Buckle Up: Rates Are Falling and Housing Market Is Confused
As a kid, I gave little thought of seatbelts. They were decorative metal things that singed your legs in the summer. Little did I appreciate the deathtraps we were riding in circa the early 1970’s – you know, the Ford Country Squire with blue vinyl seats with fake wood panel stickers and those cool sideways back seats surrounded by metal?
How little we think of safety when we’re sitting in a cool seat.
I remember the days when seat belts existed primarily to give you third-degree burns in July. pic.twitter.com/19zoR791ZT— Super 70s Sports (@Super70sSports) July 30, 2019
!!!!Here’s a shoutout to my Columbia GSAPP students who learned yesterday that while pie charts are generally bad, pie is absolutely good.
But I digress…
The Myth of Missing Skyscrapers Between Downtown and Midtown
In addition to some serious “Caisson” talk, Jason Barr, Professor of Economics at Rutgers, wrote a bedrock takedown of the bedrock myth of Manhattan skyscraper building locations – it is worth a full read.
The Bedrock Myth and the Rise of Midtown Manhattan (Part I) – Building the Skyline Blog
I get claustrophobic just thinking about what sandhogs do:
Workers inside the cube (“sandhogs”) would dig up the soil and pass it up through shoots to the surface. The box would slowly sink. Once it hit the quicksand, compressed air was pumped in to keep the soil out. Eventually, the box would reach the bedrock. It was then filled with cement, and piers were built atop it up to the basement level to hold up the structure.
Why Is That Neighborhood So Expensive?
Check out the moving bus action above from the article! LOL.
While the article is not a deep dive, it is remarkably clear.
Why We Move
Love this from Flowing Data: Why People Move using the Current Population Survey.
I was surprised how small the category “retired” was and conversely, how high “wanted new or better home.”
I’ve Always Wanted A Graffiti-Covered Home
I haven’t seen the film yet but my friend and appraiser colleague Maureen from Chicago is always worried I don’t get out enough so she keeps sending me good things to check out. The documentary “Jay Myself” is one of those.
A while back I appraised a nearly identical building occupied by one of the founders of Blue Man Group and a few others as well. This represented a time when you could buy a modest building for very little in the context of today.
Sellers: Price Your Home Correctly The First Time!
This article by Grant Long, Data Scientist at Streeteasy was one of the best things I read this week:
The article provides empirical evidence and sound logic why MOST PRICE CUTS OFFERED BY SELLERS ARE MERELY CHASING THE MARKET and make little difference to buyers. Price it correctly from the get-go or make a drastic cut as soon as you realize you are wrong.
Long Island’s Nitty Gritty Details by Town
Newsday published an article on the Long Island housing market and shared an epic data table that we provided using our analytics in addition to the Elliman Report: Long Island Sales Q2-2019 we released last week. The table doesn’t appear on mobile devices and won’t be included in the Sunday print edition.
I orangified the table provided in the online article to sort by town name and presented it below – click on graphic to open entire table:
Charting Economic Policy Uncertainty
The word “uncertainty” has dominated housing market conversations in the Northeast and because of ongoing policy changes like the day to day China tariff situation, wondering what happens with Brexit and unemployment at 50-year lows but we see the Fed dropping rates.
The bond market has been uncomfortable with U.S. economic policy since last October as evidenced by the sharp drop in mortgage rates…
…yet the stock market has been trending higher…
…and global uncertainty on policy is rising…
…as is China…
…and the US…
Why should we care? While housing market doesn’t care what you think it has always been very clear that it doesn’t like uncertainty. This is why the sharp drop in mortgage rates have had less than the typical impact on the housing market.
Our favorite charts of the week
From Greg Daco, Chief U.S. Economist of Oxford Analytics, who I’ve had the pleasure of sharing a green room with and serve on the NYC mayor’s economic advisory panel with. He cuts through the clutter.
All three charts here are worth a look…wage growth is peaking.
We need wage growth to boost the housing market. Low unemployment is never enough.
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
Appraiser Discovers New State of the Art Home Security Feature in Texas
Forget Simplisafe. This time tested security feature was shared by my good friend and appraiser Ron Box in Dallas who was given this by a local colleague. It was observed in a new home during an appraisal inspection. Ron is always on the lookout for new home amenities.
