- Miller Samuel Real Estate Appraisers & Consultants - https://www.millersamuel.com -

April 20, 2018

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.

https://www.millersamuel.com/files/2018/04/world-of-the....mp3 [1]

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

As readers of Housing Notes know I’ve been the author of an expanding report series known as the Elliman Report [2] since 1994 for Douglas Elliman Real Estate [3].

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).

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As we’ve learned from the Barry Sternicht episode [5] 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 [5]” 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.

[4]

Market Report Gauntlet Q1 2018 Week 3: South Florida

There is a slew of Douglas Elliman’s South Florida market reports [6] that I author were released this week. The general theme [7] across most of the markets was rising prices and inventory, with sliding closing volume but surging pendings [8] – 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.

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Here are some of our charts…

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[11]
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You can view more in our Florida housing market chart gallery [15].

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.”

[16]

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 [17].

[17]

Appraiserville

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.

[18]

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 [19]. And be sure to share with a friend or colleague if you enjoy them because:

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.

Jonathan Miller, CRP, CRE
President/CEO
Miller Samuel Inc. [20]
Real Estate Appraisers & Consultants
Matrix Blog [21] @jonathanmiller

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