Housing Junkstats Are Today’s Surf and Turf
I’ve always marveled at how many “eye candy” style national maps are pumped out to show us how housing market performance varies across the country. The sheer volume is amazing and we tend to gobble it up. I love the transparency, but I also love pizza AND seafood equally…so where should I live? A key observation of this map  suggests that “…seafood is popular along the coast!” LOL.
And why does consumption of BBQ collapse north of the 36th/37th parallel?…
I just don’t know…
But I digress…
Elliman Report Released: March 2019 – Manhattan, Brooklyn & Queens Rentals
I’ve been authoring the expanding Elliman Report  series since 1994 for Douglas Elliman Real Estate . This rental report is the one monthly series we prepare, everything else is quarterly or annual. In the past 6 months, the relationship between rentals is more linked as softening sales are driving rental demand higher. The market remains addicted to concessions so it will probably be a slow grind to their demise just like their incorporation into the market on the way up.
Elliman Report: March – 2019 Manhattan, Brooklyn and Queens Rentals 
And a chart!!!
MANHATTAN RENTAL MARKET HIGHLIGHTS
“Rental price trends continued to press higher as concessions stabilized and vacancy slipped”
– Net effective median rent rose for the third consecutive month
– Studio and 1-bedroom median rents expanded as larger-sized apartment median rents declined
– The vacancy rate fell year over year for the eleventh straight month
– New leases surged after falling annually for four consecutive months
– Landlord concession market share edged up nominally year over year after falling for two consecutive months
BROOKLYN RENTAL MARKET HIGHLIGHTS
“Rental price trends continued to rise as new leasing activity surged.”
– Net effective median rent rose year over year for the fourth straight month
– Almost three-fourths of new development rentals had a concession while one-third of existing rentals had a concession
– New leases surged year over year at the highest rate in fifteen months across all market sizes
QUEENS RENTAL MARKET HIGHLIGHTS
“New leasing activity jumped across all apartment sizes as landlords pushed for higher rents at lease renewal.”
– Market share of landlord concessions fell year over year for the first time in seven months
– Net effective median rent expanded year over year for the fourth time in five months
– The average size of a rental apartment increased largely from the size gains of 2-bedrooms and 3-bedrooms
– Median rent for existing apartments increased as new development rental prices slipped
Market Report Gauntlet: Q1-2019 Brooklyn, Queens, Riverdale, Westchester, Putnam and Dutchess Sales
A report gauntlet wouldn’t be a gauntlet without a lot of market research on the NYC metro regional sales market coming at out once. Here are the talking points for the region. The full reports can be found in the “Recently Published Elliman Market Reports” links at the bottom of the page.
BROOKLYN SALES MARKET HIGHLIGHTS
“The market pace remains fast, but sales and price trends have started to slip.”
– The number of sales declined year over year for the fifth consecutive quarter
– Listing inventory rose annually for the fourth straight quarter
– Price trends set record highs last fall, which appears to represent a market peak
– Sales priced between $3 million and $4 million were the only price strata with an increase
– Condo sales represented the lowest market share of total sales in more than twelve years
QUEENS SALES MARKET HIGHLIGHTS
“This was the first quarter without a record average sales price in two years.”
– The number of sales declined year over year for the fifth consecutive quarter
– Listing inventory rose year over year for the eighth consecutive quarter
– The first quarter without a record average sales price in two years
– The largest decline in sales was seen in the condo market
– While the pace of the market was brisk, it was the slowest pace in nearly four years
RIVERDALE SALES MARKET HIGHLIGHTS
[includes Fieldston, Hudson Hill, North Riverdale and Spuyten Duyvil]
“Rising price trends continued despite additional inventory coming to the market.”
– Sales declined for the fourth consecutive quarter at a rising rate
– Listing inventory expanded year over year for the third straight quarter
– All overall price trend indicators increased annually for the third consecutive quarter
WESTCHESTER SALES MARKET HIGHLIGHTS
“Single-family sales rose year over year after six consecutive quarters of declines.”
– The number of countywide sales has expanded year over year for three consecutive quarters
– Listing inventory has edged higher year over year for three straight quarters
– Median sales price expanded for the first time in three quarters
– Contracts signed in the first quarter increased from year-ago levels
– All four property types showed more sales than in the prior year quarter
– Luxury single family price trends continue to weaken as luxury inventory expanded
PUTNAM SALES MARKET HIGHLIGHTS
“Median sales price increased year over year for the eighth straight quarter.”
– Listing inventory rose for the second time in three quarters
– Sales and the market pace slowed year over year for the first time in three quarters
– Shorter marketing time on average but with more negotiability
DUTCHESS SALES MARKET HIGHLIGHTS
“Like Putnam, Dutchess median sales price rose annually for the eighth consecutive quarter.”
