Rocky Raccoon Houses A Strong Desire For Stuff
Sometimes people want what they want, no matter what the risk is. There is a lot of that same sentiment coming from regulators and policy administrators in the federal government these days. More on that in future editions of these Housing Notes, but until then, we’ll fight for our jackets.
I get it, that jacket is sweet— Jake Vig (@Jake_Vig) August 6, 2019 
On an unrelated note, here’s a shoutout to my excellent summer semester Columbia grad students in the GSAPP program  who took their final exam yesterday. I really enjoyed the class interaction and wish them well in their careers. When turning in their completed exam, one of the students commented that they specifically enjoyed my discussion on pie versus cake…
Oh, the satisfaction of teaching can not be put into words!
But I digress…
Rate Talk: Business versus Consumer Sentiment Is Like Apples versus Oranges
As I’ve mentioned before in these housing notes, the bond market seems terrified of current U.S. economic policies while the stock market seems euphoric (even though the stock market is not the economy.
Sam Khater , Freddie Mac’s chief economist, and aficionado of the only band that matters  says, “There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment. Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”
I loved this observation about sentiment (and The Clash, obviously).
Chart-Nirvana Market Update In Elliman Magazine
As regular readers of my Housing Notes have noticed, I create a full-page spread for Douglas Elliman Real Estate’s quarterly magazine  using the results of my U.S. market research . I’m no Len Keifer  but still, the visuals are pretty cool.
A Potential Spike In Refi’s, Illustrated
Here’s a good look at the refinance situation  via The Basis Point, always a good read. The one point not made here is that falling rates raise prices which is not good for housing in the long term when matched against tepid wage growth. The drop in rates is a short term win for consumers, not a long term win.
Vox: Where Manhattan’s Street Grids Came From
It wasn’t by accident.
Spurious Housing Correlations: Grocery Stores
Here’s one from ATTOM .
- Take a ton of housing data and geotag it for its proximity to a grocery store like Whole Foods (a.k.a. Whole Paycheck) or Trader Joes.
- Then measure the value of a neighborhood against those farther away or before and after the store was built.
- Base the analysis on zip codes even thought zip codes don’t represent neighborhoods or like housing stock.
- And you get…voila…junkstats.
There are so many other factors to be considered that this type of analysis is way too simplistic to be credible. An example of spurious correlations in my housing market of Manhattan would be to compare the average or median sales price of an apartment with or without a fireplace. Homes with fireplaces tend to be “pre-war” (built prior to WWII) or penthouses which sell for a premium above the remainder of the housing stock. My own  fireplace amenity analysis  was not some sort of boolean logic exercise found in the ATTOM analysis.
Bloomberg Terminals: Miller Samuel Luxury Housing Index
We power 6 different price indices for Manhattan luxury housing on the Bloomberg Terminals. This luxury median sales price chart shows how the market has slid from recent highs and how much prices have surged after the financial crisis.
Downtown Alliance: Q2-2019 Lower Manhattan Market Overview
For many years I’ve been crunching residential housing data for the Downtown Alliance for use in their quarterly reports . Here are the residential pages of their latest report:
(For earlier appraisal industry commentary, visit my old clunky REIC  site.) As I said last week, I’m taking a bit of a summer hiatus from appraisal policy discussions, but there is always time for this:
Appraising Unique Properties Like Attached RV Garages
I’ve been at this appraisal thing for 33 years and I’ve never seen or heard of this amenity or the targeted demo it appeals to. My friend and appraiser colleague Ryan Lundquist is the undisputed leader of wacky amenity observations.
I drove to Boise today. It's a trip seeing this particular brand new neighborhood. Every other house has a space for an RV, and this one actually has two RV spaces. They're clearly appealing to the out-of-state retired crowd. #migration  pic.twitter.com/kHupK3KrYr — Ryan Lundquist (@SacAppraiser) August 6, 2019 
OFT (One Final Thought)
Aside from his dirty hands, this would be a typical experience in my kitchen. The skills demonstrated here are strangely satisfying and are required viewing.
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 replay the Beatle’s ‘White Album” for that ‘Rocky Raccoon’ song;
- You’ll learn to love my charts;
- And I’ll go to the grocery store.
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
- Uncovering the stories behind downtown's overlooked synagogues [6sqft] 
- Mortgage Rates Drop Significantly [Freddie Mac] 
- Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back. [Wall Street Journal] 
- Lower Manhattan Real Estate Market Overview, Q2 2019 [Downtown Alliance] 
- Malibu wanted to crack down on huge mansions. But fire losses could bring even bigger homes [LA Times] 
- 2019 Mortgage Refi Boom & Homebuyer Affordability [The Basis Point] 
- As Mortgage-Interest Deduction Vanishes, Housing Market Offers a Shrug [NY Times] 
- Bringing some sunshine to South Florida’s opaque resi report outlook [The Real Deal] 
- New ATTOM Data Solutions Analysis Examines the Grocery Store Impact on the U.S. Housing Market [ATTOM Data Solutions] 
- The Retail Reckoning Has Only Just Begun [Barrons] 
- Where Manhattan’s grid plan came from [Youtube] 
- What went wrong at Bedly and what co-living renters there can do now [Brick Underground] 
- How renting could affect your health [Weforum.org] 
- New York City Council Passes Bill to Require Businesses to Register Storefronts [WWD] 
My New Content, Research and Mentions
- Palm Beach homes: July real estate deals set record at $374 million [Palm Beach Post] 
- Buyer Beware: Manhattan Housing Market Shows Signs Of Vulnerability [Zerohedge] 
- Is it better to rent or buy in NYC? [Curbed NY] 
- Luxury homes in the Hamptons are selling at some pretty steep discounts [CNN] 
- It’s Hot on the North Fork [East End Beacon] 
Appraisal Related Reads
- Appraisal Rule Changes: What Impact Will They Have On CRE? [Bisnow] 
- Appraisal Management Companies Create More Problems Than They Solve [American Banker] 
- Bifurcated Appraisal vs USPAP Scope of Work Rule, An Appraiser MUST… [Appraisers Blogs] 
- New York Appraisal Management Company Act Now In Effect [Appraisal Buzz] 
- The Other Side of Things [Vacap Online] 
Extra Curricular Reads
- Live and Let Die: James Bond's Smoking Habits Over the Years [Livescience] 
- Revealed: how Monsanto's 'intelligence center' targeted journalists and activists [The Guardian] 
- David Berman, Slacker God [The Paris Review] 
- Dude. Bro. Chief. Bud. Where Do All These Guy Nicknames Come From? [MEL Magazine] 
- Yankees-White Sox to Play Regular Season MLB Game at ‘Field of Dreams’ Site in 2020 [My San Antonio] 
- This Hideous Emoji House Is at the Center of Some Truly Bizarre L.A. Beef [VICE] 
- The New Ruins of the Melting Alps [New Republic] 
- Why the U.S. Labeled China a Currency Manipulator [Bloomberg] 
- NO PLATE [Snopes] 
- The Longest Wars [Foreign Affairs] 
- Lana Wood, Natalie’s Little Sister, Has Plenty to Say [NY Times]