Flushing Out Our Housing Data (from You & I)
If sales are plunging because of a clogged inventory pipeline or hesitation-fueled uncertainty, then more serious steps (jumping up and down) are required …and a lot better puns.
Before you get started, take a look at my commentary on Facebook Privacy, Zillow Brokerage and the CoreLogic monopoly threat to real estate in: The Core-Facebook-Logic Consumes Us A La Mode in “Appraiserville” section down near the end of this note. The message applies to all of us.
but I digress…
Market Report Gauntlet Q1 2018 Week 2: Manhattan, Brooklyn, Queens, Westchester, Putnam Dutchess
As longtime Housing Note readers understand I’ve been writing and expanding market report series for Douglas Elliman  since 1994. This week Douglas Elliman published our research for the following markets:
March 2018 Manhattan, Brooklyn and Queens Rentals 
Q1 2018 Brooklyn Sales 
Q1 2018 Queens 
Q1 2018 Northwest Queens Sales 
Q1 2018 Riverdale Sales 
Q1 2018 Westchester County Sales 
Q1 2018 Putnam & Dutchess County Sales 
The general theme across the region was fewer sales and there was a correlation with larger sales declines in higher-priced regions than lower priced regions. Price trends in aggregate were generally higher. Part of the decline in sales was due to chronically low inventory choking off volume but the other part was a hold back in response to the economic uncertainty housing faces – with the implementation of a new tax law that extracts the federal government out of the “homeownership promotion business” and rising mortgage rates and uncertain economic policy going forward.
What was particularly fascinating for a chart nerd like me was the result of what appraisers would call a “paired sales analysis.” Bloomberg news covered the Westchester and the New York City rental report and was ranked the 2nd and 4th most read stories ALL day worldwide. However, Westchester County, a suburban market of NYC garnered more reads than the always hot topic NYC rental report (but Westchester remains behind their paywall). Typically the only suburbs that Wall Streeters (350K+ subscribers to the Bloomberg Terminals) are interested in are Greenwich (next week) and the Hamptons (in two weeks). And their interest seemed to be driven by the new tax law implications (the average property taxes for single family homes in Westchester is $20,000 per year) and the decline in sales. High property taxes and new tax law must have generated the heavy readership.
But most importantly there were charts the articles using our data:
And our rental data made “Chart of the Hour” on Bloomberg which is all that matters to me in life:
Week 2 Market Report Chart Action
For more, you can go to our gallery .
After More Than A Decade of Denials, Zillow Will Sell Homes
It seemed inevitable that Zillow would be getting into the home-flipping business. If a company amasses the data and then builds analytics around it…and then watches a lot of HGTV, yes it is inevitable.
Gamechanger: Zillow to begin buying and selling houses [Housingwire ]
…with the subtitle: Follows lead of Redfin and other direct homebuyers
Zillow Intends to Buy and Flip Homes [WSJ ]
…with the subtitle: Online listing service’s strategy threatens to disrupt traditional real-estate-agent business model
With the Zestimate as one of the least accurate AVMs I have seen, I can’t imagine this being profitable unless they are relying heavily on forward-looking analytics through clicks. Competitors like OpenDoor who have garnered a lot of attention from investors specialize in markets with homogenous housing stock and after seeing a presentation, I believe their margins and margin for error are very thin. They don’t use listing agents but are very cooperative with buyer agents. I don’t see how Zillow can rely on the Zestimate for this strategy at high scale.
Millennials became the largest generation in the work force, but will they buy houses?
Click on the graphic to see more Millennial insights at Pew Research.
Real Estate Blockchain, Not To Be Confused With Cryptocurrency
Streetwire CEO Comments on Zillow Move To Sell Homes
As I’ve mentioned in the past, I am an advisor to Streetwire , a blockchain real estate vertical and I asked their CEO, Oliver Tickner, to provide some thoughts on the Zillow move into the brokerage industry:
Zillow’s recent expansion into transactions – announced yesterday – is an interesting development. It would seem the firm is taking another step away from their dependency upon traditional broker firms for access to listings and wider information about the market. This may be a reaction to the blockchain technology that has received much wider coverage through bitcoin over the past 6 months.
