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Crain’s New York Business

Crain’s Economic Forecast Breakfast 1-25-07

January 15, 2007 | 12:01 am | | Public |

Greg David, the Editor of Crain’s, New York Business invited me to participate in their Crain’s Economic Forecast Breakfast as a panelist. Of course, as a long time subscriber and a devoted reader of the publication (as well as an opportunity for free food), I accepted.

Greg David: Editor, Crain’s New York Business
Brad Hintz: Wall Street Analyst, Sanford Bernstein
Jonathan Miller: President, Miller Samuel
Kevin Ryan: Internet Executive and former CEO, DoubleClick

Click here to purchase tickets.

Hope to see you there!



Crains New York Business Economic Outlook Chart

January 2, 2007 | 12:01 am | | Charts |

Here’s a chart of mine that appears in the Economic Outlook of the current issue of Crain’s New York Business.

Source: Crain’s New York Business


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Crains New York Business Economic Spotlight Chart – December 2006

December 18, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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Real Estate Media Lesson: Unchecked & Mistaken = Apples & Oranges

December 8, 2006 | 1:13 am | | Public |

There was an article that ran on the Bloomberg Newswire on a recently released market report by Real Estate Board of New York (REBNY) that seemingly contradicted the results in our study for the same reporting period (was released almost 5 weeks ago).

The Bloomberg feed on the article was picked up by the New York Post, The New York Daily News, The New York Sun and covered in Crain’s New York as far as I can tell. The New York Post version was linked to Curbed as well.

The Bloomberg article showed how one of the key stats in the report I prepare contradicted the same stat in the REBNY report…

The two reports supposedly showed the opposite trend in Median Sales Price.

Here’s what was presented in the Bloomberg newswire story that was picked up in the other papers:

REBNY:
Manhattan median sales price increased 6.7%.
The data source was from public record and a confidential survey from their members.

Miller Samuel/Prudential Douglas Elliman:
Manhattan median sales price decreased 4%.
The data source was from public record and collecting data from our appraisal practice.

Reality check

_Correct Stat That Should Have Been Used_
Miller Samuel/Prudential Douglas Elliman:
Manhattan median sales price increased 12.7%.

The Miller Samuel median sales price stat quoted over and over in all the articles reflected the change in median sales price as -4% compared to the prior quarter rather than the +12.7% increase over the prior year quarter like the 6.7% stat from the REBNY report. Both stats showed upward movement over the past year.

Apples to Oranges (Conclusion)

The results show a fairly wide spread albeit in the same direction. This is likely due to difference in the mix of what data was collected.

The idea that the two reports seemingly contradicted each other raised the interest level for its newsworthiness as a story, yet the key point made was in error – the two reports actually didn’t contradict.

Sigh…



Business 360 Forecast: Manhattan’s Mug Is Half Full

November 29, 2006 | 12:01 am | |

As Jason Kidd, upon being drafted to the Dallas Mavericks pro basketball team declared:

We’re going to turn this team around
360 degrees.

About 5 years ago, John Marchant of Business360 approached me to provide information for his forecast of the Manhattan real estate market. The forecast would use information generated during the preparation of our quarterly market reports. He impressed me with his insight and I was even more impressed with his approach to the research as well as his candor.

Business360 is a high-quality information and business services company, underpinned by a unique and flexible resourcing model and large global team of specialists and generalists. This particular report and related forecasts have been covered in The New York Times, Crain’s, New York Observer and The Financial Times.

Here’s their track record:

But their forecast remains a contrarian viewpoint:

Prices are falling in other U.S. markets and the situation in Manhattan is increasingly unclear. Confidence and psychology are important factors in the market and today Manhattan’s market looks to be at a balance point. Supply is up strongly and buyers are holding back, making for a stalemate. Prices have run up very strongly over the last seven years or so, greatly outstripping personal income gains, and many believe prices should pull back to bring them in line. However, a review of prices over a 25-year period, or against the last peak in 1987, suggests that prices have room to rise.

The report is available to download for a modest fee ($99).

However, since John is a better negotiator than I am, I get nothing financial out of the deal, other than a copy of the report and a free round when we go out to bend an elbow.


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Crains New York Business Economic Spotlight Chart – November 2006

November 20, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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Crains New York Business Economic Spotlight Chart – October 2006

October 23, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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Crains New York Business Economic Spotlight Chart – September 2006

September 25, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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[Matrix Zeppelin Series] Coastal, Gentrifying, Negative Light, Overload, Raw Numbers, Get Ugly, Lereah Is MIA, Bonuses, Slowdown Coming, Going Into Foreclosure

September 15, 2006 | 6:46 am | |


This week, there was no hot air in the Zeppelin commentary. In fact it was so heavy, I don’t think it got off the ground. Here’s a sample:

  • It’s interesting reading everyone talk about the inpact of interest rates on the slowing real estate market. “Rates when up .24356, that’s why real estate is slowing” etc. That is nothing! I live in Florida. I paid $3500 for my home owners policy last year. I thought that was too high. I just got my renewal notice. My new premium is $12,500! That’s an increase of $700 per month! Florida and the coastal areas of the US are in a free fall in property values as it is. This new wave of insurance hikes will be a disaster for coastal property values!

