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New York Times

Valuing the Light in Your Condo or Co-op

December 3, 2012 | 11:05 am | | Favorites |

Jhoanna Robledo over at New York Magazine squeezes light from my proverbial turnip and the result is a very cool graphic on one way to value light in an apartment in her piece “What’s the Price of Light?” The topic of view have been recently explored and floor level.

Light is perhaps the most subjective of the view-floor level-light trio but this is the logic our firm has used for years (based on the “paired sales” theory that isn’t very practical in an appraiser’s daily life) but I feel it’s a good starting point, and of course it depends on the nuances of each situation.

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Central Park Views Before and After One57

December 3, 2012 | 9:00 am | |

A lot is being made about the value of views these days.

The law of supply and demand is also in force. “If you look at the number of buildings that have a view of Central Park and you look at the shoreline of Manhattan,” Mr. Miller said, “the waterfront is a lot bigger. There’s a much more exclusive nature to having a park view.”

You can be on a very high floor and still lose a significant part of your view amenity as the following photos indicate. Views are nearly always discussed in the context of what is gained rather than what is lost. In NYC, no view is ever guaranteed. These were taken by one of my appraisers from the same spot from a high floor on a building across the street looking directly north over Central Park before and after One57 topped out.

Before

After

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Besides Being Your Personal Responsibility, It Just Feels Good To Vote #Election2012

November 6, 2012 | 12:41 pm | |

I cast my vote this morning and it just felt good. My wife and 3 oldest kids are all voting today. It represents the basic premise of our democracy and what our soldiers have fought and died for. Don’t give %%$#% excuses, just do it.

Check out Nate Silver’s blog FiveThirtyEight (my statistician hero) for updates. By the way, Nate Silver isn’t a witch.

As an added bonus, you’ll get a badge on foursquare by checking into a polling location – that should cure widespread voter apathy immediately, right?


Why Doesn’t NAR Lobby Against Standard Time?

November 4, 2012 | 1:30 pm | |


[click to read about Daylight Savings Time]

We got an extra hour of sleep last night (in theory) as we left Daylight Savings Time.

I came across this post yesterday that got me thinking (more like chuckling), why doesn’t the National Association of Realtors rally public support for shifting the US from using Standard Time to go all Daylight Savings Time in order to promote more housing activity?

Afterall, who wants to get up early and view a purchase or rental property and isn’t housing significant part of the economy? Daylight in early hours benefits farming while daylight in later hours benefits housing activity. Agriculture is about 1% of GDP and housing is 17% to 18% of GDP.

From Wikipedia:

As modern societies operate on the basis of “standard time” rather than solar time, most people’s schedules are not governed by the movements of the earth in relation to the sun. For example, work, school and transport schedules will generally begin at exactly the same time at all times of the year regardless of the position of the sun…if “standard time” is applied year round, a significant portion of the longer sunlight hours will fall in the early morning while there may still be a significant period of darkness in the evening.

Admittedly this idea is way out there, and NAR would be unlikely to lobby this point anytime soon because they would look foolish.

I guess I just don’t like it getting dark at 5pm and I don’t even sell real estate.

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Sandy Language Summary: Snor’eastercane, SoPo and a Sturdy Mailbox

November 2, 2012 | 5:36 pm | |

Remember this mailbox? It’s been through a lot. The photo is of my street in my CT home town, one of many downed trees and wires on my street. It’s been a long work week, especially since I haven’t been able to work much without power at home or work and it’s not nearly been a week since Sandy wreaked havoc on the Northeast US. My family and friends are safe and I feel very fortunate.

I’ve expanded or refreshed my vocabulary since Super-Storm Sandy – here’s my slow wifi, town library recap:

%$$%%!!! Your one word profanity-laden scream (insert word of your preference) when one of your favorite healthy 6-story shade trees falls down next to your house during the storm and you realize the storm is no longer an adventure (incidentally a tree falls really fast, not like in the movies).

OMG – The word you utter when your fireman son tells you about all the near misses with falling trees while they were out on the truck responding to emergency calls while your other adult child is taking pictures of the storm and submitting them to the local paper’s web site.

Boom of Doom – What my friend Michael Gross called the collapsed crane on West 57th Street, which forced the evacuation of his apartment nearby.

Zone A – A FEMA designation that few were familiar with (as appraisers we are) that now smoothly rolls off everyone’s tongue in everyday conversation.

Waterfront – That highly sought after real estate amenity that has everyone wondering if living away from the water would be better. Nah.

Flood – See “Waterfront”

“Coned” – The way a long-time Weather Channel anchor was pronouncing the NYC’s electric utility “Con-ed”

SoPo – (h/t to my friend Dan Alpert) was an overheard description for “South of Power” – Manhattan below 39th Street is without power. Of course, my office is located on 38th and remains dark.

