Who Wants To Own A House?
One of my sons told me about this “Who Wants To Be A Millionare?” winner.
I hardly watched this game show series because:
A) I’m not down with rhetorical game show titles. It reminds me of an old Mike Ferry technique I heard in Chicago – agents would say something like this when they walked into a home with their buyers: “Having a fireplace is important to you…isn’t it?
B) I wouldn’t like being asked general questions in public as seen as “Are You Smarter Than a 5th Grader?”
C) I hardly watch TV.
And thankfully I have never stumbled across rhetorically-title game shows while channel-surfing: How’s Your Mother-in-Law? – Who Wants to Marry a Multi-Millionaire? – Who Wants to Marry My Dad? – Who Wants to Be a Superhero? – Who Wants to Be Governor of California? – How Do You Like Your Eggs? – Do You Trust Your Wife?
I know all the answers already. Still, I’d like to get a call like this from one of my sons:
But I digress…
PBS NBR CNBC Videos – State of U.S. and Manhattan Luxury Market
CNBC’s Diana Olick reports on luxury home sales dropping in NYC due to tax laws and fewer international buyers.
PBS Nightly Business Report clip
[Story with 2 clips begins at 18:20]
It is past the middle of August so it was odd to see that the Wall Street Journal ran a story that covered a new “half-year” report by a brokerage firm on the Manhattan luxury market from January 2018 to June 2018. But it was a good story nevertheless.
Almost two months had passed since that reporting period so CNBC reached out to me in response to talk about our already released first and second quarter Elliman Reports, as a segway to the luxury homebuilder Toll Brothers record earnings release.
More importantly, I didn’t wear a tie at the 30Rock studio interview. Hey, it’s summer.
Let’s Talk About Cutting Interest Rates, But First, Let’s Raise Them
What a time we’re living in. The Fed is talking about raising rates in September and possibly December, and even through next summer. But since they are anxious about the trade war we find ourselves in, rates could fall next year into 2020.
For the past year, the rate hikes always felt like there were designed to give enough room to cut if the economy runs out of gas by 2020 as many economists seem to be suggesting. There are signs that some sectors of the housing are weakening. This is clearly being seen in the housing market where existing home sales are at a 2 1/2 year low.
Affordability Gap In Long Island, NY Continues to Expand
Long Island is one of the few regions in the NYC metro area where both price and sales trends continue to rise. But the rate of growth is easing. Newsday wrote a good piece called Home prices are outrunning wage growth on Long Island.
My favorite points made in the piece were this:
Nassau residents earning the county’s average annual wage of $60,775 would need to spend 69 percent of their income to buy a home at the median price of $500,000 in the April-to-June quarter…
In Suffolk, residents would spend 56 percent of the county’s average yearly wage of $58,721 to buy a median-priced home for $372,500…
Nassau residents earn a median household income of $102,044, according to Census estimates for 2012 through 2016. That’s up nearly 42 percent from 2000. In Suffolk, household income grew by 25 percent, to $90,128.
In the same period, home values soared by 86 percent in Nassau and more than doubled — rising 103 percent — in Suffolk, census figures show.
They used the data from the Elliman Report series I author.
“X” Marks The Spot: U.S. House Size Versus U.S. Household Size
No rocket science here but I thought it was interesting to see how much these trends are moving in opposite directions.
“Cheery” Home of Mass Murderer for Sale
There was an article in Realtor.com about a home in Reno once owned by the Las Vegas mass shooter. I was surprised it was for sale since we often read about these homes being torn down when they are linked with horrific crimes. But it is a noble attempt to raise funds to benefit the famlies of the victims.
The home of the shooter in Newtown Connecticut was torn down as was the elementary school because the tragedy could not be erased. We run into this sort of thing on occasion but not nearly on the scale of these tragedies and as time passes, the discount declines until it is no longer apparent – At the other end of the spectrum, I once appraised a townhouse in Manhattan for a divorce where the husband blew himself and the house up. It became a land sale and there was no apparent discount.