  • Are you allowed to say “in a gentrifying area”?

  • I have come to belive all news is presented in the most negative light possible, especially news about the economy. I have also come to believe that most people who post comments to blogs or news stories want the sky to be falling (I don’t know why – but it appears to be the case). I expect that you will be bashed for trying to “keep it in perspective”. [as I suspected, Matrix readers didn’t do that – Jonathan]

  • We can strip away all the information overload and focus in to what real estate pricing is all about which is simply supply and demand.

  • You definitely pinpointed the limited usefulness of the RealtyTrac report in that the comparison should be to the national housing stock that has mortgages. That’s exactly what the Mortgage Bankers Association did in a survey out today, which puts the foreclosure rate for the second quarter at .99 percent — up 1 basis point from last quarter, but down 1 basis point from the same quarter last year. If you have a lot more people taking out loans, as they did in the boom years, the (raw) number of foreclosures is naturally going to go up, even if people are just continuing to default at the same old rate. The real question is what’s the number of homes in foreclosure as a percentage of all loans. The MBA survey did show a pretty good bump in the number of delinquencies on subprime and FHA loans, however (and even prime ARMs), but chief economist Doug Duncan said he doesn’t expect “order of magnitude” increase in delinquencies next year. Companies like RealtyTrac are in the business of selling info about foreclosed properties to investors, and maybe the raw numbers mean something to that crowd — like more opportunities to cash in on others’ misfortunes. Which doesn’t mean their numbers aren’t true. They just, as you say, lack perspective.

  • Here in Southern California, foreclosures (Notice of Defaults, actually) are sky-rocketing. In the first year of this housing market down cycle, the monthly number of NODs is already nearing the worst monthly levels of the 1990’s housing market down cycle. Yes, this is perspective. This is going to get very ugly before the sun starts to rise again.

  • Now that you mention it, Lereah has been MIA for the NAR — hadn’t noticed that. Stevens tenure is about to end, so we soon won’t have him to kick around any more. But let’s give it one more shot. The Washington Post carried a piece last Saturday about (essentially) NAR President Stevens getting caught in the market … um … correction. “his old house in Great Falls has now been on the market for a year at the price of $1.45 million.”What I should have done,” confessed the senior vice president of NRT Inc., parent of Coldwell Banker Residential Brokerage, “was listened to my agent and cut the price by $50,000 to $100,000 early on, and the property would have sold last October.” Or, even better, he said, “I should have listed it a month earlier,” when the market was only just beginning to lose air.” And on, and on he goes. I don’t know what average days on the market is in the DC area, but I bet it is less than 365. And Stevens hasn’t sold yet…

  • I was under the impression that prior to the impending bonuses of 2006, 2005 was also a record year. However, it didn’t seem to do all that much for housing – maybe in the luxury/ultra luxury area, but not overall. We still had a lousy spring. So I can’t see why that would change this year, with inventory so much higher. Besides, don’t all those rich guys own by now?

  • New York’s economy is strong, and people are pouring in. In the short run, therefore, any price decrease would be the result of prices being too high relative to income to being with, and nothing else. I think that may happen. Next year, however, it may also be that weakness in the housing market elsewhere causes weakness in the economy elsewhere and weakness in the stock market, working its way back to NYC. Bonuses will be at record levels this year, but Crains reported on Monday Wall Street’s three-year bull-run is losing steam. “After a terrific first half, earnings are expected to fall 40% in the second half…The slowdown is hitting virtually every trade plied on Wall Street. Stock and bond underwriting volume plunged nearly 50% in the summer quarter compared with a year earlier. The hugely lucrative businesses of advising on corporate mergers and taking companies public are also slumping.” Perhaps, with a slowdown coming, those high flying finanical geniuses won’t blow their bonuses this time around. Naaaah.

  • But you DON’T have perspective until you can answer the question, “What is the impact of NODs (or foreclosures) on the market?” Are they affecting inventory? By how much? What other pressures are there on inventory? The RealtyTrac survey reports 12,506 California homes entered into foreclosure in August — up 25 percent from July and 160 percent from the year before. That sounds pretty serious, right? Well, maybe not if foreclosures were at historic lows. Maybe not if some 500,000 homes change hands in the state every year. Which is not to say that the market’s not soft, especially in particular areas. Inventory in the state is up — CAR puts it at 7.5 months in July, versus 2.9 months same time last year. But what is causing inventory to rise? Is it because more homes are going into foreclosure, or because houses are just sitting on the market because they are overpriced? The bottom line is that the raw number of foreclosures, by itself, doesn’t tell you that much about supply and demand.


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Crains New York Business Economic Spotlight Chart – August 2006

August 14, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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Crains New York Business Economic Spotlight Chart – July 2006

July 25, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


Tags:


Crains New York Business Economic Spotlight Chart – June 2006

June 19, 2006 | 12:01 am | | Charts |

Since 2003, I have provided a chart that appears once a month in the Economic Spotlight section of Crain’s New York Business magazine. Here is this month’s chart appearing in the current issue of Crain’s New York Business.

Source: Crain’s New York Business


Go here for a complete archive of all my Crains’s New York Economic Spotlight charts. They are organized by year.


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