. She said Zillow’s estimates primarily rely on public information, but can be adjusted based on information homeowners may provide themselves, to provide key details and information, such as square footage or completed home renovations, that Zillow could not otherwise know.

My key issue with the Zestimate is how they present it. A Zestimate on a house is presented to the dollar. It infers a precsion that doesn’t exist. I’ve been saying that for a decade including in meetings with their president early on and other executives, as well as in this WSJ article back in 2007 when the Zestimate screwed up the value of my home. When I edited my home attributes to correct public record, my value at the time increased 500%. I liked that number better but I wasn’t on drugs.

The SEC is Looking at BPO Inaccuracy in Homebuilder Valuations

Here’s a short clip on whats happening from Bloomberg Radio.

Sports Aside: Derek Jeter Thanks New York

While I don’t bring sports into Housing Notes very often, there is a very good website called The Players Tribune. It’s got a lot of great stories about the trials and tribulations of professional atheletes in their own words. Derek is reportedly close to buying the Florida Marlins and I think he wanted to make sure he didn’t snub New York in the process. I watched him play for two decades. I love this guy.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll eat more avocados, you’ll sketch coffee cups and I won’t fall asleep in court.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

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May 5, 2017

Those Blue Turtles Dreamt About Housing

I’m trying to be a little more careful about what I eat these days. Ok, truth be told, not really, well sort of. It’s hard to concentrate on the important stuff like the housing market when we don’t have the proper utensils to make our sandwiches. There’s a metaphor for housing in here somewhere (See Sting listing further down), but I’m famished.

Here’s a matrix table on sandwich alignment that might help organize your thoughts:

h/t @matttomic via @flowingdata

Full disclosure – I classify as a radical sandwich anarchist.

Utensils are key…The Frork (spelled correctly) – I need one of these utensils.

Ok, on to the useful stuff.

The Elliman Market Report Series Gets Mansion Global’s Attention

I’ve been authoring the expanding Elliman Report series across their U.S. market footprint since 1994. Real estate brokerage firms are often afraid to be candid about market conditions with the mantra – it is always a good time to buy – yet that does no one any good. Buyers won’t buy, and sellers are anchored to market conditions that only exist in their mind. MG writes about it in Good Market Reports Are Page Turners For the Savvy Investor

The housing market is heartless and unrelenting like the cyborg in The Terminator as described by the Kyle Reese character:
You still don’t get it, do you?

He’ll find her. That’s what he does. THATS ALL HE DOES.

Here’s a great recap by Jay Parker, CEO of Douglas Elliman in South Florida:

“Our market reports are something that buyers can use to really understand where opportunities are arising, and get a sense of how they need to adjust their expectations to the current market conditions,” said Jay Parker, the CEO of Douglas Elliman’s Florida Brokerage. “While we know that most real estate decisions are driven by emotion, these reports can help buyers make a more sophisticated, data-driven purchase.”

Thanks, Jay!

Connecting and Disconnecting With Reality

We continue to see more and more high-end sales proving the point that there is demand, but only at the market price. Sellers are traveling farther to meet the buyers at market levels. While this is an obvious statement, it hasn’t been part of the seller dialogue for several years.

  • $85M David Geffen Malibu, CA house just sold for $85M, but asked $100M a year ago.
  • $38.5M Celine Dion waterpark-like Jupiter Island, Florida house just went to contract after a 47% price cut from the asking price of four years ago.
  • $28M Beekman Place Townhouse Manhattan, NY went on the market for just under $50M in 2014, to $37.5M in 2015 and now $28M in 2017. Hint, the luxury market has not fallen by 44% since 2014. Seller sentiment was wildly over-optimistic in 2014. I appraised this property for different prior owners a few times a long time ago. There are impressive river views for a townhouse.

Oh, one more.

$56M Sting listed 15 CPW condo for double what he paid for it in 2008. That sounds outrageous at the onset, given my ranting about aspirational pricing. However, I took a look at every original sale in the building that had a subsequent sale or 2 or 3 with the last one in the years 2014-2017. Those condo sales sold for an average of 116.9% or a little more than double the original purchase price. Perhaps that was what all those blue turtles were dreaming.

Photo Credit: Thinkstock

In a semi-related topic, when you walk the streets of Manhattan, and most towns in the outlying suburbs I have visited over the past year, there are a lot of vacancy signs to see. The massive shift to online provides – namely Amazon – is crushing the retail market. Secondly, there has been a multi-year run of investment property sales with insanely low cap rates because of the shortage of inventory. Many investors with cash that burned a hole in their pocket are now forced to jack up the retail rents to justify their purchase. The problem is – their asking rents are significantly disconnected from what the market can support. During a recent NYC real estate conference, a sarcastic comment was made as only a New Yorker would say on retail rents:

But Billy Macklowe stole the show with his thoughts on the retail market. Though other landlords have taken the “Fifth is forever” approach, Macklowe offered no such comfort. “I think retail is fucked,” he said. “Plain and simple.”


