Somehow…The Housing Market Is Like Rhubarb
Here are some very deep “vegetables are like housing” insights. I’ll bet there are few Housing Note readers that have cooked with rhubarb but we understand the basics..it grows..its consumable…and there are lots of things it goes with. My wife and I have a long-standing joke about rhubarb and I’ve mentioned here before. For those of you who missed it, it goes like this. Whenever one of us hears the word “rhubarb” used it she and I banter like this:
Question: “What’s Rhubarb?”
Answer: “It’s a plant.”
This dialog came from this 1989 Lee Jeans commercial…
Cracks me up every time. And of course, a couple of my kids had a garage band (literally they only played in our garage) back in 2005 and their name? You guessed it. Electric Rhubarb.
Here’s the only recording I have – before screaming vocals were added.
And of course, this is what Rhubarb sounds like in the dark:
But I digress…
Market Report Gauntlet Q1 2018 Week 3: Greenwich & Fairfield County
We are in the thick of the gauntlet with one more week to go. Bloomberg included our Elliman Report: Greenwich, CT Q1 2018 in market coverage piece that was the 5th most read on the Bloomberg Terminals worldwide (350K+ subscribers).
As we’ve learned from the Barry Sternicht episode a few years ago, Wall Streeters (and Greenwich homeowners) are learning to price their homes to the market, rather than aspirationally. That change in sentiment has resulted in improved conditions at the higher end. The headline of the Bloomberg story was changed from a SOLID synopsis of the story content:
ORIGINAL “In Greenwich, Long Listed Homes are Selling in Sign of Healing”
To what is clearly the BEST LUXURY REAL ESTATE HEADLINE IN HISTORY:
CURRENT “Greenwich’s Luxury Homes Are Selling. It Just Takes a Year”
In the case of the high-end market, days on market has become very long, clearly illustrated in the chart below. Yet this is a good thing. The DOM metric means: The average number of days from last price change to contract date all properties that closed in the quarter. In this case, it meant that long sitting properties sold because the sellers became realistic.
Since the financial crisis, luxury sellers became so disconnected from actual market conditions for so long preceding the era of the 2016 “Sternlich Moment” that number of old-school brokerage firms and real estate brokers who are known for tracking statistics seemed to develop a “Stockholm Syndrom” with the wishes of their sellers. But with greater market transparency, they could no longer keep enabling sellers to wildly overprice their listings for fear of not getting the listing. This was always a disservice to sellers, even if done with best intentions. Their data never matched all the rosy talk about great parks and schools but only served to “fog” what was going on. When it comes down to it, the market is the market. Once sellers began to accept what actual conditions were through greater market transparency, luxury properties began to move in 2017. The number of transactions is a much more important sign of a market’s health than price trends.
Market Report Gauntlet Q1 2018 Week 3: South Florida
There is a slew of Douglas Elliman’s South Florida market reports that I author were released this week. The general theme across most of the markets was rising prices and inventory, with sliding closing volume but surging pendings – all on a year over year basis.
Mansion Global does a great chart on our absorption (months to sell) stats. The high-end Miami Beach absorption is clearly the longest. But months of absorption change dramatically when the market changes because the denominator of the formula gets bigger when the market changes. We saw this a decade ago when absorption was at 10 years but when sales accelerated, inventory was absorbed in 3.5 years.
Here are some of our charts…
You can view more in our Florida housing market chart gallery.
New York Times Rental Chart
Last week our rental research for the Elliman Report covering Manhattan, Brooklyn and Northwest Queens was published. The theme was a growing decline in rents. As I like to say, “the trend is your friend…until it ends.”
This Week in Aspirational Pricing
The “a string of increasingly pricey off-market mega-sales” continues with a new record $110,000,000 sales in Malibu as told in my favorite high end real estate blog: Yonda’s Little Black Book.
Mueller Writes Appraisal Reports
In all the news craziness coming out of D.C., this Working RE email advertisement caused me look twice. I am not getting anywhere near politics here but the headline was an attention grabber.
Being knee-high in my market research (like Ryan Lundquist) in Connecticut and South Florida, I am a little overwhelmed this week and am cutting Appraiserville short. Plus Super Troopers 2 is premiering tonight. There are a lot of great appraisal-related links below so please take a look.
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 order more pie;
- You’ll know more about plants;
- And I’ll bake you a Rhubarb pie while wearing Lee jeans (rewatch video above).