OFT (One Final Thought)
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 buckleup;
- You’ll buy an old station wagon;
- And I’ll be more uncertain.
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
- 7 Things That Drive Up the Cost of Homes in Your Area [NeighborhoodX/House Beautiful]
- Families Go Deep in Debt to Stay in the Middle Class [Wall Street Journal]
- Why People Move [Flowing Data]
- Elegran revealed as creator of fake building websites [The Real Deal]
- Price Cuts on NYC Homes: Why Most of Them Don't Work [StreetEasy]
- Homes Are Being Built the Fastest in Many Flood-Prone Areas, Study Finds [NY Times]
- The Bedrock Myth and the Rise of Midtown Manhattan (Part I) – Skynomics Blog [Building The Skyline]
- How ‘Developer’ Became Such a Dirty Word [NY Times]
- Meet the A.I. Landlord That’s Building a Single-Family-Home Empire [Fortune]
- Compass makes new agents sign Silicon Valley-grade contracts [The Real Deal]
- Central Park Tower Surpasses Chicago's Willis Tower On Way To Tallest Roof Height In Western Hemisphere [New York YIMBY]
- A Recession Is Coming (Eventually). Here’s Where You’ll See It First [NY Times]
- Bar Raised for Green Cards Popular With New York Builders [Wall Street Journal]
- How to Get a $5,000 Amazon Credit: Buy a House Through Realogy [NY Times]
- City Observatory – How gentrification benefits long-time residents of low income neighborhoods [City Observer]
- Foreclosure nears as judge denies Chapter 11 protection for Mountain of Beverly Hills owner [The Real Deal]
- Homeownership rate for black Americans drops to record low [Housingwire]
- An Oregon Couple With 57 Vacation Homes Makes a Permanent Stopover in Portland [Wall Street Journal]
- To Fight ‘McMansions,’ One Protester Spoils the View (With Himself) [NY Times]
- Financial Crisis Yields a Generation of Renters [Wall Street Journal]
My New Content, Research and Mentions
- In downtown Flushing, another big debut [Crains NY]
- A Breather After the Rush to Beat the New ‘Mansion Tax’ [NY Times]
- Cap on tax deductions boosts demand for lower-tax homes [Newsday]
- 2 real-estate investors dish on why they think NYC's Billionaires' Row is not a good investment – and which luxury building they would consider buying in [True Viral News]
- Mansion Crisis: Hamptons Housing Market Had Its Worst Spring Quarter In 8 Years [Zerohedge]
Appraisal Related Reads
- Do Birmingham Home Appraisers Set Local House Values? [Birmingham Appraisal Blog]
- Holding AMCs Responsible for the Hybrid Inspection [VaCAP/Appraisers Blogs]
- Court pauses FTC proceeding against Louisiana Appraisers Board [Baton Rouge Business Report]
- Committee Passes H.R. 3619 – Requires AMCs to Disclose their Fees [ICAP/Appraisers Blogs]
- Is USPAP Obsolete? – George Dell, SRA, MAI, ASA, CRE [George Dell]
- The invasion of tech companies in real estate [Sacramento Appraisal Blog]
- Existing Regulatory Burden on Appraisal, a Proven Failure- System Reform [George Dell/Appraisers Blogs]
Extra Curricular Reads
- Economic Policy Uncertainty Index [Policy Uncertainty]
- The teen who tied a Virginia election — Retropod — Overcast [Washington Post]
- How Phones Made the World Your Office, Like It or Not [NY Times]
- A film by Stephen Wilkes [jaymyself.oscilloscope.net]
- A Big Sign of a Slowing Economy [Slate]
- Is the Knicks’ James Dolan the Worst Owner in Professional Sports? [Bloomberg]
- The Top of Mount Everest [The Top of Mount Everest]
- The Story Behind the Internet's Favorite Photo of Car Culture [Citylab]
- With ball and cap en route to Cooperstown, Orioles’ Stevie Wilkerson soaks up post-save stardom [Baltimore Sun]
- How Did a Shark in a Sydney Aquarium End Up With a Human Arm? [Atlas Obscura]
- Economics Isn’t Dismal. It’s Useful. [NY Times]