Since housing market trends are all about seasonality, I thought it was interesting that the Manhattan residential vacancy rate seems devoid of such patterns.
What am I missing here?
I was invited by Julie Hyman at Yahoo Finance TV for a discussion on the weakening luxury housing market and some other topics of interest. I’ve known her for years, after a long run at Bloomberg TV, and am excited about her new opportunity at Yahoo.
When I arrived at the studio, the stock market was being battered (down by over 400 points at the time of this broadcast) by the conflicting interpretations of the recent US/China tariff talks and the results Toll Brothers analyst call. It was exciting to be there during the perfect storm. The conversation shifted from what I was invited to cover, to the developing news story.
Yahoo is ramping up live coverage in early 2019 via 100% internet. Judging by their super cool/huge studio and throngs of people working there, Verizon seems very serious about their investment.
There’s a proposal from the FDIC, Federal Reserve, and Treasury Department not to require appraisals for some mortgages under $400,000.
As we say in the petition, this change can impact several groups in particular: consumers, the taxpayers, the housing market and appraisers.
One group not explicitly mentioned in the petition but impacted down the road are real estate agents and brokers. Currently, 12% of mortgages that flow through the GSE (Fannie Mae and Freddie Mac account for 78% of residential mortgages right now) will have their appraisals waived. Those are “PiW” loans or have a “Property Inspection Waiver.” My good friend and appraiser colleague Phil Crawford says on his radio show “Voice of Appraisal” says the acronym stands for “Pissing In Wind” which is more accurate. If the buyer realizes they overpaid for the property, the agents are now the professionals with the bullseye on their back. Liability insurers are already talking about a new target when things go south.
Years ago and again this morning, I heard a real estate agent say – what do we need you (appraisers) for? “The seller and the buyer determined the market value by agreeing on the price.” The problem with this logic is the buyer may not be fully informed (i.e., from an out of market area) and will also mortgage fraud supercharged. Ever heard of straw buyers? Agents must remember that they perceived as biased even with the best intentions and the best ethics because they are paid only if the deal closes. When something goes wrong, they are completely exposed.
The direction that was taken by regulators relies heavily on AVMs (Think Zillow’s Zestimate which is not within 4.3% of the actual value 50% of the time) and “hybrid appraisers” (which removes the appraiser from the actual inspection of properties) to develop a value opinion. The inspection of the property, when done, will rely on non-licensed individuals to fill out a checklist and give an appraiser at a desk the information without any standardization, direct contact or assurance the inspector knows what they are doing. I’ve heard of fees as low as $8 to do the inspection and $78 for the appraiser. As far as I can tell, a full appraisal (inspection and analysis) cost can represent as little as a hundredth of a percent of a purchase transaction.
This petition is for everyone to sign, not just appraisers. Please sign and help bring attention to a pattern we just lived through in the financial crisis. It’s happening again.
Please make your voice known, read about and hopefully sign the petition below:
This interview occurred back on the 18th and was posted on Housing Notes on October 19th in case you missed it.
Robert Frank of CNBC invited me to appear on the show. I’ve been on the show a half dozen times, especially during the housing bubble when I was always interviewed remotely in a dark room with an automated camera. This appearance was the first time on the actual set. The interview with Robert Frank and Andrew Ross Sorkin In keeping with their audience, it was all about the “trade” and focus on pricing which reminded me of the stock market-like thinking of housing from a decade ago. Sorkin asks…
“Should all New Jersey homeowners move to Florida?”
Afterward, I was standing next to Alan Greenspan, former Fed chair, in the makeup room after the interview to take my makeup off. Chatted with Diana Olick as well as I am in now “full name-dropper” mode. Here’s Robert Frank’s intro and then my interview:
I had a nice reflective discussion with Scarlet Fu and Caroline Hyde, reflecting on two milestones in New York City – 9/11 and the financial crisis.
Miller Samuel CEO Says Credit Conditions Haven’t Normalized Since Lehman
September 11th, 2018, 3:48 PM EDT
Jonathan Miller, president and chief executive officer of Miller Samuel Inc., takes a look at the state of the U.S. housing market 10 years after the financial crisis of 2008. He speaks with Bloomberg’s Caroline Hyde and Scarlet Fu on “Bloomberg Markets: The Close.” (Source: Bloomberg)
The Fall 2018 Issue of Elliman Magazine was just released and as usual, I provided a two-page spread showing interesting (my definition, lol) of what is going on in some of the markets under their national footprint. The magazine is well done and a fun aspirational read.
Here’s the full online version of the magazine:
Tags: Elliman Magazine
PBS Nightly Business Report clip
[Story with 2 clips begins at 18:20]
CNBC’s Diana Olick reports on luxury home sales dropping in NYC due to tax laws and fewer international buyers.
It is past the middle of August so it was odd to see that the Wall Street Journal ran a story that covered a new “half-year” report by a brokerage firm on the Manhattan luxury market from January 2018 to June 2018. But it was a good story nevertheless.
Almost two months had passed since that reporting period so CNBC reached out to me in response to talk about our already released first and second quarter Elliman Reports, as a segway to the luxury homebuilder Toll Brothers record earnings release.
More importantly, I didn’t wear a tie at the 30Rock studio interview. Hey, it’s summer.
I enjoyed my sit down with Vonnie Quinn and Shery Ahn on Bloomberg Markets yesterday. The discussion focused on the release of the Elliman Report: Q2-2018 Manhattan Sales that I have authored since 1994 and the Bloomberg story that covered it.
Every seasonal edition, Douglas Elliman Real Estate asks me to provide a visual market update for their magazine in any 5 of the markets they cover nationwide. The following graphic is found in their latest Elliman Magazine.
Click on the following graphic to see my charts in all their majesty.
Tags: Elliman Magazine
I’m a bit late to post this interview but the content is still relevant since it addresses the sales slowdown we are seeing across the NYC metro area. I had a fun conversation with Bloomberg’s Julie Hyman and Julia Chatterley on “Bloomberg Markets.”
I’ve been following Dan Gershburg‘s Twitter handle for quite a while and found it to be a great resource for pretty much everything. He’s a real estate attorney and we got to know each other a little bit over the ultraweb. Eventually he invited me to join him on his podcast. I got to talk with him about a few things outside my usual discourse: my concept of “neutrality” and how I got started (and who doesn’t want to wax on poetic about themselves for 45 minutes?) I enjoyed the discussion and I think you will too.
Tags: Daniel Gershburg
James Nelson, a commercial broker powerhouse who just moved from Cushman & Wakefield to Avison Young, came to my office and interviewed me on the new federal tax law and related subjects for his Globe Street blog column called “The Full Nelson“.
He provided NYC sales volume data for all NYC boroughs but Staten Island – and I combined it with the residential data we collect to see how the real estate types compare side-by-side.