NoPo – My alternative to “SoPo” and it is not location specific – it refers to anywhere that has power.

Electricity – It’s that crazy magical force that makes pretty much everything we rely on actually work and we only notice it when we don’t have it.

Primary (Service) Wire – The name my fireman son gave a large thick black wire – if you touch it while electricity is coursing through it – you catch on fire – incidentally one of these wires is still laying on my front lawn.

Snor’eastercane – The nickname given to the storm coming to our area next week bringing cold weather, snow and rain. Has it’s own twitter handle.

Sandy – A hurricane we won’t forget. Replaces “Back in ’38” with “Back in ’12”

Frankenstorm – See “Sandy”

Super-Storm – aka Mega-Storm. See “Sandy”

Puzzles – Those arcane cardboard pieces of art cut into odd shapes that you try to reconnect when you have no power and have to actually speak to your significant other and your kids.

YES!!!! – The near-expletive yelled with joy when we discovered our boat dock came within 6 inches of lifting over the piling and floating away with our boat. Always have a “YES!!!” “chambered” and ready to use it when your power turns back on.

UPDATE

Treemaggedon – What it felt like to see huge trees down all over our street and yard.

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[Falling Supply] 3Q 2012 Queens Report

October 20, 2012 | 8:00 am | | Reports |

We published our report on the Queens sales market for 3Q 2012.   This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.

Key Points

  • Listing inventory declined, marketing time and listing discount fell sharply.
  • Sales below year ago levels.
  • Overall pricing indicators mixed, prices generally stable.
  • Luxury pricing edged above year ago levels.
  • Condo and 1-3 family sales down, co-op sales are up.
  • Northwest and West Queens showed most improvement.

Here’s an excerpt from the report:

…The third quarter Queens housing market was characterized by stable pricing, falling inventory, sliding sales, faster marketing times and less price negotiability between sellers and buyers. The slide in sales despite record-low mortgage rates was largely due to declining inventory levels and irrationally tight mortgage underwriting standards.

Listing inventory continued to fall. There were 9,052 listings at the end of the third quarter, 12.2% below the prior year total of 10,305. The number of sales followed a similar trend, as lower inventory began to temper sales activity. There were 2,509 sales in the third quarter, 8.5% fewer than 2,743 sales in the same period last year. The monthly absorption rate, the number of months to sell all active inventory at the current pace of sales, was 10.8 months, faster than 11.3 months a year ago but consistent with the 10.6-month 7-year average…

Updates to our Queens data NOW UPDATED FOR 3Q12 and charts will be available soon.




The Elliman Report: 3Q 2012 Queens Sales [Miller Samuel]
The Elliman Report: 3Q 2012 Queens Sales [Prudential Douglas Elliman]

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Recovering From The Use Of “Recovery” In Housingspeak

September 4, 2012 | 2:38 pm | | Public |

Last week I was quoted in a few articles pontificating about the use of the word recovery that I felt was a misleading characterization of the state of housing:

Business Insider (Jill Krasny): JONATHAN MILLER: Don’t Buy The Hype About A Housing Recovery

“We keep throwing the ‘recovery’ word around, but the big numbers are coming from sources being created from the tight market,” he told Business Insider. “Tight credit is causing rents to rise; falling mortgage rates are pushing people to buy.

International Business Times (Roland Li): Good News On The US Housing Market? Not Quite

“The use of the word ‘recovery’ is really inappropriate,” said Jonathan Miller, president and CEO of New York-based appraisal firm Miller Samuel. Inc. “We’re just stabilizing.”

In retrospect, I think some reading this may have interpreted me as being bearish on housing. Well I’m not, I just don’t think use of the word “recovery” is being used properly. Housing will likely slip a bit before it truly improves and I think “improvement” means real stability. “Recovery” means:

an improvement in the economy marking the end of a recession or decline.

In other words, I interpret the word “recovery” as getting better or at least not getting worse. While housing is showing gains in sales and price, it’s too soon for all the hyperbole.

Perhaps many view the word “recovery” as a process such as this great post by Diana Olick at CNBC that covers all the housing bases. I can agree with it being some sort of “process.” However I think the word when used by people in the business of real estate is different than when used by the consumer. I feel strongly that the use of the word implies to the consumer that the housing market will soon return to the heady days of yore (my recent fave saying) and that’s not what is happening.

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[NYT Business Day Live] Luxury Real Estate As Art?

September 1, 2012 | 6:00 am | |


[click to play]

I enjoyed the interview of James B. Stewart and Alexei Barrionuevo by Louise Story (best last name a reporter could ever have), on the topic of luxury real estate in the New York Times Business Day Live video series. Mr. Stewart (author of Den of Thieves – one of my favorite books of all time) penned “The Market for Real Estate Masterpiecesexploring the idea of high end real estate as art based on Alexei’s high end housing market coverage of the past year, including the $100M listing (including the upset interior designer), the $88M sale and the >$90M contract among others.