A well-known real estate valuation specialist for these types of tragedies that was interviewed for the article also said:
What the article does not mention is that I think that those who buy these properties and get them back to quasi-normal use, help the community move forward and heal.
Appraisal Institute Spent One Year Searching For 2X President Jim Amorin To Name Him CEO
As I predicted in these Housing Notes a while back, Jim Amorin is the new AI National CEO. It was inevitable that Jim Amorin would be named the replacement for former CEO Grubbe. Ironically Grubbe’s resignation was accepted by Amorin exactly one year ago today. Grubbe served a decade and I’m told created a toxic institutional culture. There was great hope by the membership that fresh faces in AI National leadership could right the ship from its declining membership, unending dishonest efforts to fight for issues that hurt the profession and their general irrelevance to consumers of appraisal services and regulators. The network of state coalitions are now in the regulatory conversation in D.C. and AI National is becoming a “stone in their shoe.”
It looks like the all of the membership’s money spent on a third-party firm to filter the applicants may have been a sham. The CEO position pays a whopping $400,000 salary so a 25% executive recruiter fee could be $100,000 cost. There were many applicants for the position and one of them had to be a hell of a lot more qualified than a status quo choice of the handful of senior execs that are the problem.
I got a lot of feedback from distraught MAIs when the news broke, who are resigning in the near future. Here some of my favorite quotes.
Fewer institutions are requiring the MAI of their staff, and more of them hewing to the FIRREA law on state certification as the qualification. It’s a natural progression that dues-soaked Appraisal Institute members, including prominent MAIs in the major markets, would look at the cost of the designation versus the return on that investment, and decide to leave it behind. This is especially true in light of the fact that members are realizing that their dues are going to support National and only National (2016’s chapter-money-grab), and that National’s interests are not those of the rank and file. How many MAIs and SRAs enjoy seeing their dues going to pay for very fat salaries of non-compete positions, and for the luxurious international jet-set lifestyle of the management and executive committees? The MAI has less and less value…unless you are in that 0.00001% at the top, getting a pre-departure glass of champers in the forward cabin.
It’s nothing short of breathtaking to watch a once-proud organization devolve into a parody of itself. I wonder how much money and time they spent on what obviously was a foregone conclusion months ago.
Looks like the “fix” was in…..and there is the only thing to say about this: Bad f##king decision! I just can’t believe this.
Just as you predicted. Self-interests have taken over all aspects of the Appraisal Institute.
Warm up the bugle. Taps will be needed soon at the AI funeral!
I will pay dues again in 2019, but I very likely will not for 2020…It pains me that my dues dollars will support these self-interested buffoons that have hijacked the organization. Never thought I could see the day where I would think like that – but it is here!
Here are some thoughts…
After the Nashville AI conference, it was incredibly obvious that the decision had already been made and they were trying to slide it in without incident. A story shared to me by two colleagues on different occasions who were told by someone who attended the Nashville Convention: When it was announced that Jim Amorin was to receive a special award for acting as the CEO for the past year, an appraiser stood up in the audience and implored leadership not to install Amorin as the new CEO because it would be the “death knell” of the organization. The audience applauded in agreement.
When the AI National sent the notice of the new CEO in their email blast, the story was buried in the second to last article.
Membership is being managed by a few elites at the top. Their echo-chamber is too loud for them to hear us any more.
Brian Coester, the controversial founder of a national AMC, has been served with criminal charges
Because Coester is a controversial figure in the appraisal management company industry and has been a frustrating topic of conversation by the residential appraisers for a while, it is worth pointing out what is in public record right now.
The District Court for Montgomery County served a summons to Brian Coester yesterday for “Interception of Communication.” This essentially means “email hacking” in statute CJ.10.402 under Maryland law. Translated: “Hacking the personal email account of appraiser Mark Skapinetz.”