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
- REBNY How To Videos: Federal Tax Reform – New Rules, New Headaches, New Opportunities [REBNY]
- San Francisco’s Big Seismic Gamble [New York Times]
- 18th Annual John T. Dunlop Lecture with Raphael Bostic, CEO, Federal Reserve Bank of Atlanta – [YouTube]
- Homeowners spend $50,000 fighting over small strip of land between houses | [Toronto Star]
- Housing Starts Edge Higher as Apartment Construction Surges [Wall Street Journal]
- California Lawmakers Kill Housing Bill After Fierce Debate [New York Times]
- California’s housing shortage is the biggest in the nation, by far [The Real Deal LA]
- Homebuyers face ‘most competitive market in recorded history’ [Curbed NY]
- Cities 101: Why NYC’s Original Area Code Was “212” [Untapped Cities]
- Whisper Listings | REBNY | Co-brokerage Commission [The Real Deal NY]
- Bernie Madoff’s beachfront mansion is on sale for US$21 million [South China Morning Post]
- London House Prices Fall in Stark Division With Rest of U.K. [Bloomberg]
- Falling Demand, Inventory and Price Growth Weigh on U.K. Property Market [Mansion Global]
- It's Time to Acknowledge That the Housing Crisis Is Global [Citylab]
- Foreigners Underpin France’s Prime Housing Revival [Mansion Global]
- N.Va. real-estate market flat as caution creeps in among some buyers [InsideNOVA]
- Rent Control Campaign in California Is Taken to the Streets [New York Times]
- Meet the PHIMBYs [City Lab]
- Rough cut [The Real Deal NY]
My New Content, Research and Mentions
- Penthouse on a Private Island in Florida Asks $40 Million [Wall Street Journal]
- Douglas Elliman Unveils Its Latest Survey of the Boroughs – Strong Prices, Low Sales Characterize Brooklyn, Queens Residential Market in 1Q 2018 [Cooperator]
- South Florida markets strong in first quarter [Miami Agent Magazine]
- Resi sales mostly on the rise in South Florida. Miami and Miami Beach are the exceptions: Elliman reports [The Real Deal Miami]
- citybizlist : Citybizlist : Douglas Elliman Releases Q1 2018 Fairfield County and Greenwich, CT Sales Market Reports [CityBizList]
Recently Published Elliman Market Reports
- Elliman Report: Q1 2018 Jupiter / Palm Beach Gardens Sales
- Elliman Report: Q1 2018 Delray Beach Sales
- Elliman Report: Q1 2018 Wellington Sales
- Elliman Report: Q1 2018 Palm Beach Sales
- Elliman Report: Q1 2018 Fort Lauderdale Sales
- Elliman Report: Q1 2018 Boca Raton Sales
- Elliman Report: Q1 2018 Miami Coastal Mainland Sales
- Elliman Report: Q1 2018 Miami Beach Sales
- Elliman Report: Q1 2018 Greenwich, CT
- Elliman Report: Q1 2018 Fairfield County, CT
Real Estate Blockchain Reads
- Primer Draft of Streetwire Token [Streetwire]
- StreetWire Blockchain Network To Revolutionize Real Estate Transactions [Biz Journals]
- Blockchain Is About to Revolutionize the Shipping Industry [Bloomberg]
- Cryptocurrency miners are moving to Sweden and Norway seeking cheaper electricity [QZ]
- RE Ledger – Real Estate Blockchain Consortium [RE Ledger]
Appraisal Related Reads
- Importance of Including Sales Price Trend Graph in Appraisal Reports [Dave Towne/Appraisersblogs]
- In a New York Minute [Appraisal Buzz]
- Data Grab from Appraisers, Core-Facebook-Logic Consumes Us a la mode [Appraiserville via Appraiserblogs]
- Birmingham First Quarter Sales & The Housing Shortage • Birmingham Appraisal Blog
- What appraisers think about increasing the contract price to cover closing costs
- The Role of the Appraisal in Residential Real Estate Lending [Joseph Lynch Appraisal]
- Appraisal Institute Requests Appraisal Standards Board to Rework Q&As | [Appraisal Institute]
- Dickson-based Tristar Bank's request for regulatory help draws sharp criticism from appraiser groups – [Biz Journals]
- Trend spotting: Appraisers take issue with Fannie Mae's Collateral Underwriter [Housingwire]
- Should borrowers be charged AMC fees and appraiser fees separately? [Housingwire]
- Weird Science [The People's Blog]
Extra Curricular Reads
- The Hidden Masterpieces Of The N.Y.C. Subway [Fastco Design]
- Why Are Credit Card Numbers on the Back Now? [Slate]
- How to change your iPhone passcode so the cops can't hack it [Cult of Mac]
- Who is Boston Marathon runner-up Sarah Sellers? – [The Boston Globe]
- Seattle’s best places to cry in public, mapped [Curbed Seattle]
- After 97 years selling beef, White Castle is adding Impossible Burgers to its menu [QZ]
- What is your Value Add ? [The Big Picture]
- Lessons from Las Vegas – [99% Invisible]