Companies such as StreetWire  are in the early stages of enabling organizations and individuals with the closest proximity to real estate to register ownership of their information and then sell access to it through a marketplace. From the producing side, this has the potential to generate faster transactions, secondary revenue streams, and retention of control over how that information is used. For the pure data aggregators, however, blockchain has the potential to place a cost on the information they traditionally receive for free through listings and sales from real estate brokers.
Sebastian Delmont who is part of the StreetWire team and was the Co-Founder and former CTO of StreetEasy which was acquired by Zillow was recently quoted as saying “If I had started StreetEasy today, I would have done it on top of StreetWire. We would have begun with higher quality data, and would be rewarded for all the value-added information we built on top of it and contribute back to the system”.
Oliver Tickner, CEO
The Core-Facebook-Logic Consumes Us A La Mode
This has been a tumultuous couple of weeks for Facebook. I’ve never been a heavy user of it, mostly a lurker. They constantly change navigation paths making it nearly impossible to update your settings frequently – and when you do, do you really trust them? I’ve always seen them as the “dark side” much like Mac lovers see PCs and Appraisers see CoreLogic. We all know by now that when you use something that is free, then you are the product. This was never more apparent when hearing Zuckerberg’s testimony before Congress this week – his long-term tactic since Harvard has been “its easier to apologize than ask permission.” There’s a great read on Quartz: 14 years of Mark Zuckerberg saying sorry, not sorry 
But now with other developments such as CoreLogic buying the dominant software provider in the appraisal industry with over 50% market share, a la mode, plus FNC, Landsafe, Dataquick and others, big data and big paydays seem to always come from the backs of frontline appraisers. CoreLogic powers a large share of MLS systems now through their Matrix software. How can that not be some sort of data grab from real estate agents? Likewise, how can the a la mode purchase not be a data grab from appraisers? I’m all ears.
As for the a la mode decision to sell to CoreLogic , it is a free country and this is capitalism in action. If I were Dave Biggers, the founder of a la mode, looking at a giant payday and a stagnating user base, I’d find this offer hard to turn down. Corelogic has a reputation for paying whatever it takes to acquire someone which makes me think the end game is bigger than the sum of the parts.
We use a la mode and I even provided testimonials for them in 2012 , but now I am conflicted, and since we are heavily invested in their software, to leave at this moment doesn’t make economic sense. But this action opens my eyes to looking at alternatives, which are already cropping up, after the dominant appraiser form software brand, blinked. They will need to prove to appraisers they are not going down that path. This seems like a tall, if not impossible and improbable order. But our industry reaction isn’t about the seller. It’s about the buyer – what CoreLogic plans to do with this purchase, aside from the sterile  press releases.
And Zuckerberg got a much higher hourly rate than I ever have on the witness stand as an expert. He constant use the terms like “I’m sorry” and “we didn’t know” are things I’ve never said on the witness stand. If I did, perhaps I could bill at $1.5 billion per day? Just a thought.
Zuckerberg’s net worth went up $3b today. So even with five hours of testimony, that’s a good hourly rate.— Nicholas Thompson (@nxthompson) April 10, 2018 
Brilliant Idea #1
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- They’ll be more apologetic;
- You’ll say you’re sorry;
- And I’ll wonder what it was like to have any privacy.