“Spirited” Banks Treat Appraisers Like Cattle Where Clerical Staff Determines Their Livelihood
Warning: lots of “spirited” inside jokes abound.
No offense to the cows I’ve met in my lifetime (none are on a first name basis with me). When an institution has “spirit” it is all about the lowest bid and fastest turn time…period. Clerical staff usually makes the choice when institutions (with spirit) treat their appraisers whose spirit has been crushed, like this.
In looking at this particular request, here’s what I find — we uploaded the request around 11:30 yesterday. The “huddle” on Appraisal Shield pushes each request out to an appraiser about once an hour — I did a couple of extra pushes on this request because I had been delayed in getting out. As of this morning, this request had been pushed out to 14 appraisers — you were #12 in the rotation. We typically like to receive 3 – 5 bids before making a choice. When the assistant accepted a bid this morning at 9:19 a.m., we had received 9 bids and she chose the one that had the cost bid and delivery time that worked for this project.
My understanding is that the huddle is based on random rotation and I can see on other projects where you were notified much sooner in the process.
California Coalition Sends Critique of Sham Effort By AI National to Congressman
Why on earth would AI National do this? We will never know. This is why it is a bad idea for coalitions to co-sign ANY letters with AI National going forward. Please stop. After being kicked out of TAFAC and resigning from The Appraisal Foundation, AI National is doubling down on building relationships with the state coalitions who are now making real progress at the state and federal level. Why should coalitions align with AI National after they continue to insert duplication and misrepresent the state of our industry to regulators and politicians?
Remember this – Bill Garber’s common refrain continues to be “we are the most over-regulated profession” in every one of his presentations. Be advised that this is absolutely false and self-serving to AI National.
As a result of Bill Garber’s efforts, the California Coalition sent a note to the congressman who at AI National’s request, created the “Discussion Draft titled ‘To Establish a National Appraiser Licensing System and Registry for licensing and registration of real estate appraisers and appraisal management companies, and for other purposes.” [download]
Please read CCAP’s Letter to Congressman Stivers Discussion Draft. They point out how redundant this draft actually is and how it lumps Appraisers and AMC’s’ together, a clear reflection of AI National’s strong alliance with REVAA (the AMC trade group).
(OKPAC) disassociates from the comment letter submitted by the Appraisal Institute
While AI National got a bunch of cosigners for a letter critical of the North Dakota appraisal waiver request, they also falsely claimed that the ASC posted private information from North Dakota on their website which is patently untrue. AI National still hasn’t apologized or corrected the letter for this criticism likely designed to malign ASC as part of the longstanding strategy to malign The Appraisal Foundation in order to take their place in some capacity.
Here is how the OK Coalition responded to the misleading AI National claims about the North Dakota data:
Mr. Garber et al,
Within email below Mr. Jim Park clearly and unequivocally explains action in response (which entails federal rule of law) regarding North Dakota request for waiver. Therefore, based on the information provided, the Oklahoma Professional Appraisers Coalition (OKPAC) disassociates from the comment letter submitted by the Appraisal Institute with emphasis on the following paragraph:
“We are also concerned the North Dakota request published on the ASC website includes personally identifiable information such as names, email addresses, fees, and turnaround times. Such information was deemed to be privileged by the ASC during the consideration of the TriStar Bank temporary waiver request earlier this year. In fact, full and complete information on the TriStar Bank temporary waiver request was only obtained through a Freedom of Information Act request at the state level, as a copy of the request letter received by the ASC was sent to the state appraiser regulatory agency, per ASC regulations. This inconsistent and disparate treatment of appraiser personal information is alarming and should be immediately addressed in a consistent manner by the ASC and within the ASC regulations.”
In further clarification of disassociation here is the following action taken by ASC:
“The Submitter made the request, including all addenda, public by providing the request to appraisers in North Dakota and others themselves. As an added precaution, prior to posting the submission on the ASC website, ASC staff reached out to the submitter and asked if any of the information in the submission was confidential and should be redacted prior to being made public. Their answer was no.ï¿½ In comparing this submission to TriStar submission and eventual waiver request, they did ask for certain information to be redacted prior to publication on the ASC website, which we did.”