– Listing inventory increased annually in the three most recent quarters
– The months of supply has been expanding over the past year
– There was a surge in new contracts signed year over year
Shhh, Whisper Listings Are a Thing
This listing type, also known as “pocket” listings , became enormously popular when the luxury U.S. housing market was booming and high-end property owners didn’t need to shotgun blast all the intimate details of their home through large photo galleries. For example, the high-end LA market I cover for Douglas Elliman has more than 20% of the listings above $5 million as pocket listings (outside the MLS). We extracted this metric by matching public record closings with closings in the multiple listing systems. One of the challenges of tracking this phenomenon in the Manhattan market is we don’t have a very accurate market-wide listing system. But most importantly, this article has a chart.
At first glance, this concept seems to short change the seller who will have less exposure to the market by keeping the listing private.
A secret listing probably isn’t the best strategy for most New York homeowners, who would benefit from casting a wide net to attract offers, according to Jason Haber, an agent at Warburg Realty.
However, in the upper price echelons, it still tends to be more by word of mouth anyway.
On a quick side note, Teri Rogers, founder & CEO of Brick Underground , dubbed me “The Data Whisperer” so there’s that. She will be celebrating her 10th year of operation next month. Time flies. Shhh.
Canadian Housing Market Has Been Cooling For A While, Eh?
According to Teranet – National Bank House Price Index , a widely followed housing market composite index, clearly illustrates the weakening national trend. I like to keep tabs on the Canadian housing market, sort of as a hobby (and not because my mother was born in Montreal). The press release  included this observation:
Moreover, in 20 years of history, this is the first time that the Composite HPI drops in a month of March outside a recession.
Over the past few years, it looks like Canada has been catching up  with the rest of the housing world. This is an important development since the Canadian national economy is highly dependent on the housing market .
Several years ago I was approached to author a recurring national housing market report for Canada by a large financial institution but they ultimately decided not to go ahead with the project. Bummer.
Digging Yourself A Hole
No, I’m not speaking to housing affordability, but rather the opposite in this New York Times piece: That Noise? The Rich Neighbors Digging a Basement Pool in Their $100 Million Brownstone  “The extremely loud and incredibly expensive renovations that have shattered a formerly quiet residential block in Manhattan.”
The article is a great read and I found these pictures to be amazing – notice how the house is really just a facade with a deep hole behind it? They must really like to swim. Welcome to Manhattan real estate.
This Week in (Deeply, Awfully, Twisted) Aspirational Pricing
The former home of the Las Vegas mass murderer  who killed 58 people and injured 851 on October 1, 2017, was recently sold to a real estate agent for $305,000  and the funds will go to the victims.
Even in Reno’s largely unaffordable housing market, O’Neill’s bid on Thursday fell far below the home’s most recently appraised value of $367,000. But as a Washoe County appraiser cautioned in paperwork, that estimate was based on “the extraordinary assumption that the value of the property will not be affected by any negative stigma due to the infamous actions of the owner.”
Since the home sold for $305,000, the stigma represented a 17% discount for a mass murderer’s home in an extremely tight housing market. That seems like a very low discount given the scale of the tragedy. In the case of the mass school shooting of 26 children and staff in Newtown, CT , the nearby home of the shooter was leveled and the land left as open space.
In the Las Vegas scenario, the victims received compensation (along with his other holdings) while the stigma on the Newtown property was deemed it worthless (in the context of real estate, not emotion). I’d have to say that even though there would be fewer funds for the victims, I am not a fan of someone trying to flip the house of a serial killer. I’m just guessing here because I don’t cover either market but it sure looks like the discount the broker achieved on sale, was wildly low or it was indicative of the shift in stigma value depending on the tightness of supply. Ugh. Of course, the market will determine that issue down the road when they try to sell.
(For earlier appraisal industry commentary, visit my old clunky REIC  site.)
Valuing Stigma in the Era of Mass Shootings
Take a look at my attempted stigma analysis of the Las Vegas mass shooter’s home above in “This Week in (Deeply, Awfully, Twisted) Aspirational Pricing”
OFT (One Final Thought)
You don’t have to be a basketball fan to watch this. I teared up.
Brilliant Idea #1
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 because:
- They’ll eat more seafood;
- You’ll consume BBQ above the 37th parallel;
- And I’ll write another market report.
Brilliant Idea #2
You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive and it helps me craft the next week’s Housing Note.
See you next week.