Here was my take on the “Art as Real Estate” angle in Mr. Stewart’s column:

“When people refer to their real estate as art, they’re really trying to say it’s unique, that it can’t be replicated.”

He said he’s seen the phenomenon not just in New York, but also Miami, London, Los Angeles and other markets where investors “are looking for safety in a world of turmoil and uncertainty.”

But, he said, “they’re confusing price with art. You’d think that titans of industry would be very individualistic about their acquisitions, but at the very top, there’s a herd mentality. You get one or two very large transactions that grab headlines and then it’s like a light switch goes off. In New York, this happened in the second half of 2010, and since then it’s been very intense. The size of what’s happening is unprecedented. How long can this go on? You see this kind of behavior and you have to wonder.”



New York Times Business Day Live August 31,2012 [New York Times]
Common Sense: The Market for Real Estate Masterpieces [New York Times]
Reaching for $100M [New York Times]
Other Luxury Real Estate articles by Alexei Barrionuevo [New York Times]

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[On A1, 5 & Dime] New York Times Cover Story On Woolworth Condo Conversion

August 8, 2012 | 11:12 am | | Public |

A real estate article by Michelle Higgins on the Woolworth Building Condo Conversion: Luxury Living in Old Temple of the 5 and Dime made the cover of the New York Times today.

Not to wear out the use of irony here but the very idea that multi-million dollar homes will be located in the crowned jewel of nickel and dime retail sales is a bit mind boggling in retrospect.

Our company got a nice mention for the Manhattan zip code data we have been been tracking for the NYT for years. They’ve got a nice interface to slice and dice the data.

This is our 10th mention on A1 (I’m a numbers guy so I count everything) and I can assure you it never gets old.

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Why “Pull From Air” (P.F.A.) Is An Appraisal Term, Pig v. Sheep Explained

July 23, 2012 | 11:41 am | | Public |

This weekend I was quoted in the New York Times article “Shooting for the Moon” by Alexei Barrioneuvo which explored some of the crazy prices being asked at the top of the market. Appraisers come across list prices every day that have no rhyme or reason to them.

In providing this quote, I sort of felt like I was in the movie “Babe” which I saw with my kids years ago (admittedly, I liked that movie) sharing that “secret word” that Babe used to get the sheep to talk to him.

I explained the PFA phenomenon as follows:

Within the appraisal industry there is a term for listings based on loose associations to reality, he said: “P.F.A.,” or “Pulled From Air.” As Mr. Miller explains it, “Take the highest sale you can find and apply some methodology in a very subjective way to talk yourself up to this bigger number.”

At the high end of the market, sometimes this approach is successful, but in reality, it is more often successful in new development than re-sales because of the concentrated marketing effort in place and that it is “new” with no benchmark bias already established.

Another name for it (and I just made this up) could be “unprecedented pricing” or UP. Buildings like 15 CPW and One57 in Manhattan and One Hyde Park in London had no real comparable benchmarks and became their own market.


Shooting for the Moon [NYT Real Estate]
Babe (1995) [IMDB]

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Luxury Housing: Does Anyone Really Wear White Gloves?

June 4, 2012 | 3:05 pm | |

This weekend’s New York Times Real Estate article by Vivian Toy about a “white glove” co-op listing got me wondering…do doorman actually wear them? Seems like an incredibly dated uniform requirement that speaks to a prestige symbol of another era.

While I recall seeing whited gloved doorman somewhere during my appraisal travels, it was clearly rare and most importantly, didn’t stand out as a “tell-tale” sign that a building was prestigious. More about coincidence I suppose.

I used Google Street View to get a closer look to verify if the doorman actually wears white gloves, and sure enough, the doorman is wearing white gloves.

Next subject of obsolete descriptions: the “silk stocking” district.

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[NYT] Brooklyn Townhouse Boom, From Brown To Gold

June 3, 2012 | 9:31 pm | | Public |


Market Surge

The cover story in the New York Times Real Estate section this weekend: Brooklyn’s Gold Rush chronicled the jump in prices over the past year. Marc Santora pens a good piece that begins with 3 examples of properties that sold over list.

I crunched the year over year numbers for the piece.

“Even when the most expensive sales are removed from the calculations, Mr. Miller said, the surge in prices in striking.

“The theory was that when the credit crunch hit, you would see home sizes get smaller,” he said, “and that is not what happened in New York.” Across the city, he added, space is king.

The spiraling prices are being driven, in part, by the lack of supply. Despite the rising demand, no one is building new brownstones. The number of town houses on the market this spring is about the same as it was a year ago.”

Fixed housing stock + more demand at higher end of market = price increases for Brownstones



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