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
- Rough cut [The Real Deal NY] 
- The best NYC neighborhoods to buy an apartment in now (and which to skip) [Brick Underground] 
- Real estate in the world’s 2 biggest financial centres is stalling [SF Gate] 
- Zillow Intends to Buy and Flip Homes [Wall Street Journal] 
- Reframing Housing Development: How Changes in Design, Construction, and Regulation Could Reduce the Cost of Housing (Event of the Joint Center for Housing Studies, Harvard University) [Harvard.edu] 
- Gamechanger: Zillow to begin buying and selling houses [Housingwire] 
- Millennials are the largest generation in the U.S. labor force [Pew Research] 
- This Is America’s Richest Zip Code [Bloomberg] 
- Housing Perspectives (from the Harvard Joint Center for Housing Studies) [Housing Perspectives] 
- FHA increases loan limits in nearly every area of U.S. for 2018 [Housing Wire] 
- Landless Americans Are the New Serf Class [The Daily Beast] 
- The One Room That'll Make Buyers Bail, Even If They Love the House [Realtor.com] 
- The Future of America’s Economy Looks a Lot Like Elkhart, Indiana [Wall Street Journal] 
- When a Family Homestead Can’t Stay in the Family [New York Times] 
- Rising Home Prices Push Borrowers Deeper Into Debt [Wall Street Journal] 
- Don't Blame Amazon for the Retail Apocalypse [Bloomberg] 
- Silicon Valley’s Astronomical Housing Price Creates a Problem for Startups [Observer] 
- Once Listed for $95M, a 25-Acre Hamptons Estate Is Now $59M [Mansion Global] 
- Rising Interest Rates Squeeze Homeowners’ Budgets [Wall Street Journal] 
- Higher Property Taxes? You May Be Able to Appeal [New York Times] 
My New Content, Research and Mentions
- Find out why March was a good month to rent in Manhattan [BuzzBuzz Home] 
- Brooklyn again sets record-high sales prices. But can it continue? [The Real Deal NY] 
- Fewer Brooklyn apartments are selling, so why are prices at record highs? [Brick Underground] 
- Bernie Madoff's Beachfront Mansion Is Selling for $21 Million [Bloomberg] 
- Gravesend offers room to spread out in southern Brooklyn [Brick Underground] 
- Pick a New York City Borough: Rents are Falling There, and Fast [Bloomberg] 
- Manhattan rents tumble by the most in nearly 7 years even after landlords offer a ton of freebies [Business Insider] 
- Manhattan rents tumble by the most in nearly 7 years even after landlords offer a ton of freebies [Stamford Advocate] 
- NYC landlords offer more concessions than ever as demand for affordable rentals grows [Curbed NY] 
- Luxury Manhattan Rental Market Continued to Soften in March [Mansion Global] 
- Luxury Liftoff? The 10 Ritzy Regions Where Home Prices Are Soaring the Highest [Realtor.com] 
- Brooklyn apartment sales follow Manhattan lower [Financial Times] 
- Sales in Brooklyn and Westchester Dip [Mansion Global] 
- Manhattan loses its lustre as apartment sales plunge [Irish Times] 
- Concessions high, rents continue to slide in Manhattan [The Real Deal NY] 
- A broken record? Concessions again reach new highs in Brooklyn, Queens [The Real Deal NY] 
- Brooklyn and Queens housing prices flirt with record highs, yet lose some steam [Crains NY] 
- Manhattanites are flocking to this Queens street [New York Post] 
- Report: LI community among the nation's wealthiest [Newsday] 
- Apartment glut coming to an end? [Seeking Alpha] 
- Kushners ‘Negotiating Now,’ Over Sale of Flagship Building [New York Times] 
- Artelligence for April 9, 2018 [Art Market Monitor] 
- Tax reform pause hurt sales, prices in Q1 2018 | [Real Estate Weekly] 
- Landlords roll out incentives to stave off slowdown [Real Estate Weekly] 
- Manhattan's luxury real estate market slides – [RealtyBizNews] 
Real Estate Blockchain Reads
- Streetwire Primer Public Draft [Streetwire] 
- RE Ledger – Real Estate Blockchain Consortium [RE Ledger] 
Appraisal Related Reads
- Weird Science [The People's Blog] 
- Appraisers Ditching a la mode After News of Corelogic's Acquisition [Appraisersblogs] 
- CoreLogic Acquires a la mode technologies, LLC [A La Mode PR] 
- Seeing the market while driving, crunching numbers, & eating tacos [Sacramento Appraisal Blog] 
- Staff Appraiser Overtime Class Action Lawsuit Against Corelogic AMC [Appraisersblogs] 
- CoreLogic acquires a la mode [Housingwire] 
- Why one small bank wants to bring real estate appraisals in-house [American Banker] 
- How the Agreement Between CoreLogic & the FTC Impacts Appraisers [Appraiser Blogs] 
- Are you paying unseen add-on fees for your appraisal? [Chicago Tribune] 
- How Land Value Contributes to Your Home’s Market Value [Aspen Appraisal Services] 
Extra Curricular Reads
- The improbable story of the cranberry’s path to global domination [Quartz] 
- The Ice Cream Sundae Must Be Stopped [New York Times] 
- Analysis | 14 years of Mark Zuckerberg saying sorry, not sorry [Washington Post] 
- After Scandal and Divorce, Jenny Sanford Learns She Can Love Again [New York Times] 
- City Observatory – The Cappuccino Congestion Index [City Observatory]