Greenwich CT Pre-Lehman “Reno, Then Flip” Mentality Is Long Gone

February 26, 2016 | 9:41 am | delogo | Charts |

Fairfield County, CT is one of the more recent editions to our Elliman Report series. Greenwich, CT as a submarket has proven to be a market still strongly linked to the heady days before the collapse of Lehman Brothers in 2008 and the beginning of the financial crisis. There remain many owners of high end homes purchased a decade ago that remain value-anchored to those days of yore.

I took a look at the last 15 years of residential sales, measuring the amount of time that passed from a home’s prior renovation to sale. From the late 1990s to Lehman, there was a compression of time from renovation to eventual sale, reflective of the speculative conditions leading up to Lehman. Reno a home, then sell it. During those days, business cards passed out by doctors and lawyers at Greenwich cocktail parties were either “hedge fund manager” or “developer.” Not so much anymore.

Subsequent to Lehman, the late 1990s pattern that preceded the U.S. housing bubble returned by 2010 and has remained remarkably stable since.

4Q15GR-sincelastreno

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Charts That Don’t Make Real Estate Trends Into A Stock Ticker

December 21, 2015 | 12:10 pm | bloomberg_news_logo | Charts |

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If you’re a subscriber to the Bloomberg Terminals, as roughly 350,000 people are (paying $1,600+ per terminal per month), then you may already know there are a half dozen charts on the Manhattan luxury housing market. To be clear, these indices don’t suggest that housing price trends should be presented as a stock ticker.

It’s a good thing too, since the thought of making real estate housing markets equate to stocks was inspired by, and then was crushed by, the housing boom-bubble-bust era 2003-2008.

Here’s why a stock ticker for real estate is a flawed (aka dumb) concept:

  • A stock market moves in the context of nanoseconds rather than weeks or months.
  • Contract data is not available market-wide and if it were, lags the market by several weeks.
  • Closed data used in a ticker would lag the market by months.
  • It implies instant liquidity for real estate holdings.
  • Not all property types see high volume so their trends are extrapolated (and thus diluted).
  • It teaches market participants that short term views on real estate holdings are the norm, the way a stock day trader views the market.

While a daily real estate index can be created with relative technical ease, it doesn’t mean it is a good idea. It infers a level of precision that doesn’t exist and an accuracy based on lagging data that is not understood by users.

Those who push the stock ticker idea either didn’t work through the last cycle in real estate, or they didn’t learn from the experience.

We update 3 charts on the Manhattan luxury sales market and 3 for the Manhattan luxury rental market. I have always defined “luxury” as the top 10% of transactions during a period.

Click on the gallery below to open each of the indices.

bloombergmanhattangallery

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

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

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

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

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


New York Post version
nypost11-19-15

My original version
NYPdraftmedianrent
[click to expand]


Grant’s IRO version
grantschart11-13-15

My original version
msforgrantchart11-13-15
[click to expand]

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Manhattan Monthly Absorption Rate – August 2015

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

8-2015Manhattan [click to expand]

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

Side by side Manhattan regional comparison:

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

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

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


Manhattan Market Absorption Charts [Miller Samuel]

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

August 31, 2015 | 6:19 pm | curbed2 | Charts |

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

Check out my 3CW column on @Curbedski:

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

3cw8-19-2015A10m
[click to expand chart]


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

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

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

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

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

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

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

8-25-2015CSI
[Click to expand]

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

August 23, 2015 | 6:09 pm | curbed2 | Charts |

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

Check out my 3CW column on @CurbedNY:

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

3cw8-19-2015

[click to expand chart]


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

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Bloomberg View Column: Rent Control vs. Keeping Landlords Happy

June 26, 2015 | 10:00 am | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column Rent Control vs. Keeping Landlords Happy.

bvchartrentlandlord

Here’s an excerpt…

The past few weeks have offered a window on the tensions between landlords and tenants in New York’s real estate market. Amid the political machinations in the city and the state’s capital, the New York State Assembly let rent controls lapse, temporarily placing more than 2 million tenants in housing limbo. A tentative deal has since been worked out to extend the regulations for four years but the details are not yet available…

[read more]


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Bloomberg View Column: Want a House? Good Luck With the Down Payment

June 25, 2015 | 10:56 pm | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column Want a House? Good Luck With the Down Payment. This post also went #1 on the Bloomberg Terminal and on the public facing BloombergView.com site for 2 days. Super crazy.

down payment chart

Here’s an excerpt…

Saving for a down payment has long been a big challenge for anyone who wants to buy a home. And it got harder after the financial crisis, as lenders insisted on down payments of 20 percent or more for conventional mortgages, which make up the bulk of the market…

[read more]


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Bloomberg View Column: How Long Before a Home Lists for $1 Billion?

June 25, 2015 | 10:49 pm | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column How Long Before a Home Lists for $1 Billion?. This post went #1 on the Bloomberg Terminal and on the public facing BloombergView.com site for about a day and a half. Crazy.

halfbillionBV

Here’s an excerpt…

When a Los Angeles hilltop home that’s under construction was recently priced at a record half-billion dollars, it looked like a one-off in excess. The same thought occurred to me late last year when real estate investor Jeff Greene, who won big betting against the housing market before the financial crisis, priced his renovated Beverly Hills, California, home at $195 million…

[read more]


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[Three Cents Worth #288 Hamptons] Comparing Price Trends in the Hamptons and Manhattan

June 3, 2015 | 6:25 pm | curbed2 | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Hamptons, at the intersection of sand dunes and real estate in the East End of Long Island, NY.

Check out my 3CW column on @CurbedHamptons:

Now that we’ve crossed over into June, I thought I’d illustrate the price trend relationship between the Hamptons and Manhattan. The former seeing a majority of single family sales and many second home purchases. The latter with a housing market of 98% apartments and single family family sales are a rounding error. Despite the differences in their housing stock, their behavior in terms of price trends has been similar over the past decade…

3cwH6-1-15

[click to expand charts]


My latest Three Cents Worth column: Three Cents Worth: Comparing Price Trends in the Hamptons and Manhattan [Curbed]

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Bloomberg View Column: Costly City Housing Is an Economic Drag

June 3, 2015 | 6:12 pm | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column Costly City Housing Is an Economic Drag.

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Here’s an excerpt…

It’s tough living in a big city — the people, the traffic, the noise. Oh, and did we mention the cost of housing? Contrary to conventional wisdom, high and rising housing costs in the U.S.’s biggest cities are not ideal for an economic recovery. Just the opposite: When housing costs take a big bite out of incomes, it diverts money that could be spent on local goods and services or invested in new businesses that stimulate growth…

[read more]


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