Reads, Listens and Visuals I Enjoyed
- Las Vegas gunman’s Reno home sold for $305K [Las Vegas Review-Journal] 
- No turnaround in sight: Morgan Stanley's Australian housing model hits rock bottom [Business Insider] 
- New data shows London's property boom is a money laundering horror [Wired UK] 
- Landlords are exploiting a key loophole to raise rents on thousands of apartments [Crains] 
- Zeckendorf’s lobbying effort signifies REBNY’s waning clout in Albany [The Real Deal] 
- In A Challenged Residential Market, NYC Developers Look For Creative Answers [Bisnow] 
- Mary Sendek’s House Over Time [Places No More] 
- Inflated Credit Scores Leave Investors in the Dark on Real Risks [Bloomberg] 
- U.S. Property Taxes Levied on Single Family Homes in 2018 Increased 4 Percent to More Than $304 Billion [ATTOM Data Solutions] 
- That Noise? The Rich Neighbors Digging a Basement Pool in Their $100 Million Brownstone [New York Times] 
- Saint Jane versus the Nimby – Skynomics Blog [Building the Skyline] 
My New Content, Research and Mentions
- NYC Renters Move in Search of Sweeter Deals as Rents Keep Rising [Bloomberg] 
- Westchester County Real Estate Report [CBS Local] 
- NYC landlords get 'aggressive' at lease renewal time, causing renters to make a move [Brick Underground] 
- Report: Brooklyn's record prices fade in the rearview window [Brick Underground] 
- Why Brooklyn and Queens buyers are "camping out" [The Real Deal] 
- Westchester real estate breaks a bad streak [The Real Deal] 
- Manhattan tenants are pushing back against landlords’ raising rent [The Real Deal] 
- Hesitant Would-Be Buyers Give Brooklyn Rental Market a Bump [Mansion Global] 
- Westchester Homebuyers Come Back Now That Tax Rules Are Clearer [Bloomberg] 
- 5 hotspots for newbie homebuyers on a budget [Fox Business] 
- Struggling to Sell Your New York City Apartment? Try a ‘Whisper Listing’ [Bloomberg] 
- ¿Es el aparcamiento un bien de lujo? En EEUU una plaza llega al millón de dólares [MSN] 
- Ritzy Rentals: America's 10 Priciest Neighborhoods for Apartment Dwellers [Realtor.com] 
- 50 cent's $10 million dollar home just sold for $3 million – reminder why one shouldn't overdo questionable renovations [Luxuo] 
- Pricing Co-op, Condo and HOA Units – What the Market Will Bear [Cooperator] 
- Price Falls in Prime Central London Slow to Lowest Rate Since Brexit Referendum [Mansion Global] 
Recently Published Elliman Market Reports
- Elliman Report: Brooklyn Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Queens Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Northwest Queens Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Riverdale Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Westchester Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Putnam & Dutchess Sales 1Q 2019 [Miller Samuel] 
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 3-2019 [Miller Samuel] 
Appraisal Related Reads
- In Real Estate, Sometimes Less Is More [Cleveland Appraisal Blog] 
- 4-11-19 Newz: USPAP 2020-2021 – Appraiser Experience – Mortgage Reform [Appraisal Today] 
- Is The Agent Liable If No Appraisal Is Done? [Birmingham Appraisal Blog] 
- The booming FLAT market & rate addiction [Sacramento Appraisal Blog] 
- Why do I feel like somebody’s watching me? [Consumer Home Value] 
- Natixis boss is a real estate rock star [rew-online.com] 
Extra Curricular Reads
- The curious border dividing pizza and Mexican food popularity [Pudding] 
- 7 ways to store your bike inside your NYC apartment [Brick Underground] 
- Lateness isn’t a sign of disrespect [Medium] 
- Charles Van Doren, a Quiz Show Whiz Who Wasn’t, Dies at 93 [New York Times] 
- For One Former All-Star, The Hits Stopped Coming [FiveThirtyEight] 
- Are You Overdosing on Caffeine? [OutsideOnline] 
- Goodbye “moderators,” hello “audience voice reporters”: Here’s how The Wall Street Journal is refocusing the comments to incentivize better behavior [Nieman Lab] 
- The Death of an Adjunct [The Atlantic] 
- New York City to pass water tank reforms [City and State NY] 
- Questlove's Vegetarian Philly Cheesesteak Won Over Philadelphia at Phillies Ballpark [Esquire] 
- 'One of the worst inventions is the shared calendar' says Basecamp CEO [CNBC] 
- Three Men Vanished from a Scottish Island 120 Years Ago and People Are Still Looking [Vice] 
- T. Rex: The Slider Album Review [Pitchfork] 
- The Debt Shift Theory Of The Global Financial Crisis And The Great Real Estate Bubble [Forbes] 
- Kurt Cobain died 25 years ago today. Why he still matters. [Seattle Times]