Gentrification Measurments

On Richard Florida’s Citylab site – one of my favorite regular, go to’s – there is a fascinating post on gentrification, and specifically New York City based on research from NYU Furman Center. The study helps explain the significant changes to the city over the past 15 years: Focus on Gentrication.

Look at the percentage change in the number of business from 2000-2015.

While we’re on the topic, here’s a pretty cool video by Public Square NYC on the 2020 Manhattan skyline.

Cash sales are all around us

I can get pretty snooty about Manhattan’s nearly 50% market share of cash sales every quarter with very few distressed investor cash purchases. The implication of cash sales in most housing markets, however, infer distress.

According to ATTOM as reported in REALTOR Magazine:

Cash sales made up about 30 percent of all single-family and condo sales in the first quarter of this year, according to ATTOM Data Solutions’ First Quarter 2017 U.S. Home Sales Report. That is well below their peak of 44.7 percent in the first quarter of 2011 but higher than the prerecession average of 20.4 percent from 2000 to 2007.


Streeteasy (Zillow)’s Premier Agent Program Gets Tweaked

One of the tragedies of the real estate brokerage industry is that they held on to their Gatekeeper status for too long and it ended up creating opportunities for others. Streeteasy evolved into the defacto Manhattan MLS, but since its acquisition by Zillow a few years ago, it is slowly being Zillowized, by eliminating cool features and inserting annoying features. Recently there was an uproar about their installation of the Premier Agent service which was done in such a way that it did not show the consumer who the listing agent was. This prompted a great read by The Real Deal New York that laid it all out. However, Streeteasy succumbed to broker outrage and changed the linkage issue that gives the consumer a link to the listing agent, so it looks like this crisis has been resolved for now.

The Architect of Hollywood

I’m a regular listener of 99 Percent Invisible, and this podcast about Paul R. Williams was fascinating [Click on the graphic].


My advice to all appraisers…This week I testified in DC as an expert in litigation based on the New York housing market – no appraisal was done for this assignment and no details of the case can be shared, but I crushed it. I think every appraiser needs to testify at least once in their career – hopefully early on. You see the appraisal process much differently when a lawyer is asking you to explain yourself. There is a clarity that washes over after the first time. Throw yourself into it. Through repetition, you deaden your nerve endings, and you get immersed in a lucrative appraisal discipline. Personally, I love it. The other thing you need to do is read about the profession all the time. Our industry has been beaten down for years, but I think a lot of that has to do with not being aware of the upcoming regulatory changes and the activities of industry institutions since those such as AI National and AMCs count on your complacency.

One of the best ways to hone your appraisal craft is to read about problem-solving from your peers. Not about byzantine rules, but how to problem solve each unique valuation situation you face. Nearly every week I link out to Ryan (take a knee) Lundquist’s blog and Tom (blogging for your noggin) Horn’s blog posts for excellent insights. I tend to be a little macro in Appraiserville, but wow, these guys drill down on front line appraisal stuff like nobody’s business. Sign up for their weekly emails in the links at the bottom of these Housing Notes. I learn a lot from them and you will too.

AI National’s Web site log-in for members was down this week

The log-in for members on the AI website was down from Wednesday until a few minutes ago (Friday morning). Everyone has technology issues. However, remember that this is the same organization that is going to “take” chapter funds to solve a problem that doesn’t exist. I sure hope their site doesn’t go down when a chapter needs some of their funds to pay bills.

Lawyer: Zillow ‘Zestimate’ illegal appraisal hampering home’s sale; Zillow: Only estimate, not appraisal

I met one of the founders of Zillow at a party the day before they launched more than a decade ago. The Zillow name came from “Rhymes with Pillow” i.e. your home. I’ve always had a huge issue with the “Zestimate” because it infers an accuracy it doesn’t have. The voyeurism can be fun, but when the results are zeroed down to the dollar, it can become an accepted source of value by the consumer masses. Now someone has taken issue with that and are suing Zillow.

Phil Crawford has an interview with the plaintiff on the upcoming free Wednesday edition of Voice of Appraisal. Fascinating topic. A while back, the WSJ interviewed me because of my Zestimate (I have a 200-year-old historic home), was 5x what it was optimistically worth. If I was uninformed about my market, I suspect it would take me years to resolve my anchoring to the inflated number. It’s hard enough to de-anchor a high value when the Zestimate is 10% too high let alone five times too high.

January 7th is National Real Estate Appraisers Day

Every appraiser needs to subscribe to Dave Towne’s musings on our industry. Send him an email (dtowne@fidalgo.net), and he’ll add you to the list.

If the date selected for the appraiser day becomes ubiquitous, it’ll help me remember to get a birthday card for my wife (kidding!). Dave writes:

Texas appraiser Mark Paulson has submitted an application to the National Day Calendar™ web site to get Jan 7th on their calendar as an official day to recognize appraisers. I found his posting about this on The National Appraisal Coalition Facebook page.

Let’s get behind this effort! Re-send and re-post this message to your appraiser buddies and other bloggers, web sites, trade journals, etc.

While this might seem somewhat tongue in cheek, this calendar is used by media folks across the US to help publicize a variety of ‘days’ each year. Being on the calendar is a good way for the average Joe & Jane Public to get a better understanding of what we appraisers do in their communities, because some media outlets may want to talk to appraisers in advance for inclusion in stories about our work.