OKPAC continues to support the denial for a temporary waiver of appraiser requirements in North Dakota.
Thomas E Allen, SCRP, RAA
Other coalitions are going to be responding to this in the near future including ours. Just when you think AI National is changing their attitude, they pull this.
Brilliant Idea #1
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Brilliant Idea #2
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Reads, Listens and Visuals I Enjoyed
- As green space went up, crime went down in poor neighborhoods [Crains]
- The Size of a Home the Year You Were Born [24/7 Wall St]
- Airbnb’s Big Growth Driver: Full-Time Rentals [The Information]
- Treasury Issues Crackdown on State and Local Tax Workarounds [NY Times]
- Million-Dollar Home Sales Are Gaining in U.S. While the 99% Balk [Bloomberg]
- Study: Young LIers face lower pay, higher home prices [Newsday]
- The Boss: How I Became the CEO of One of America's Largest Real Estate Firms [Time]
- Investigating Metro-Area Home Improvement Spending Cycles [JCHS]
- Las Vegas Mass Shooter's 'Cheery' Home for Sale, With Proceeds to Benefit Victims' Families [Realtor.com]
- Even with Fed hiking rates economists start talking about when the first rate cut will come [MarketWatch]
- Existing Home Sales Fell for Fourth Straight Month in July [Wall Street Journal]
- Luxury Apartment Sales Plummet in New York City [Wall Street Journal]
- Is It O.K. to Cheat on My Broker? [NY Times]
- Sea level rise is already costing property owners on the coast [Washington Post]
- A New Exhibition Examines Why We Love Cabins [Architectural Digest]
- Fewer Americans Uproot Themselves for a New Job [Wall Street Journal]
- Russian Billionaire Roman Abramovich Is Forging Ahead with His New York City Mega-Mansion [Architectural Digest]
- Tiny homes controversy is anything but small and cute [Kansas.com]
- California homeowners get to pass low property taxes to their kids. It's proved highly profitable to an elite group [LA Times]
My New Content, Research and Mentions
- What to know if you want to buy a NYC house with a pool (and get an end-of-season deal) [Brick Underground]
- Sellers’ price-cutting trend could be good news for buyers [Miami Herald]
- NYC luxury apartment sales drop [CNBC]
- El barrio de Wynwood estrenará 4 nuevos complejos de oficinas entre 2018 y 2019 [Cuba en Miami]
- Sellers' price-cutting trend could be good news for Chicago homebuyers [Orlando Sentinel]
- Home prices outrunning wage growth on LI [Newsday]
- Wynwood is getting a slew of new offices. Can the neighborhood’s character survive? [the Miami Herald]
Appraisal Related Reads
- Is a Pre-listing Appraisal Still a Good Idea? [Birmingham Appraisal Blog]
- When sellers expect buyers to pay for solar [Sacramento Appraisal Blog]
- "What the article does not mention… [Randall Bell/LinkedIn]
- Jim Amorin Named Appraisal Institute CEO [Appraisal Institute]
- What Is the Cost of Home Appraisal and What Should I Know? [The Street]
- Feeling Overly-Taxed Cuyahoga County? Why Not Appeal?
Extra Curricular Reads
- Barry Ritholtz: Use Your Disillusion I [Trillions]
- Barry Ritholtz: Use Your Disillusion II [Trillions]
- Lynyrd Skynyrd guitarist Ed King dies [CNN]
- Pick Your Own Brexit [Bloomberg]
- Visualizing Toxicity in Twitter Conversations [Medium]
- Verizon throttled fire department’s “unlimited” data during Calif. wildfire [Ars Technica]
- In a Victory for PETA, Animal Crackers Roam Free [NY Times]
- New York’s Flower District Is Dying
- A Dream Ended on a Mountain Road: The Cyclists and the ISIS Militants