Here’s a link to the calendar: https://www.nationaldaycalendar.com/january/

If Mark sees this message, please keep us informed about the process to get accepted. I don’t see a way to support the effort until the Calendar web site posts a message there to ‘vote’ on inclusion.

Coester Chronicles: Appraisers Get LESS THAN HALF The Apraisal Fee

This week, an appraiser received an order from CoesterVMS, the AMC run by Brian Coester who is being sued by Mark Skapinetz in Georgia for allegedly hacking Mark’s email. I’ve redacted it for privacy but to illustrate the way the fee is being handled.

Here’s how the appraisal fee gets parsed out.

  • Appraisal Fee: $790 – Amount paid by borrower
  • AMC Fee: $445 – Coester VMS gets 56% of appraisal fee paid by the borrower for maintaining a web site that tracks appraisal status and reviews the report when delivered.
  • Appraiser Fee: $345 – The valuation expert gets paid 44% of the appraisal fee paid by the borrower to apply their local market knowledge to the collateral the lender is using for the mortgage that will likely be sold to a GSE and guaranteed by the taxpayer in the form of a federal backstop.

In other words, banks and mortgage company hire this AMC because they place more value in administration, rather than the expert taking the risk and coming up with a professional opinion of value to make a lending decision. This incorrect emphasis is somehow acceptable to the banking system.

I remember when HVCC went into effect on May 1, 2009 (eventually sunsetted into Dodd-Frank) and the justification mantra for banks and AMCs was a combination of cost-savings and a firewall. But it looks like

  • the consumer is being screwed because they are overcharging for unnecessary bureaucracy ($445).
  • the appraiser is being screwed because they aren’t being paid the prevailing market rate ($790), i.e., what the consumer is willing to pay.
  • the taxpayer is being screwed by being forced to pay for a future cost during the next banking crisis as competent appraisers exit the profession. Good appraisers are moving on to other things. The quality of AMC work is poor and getting weaker as watered down expertise enters the business.

Here’s the heavily redacted order form:

Translation of above investor comments in red: If you are blacklisted (excluded) by any investor, it is ok to work on this assignment if you aren’t on the list of this particular investor. Of course you could be blacklisted as an appraiser because you are honest and didn’t hit the number for a previous assignment…or you can be blacklisted because you are a horrible appraiser. Either way, Coester doesn’t care given the presentation on this order form. Coester is simply saying: just tell us whether you are blacklisted or not with this investor in so we know what jobs to assign you. I find this makes the review process of this AMC highly suspect.

Here’s the fee breakdown on the form.

The fact that this fee arrangement is typical is absolutely surreal and unacceptable. Regulators and banks don;t really appreciate how bad the appraisal management process really is.

Updates from the Real Estate Industrial Complex

Here are some posts over at my forum known as the Real Estate Industrial Complex where I have been chronicling the unfortunate anti-membership activities of AI National.

AI Immediate Past President Scott Robinson, MAI, SRA, AI-GRS, spoke in Belgrade, Serbia, on “Valuer Licensing in the U.S. and Lessons to be Learned by Serbia.”

Appraisal Institute President’s Message March 31, 2017 Regarding The Residential Appraiser Project Team

Back on April 10, I wrote a post here that essentially pronounced the residential committee that Jim Amorin proposed was DOA since it had been months since there was any feedback shared. I received a few emails today that shared the month old email announcing the committee. Here is the original header and the specific section of the letter that covers the committee.



Sadly, I believe that this effort is a waste of time. I hope I am wrong. It is a noble attempt by AI members to repair the diluted SRA designation brand that so many worked so hard to obtain.

Now step back and imagine the leadership of a trade group or professional organization asking itself why they forgot about a large contingency of its members for a decade – coincidentally they began to question this past bias against residential appraisers while under siege for the “taking” policy? And then expecting those same leaders to embrace any recommendations from such a committee? Let us remember that the idea to form this committee was by leadership that ignored residential membership during this critical decade.

AI National leadership already knows what to do about the residential membership neglect and the dilution of the SRA brand. The top leadership is not a bunch of children, and there is no magic or complex research needed to solve the residential appraiser void at AI National. It would take AI President Jim Amorin and his handful of executive peers 5 minutes (or less) to include residential within the organizational culture and start moving forward in a meaningful way.

I believe it is simply too late and the residential profession has already passed them by. I can foresee the acknowledgment process by senior leadership morph into a procedural labyrinth, unlike the “taking” policy that was done without effective notice – evidenced by the widespread outrage at the end of last year.

After/If the January 1 “taking” occurs, this effort will be moot – I can’t believe AI National leadership will care about residential once they have control of chapter funds – or the organization collapses as a result of the chapter outrage that will ensue.

A Brilliant Idea

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll dream of blue turtles, you’ll dream of them dreaming about blue turtles, and I’ll finally accept the fact that blue turtles don’t Sting.

See you next week.

Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Appraisal Related Reads

Extra Curricular Reads