Manufacturing Trivia for the Housing Masses
I’m admittedly partial to Heinz since I won a national college scholarship by writing a long hand essay with a blue ballpoint pen in one take (hey it was summer and I needed to get to the beach asap). Speaking of Heinz, let me ask my Housing Note readers:
Q: Which has more sugar in it, a pound of ketchup or a pound of ice cream? A: Ketchup has 8% more sugar than ice cream.
And while we’re at it…
Q: How many rodent hairs does the FDA allow in a jar of peanut butter? A: The FDA allows no more than 1 hair per 100 grams. A jar in my cupboard has 1130 grams so that means it has no more than 11.3 rodent hairs.
These were trivia points made in my last speech in college and they still hold up today.
So I’ve always marveled at mass manufacturing and what’s inside all those jars and cans. I never tire of watching videos like the one below – of course, you rarely see clips where the process breaks down and the product falls on the floor.
Q: Did you know that the beans were actually cooked in their cans?
Take a look inside the world’s biggest baked bean factory, which produces 3 million cans every day. pic.twitter.com/P6TbnqoQn6— Business Insider UK (@BIUK) February 9, 2018
So much trivia, so little time…so my Housing Notes will be a little short this week.
Wildenstein Mansion sees more action than Bitcoin
I can’t help but provide an SEO friendly headline. The word “bitcoin” is the new “gold” for blogosphere headlines – guarantees page views.
The limestone mansion located at 19 East 64th Street on the Upper East Side of Manhattan just sold at a record price of $90,000,000. I’ve appraised the house in the past and it is a little over 20,000 square feet with 41′ in frontage used as a commercial building.
Incidentally, the width of a townhouse is an amenity above and beyond square footage. The average width of a Manhattan east side townhouse sale last year, according to our Elliman Townhouse Report 2008-2017 was 18.8 feet. Sales with frontage at or above the 25′ width are often considered trophy townhouses because the width is what appraisers call an incurable obsolescence. You can’t make your townhouse wider because it is built to the property line.
Here’s a breakdown of the 3 transactions/near-transactions of this property since 2013:
Late 2013 went to contract for somewhere just under the $100 million asking price by the Qatar Government which later fell apart because of the publicity the sale garnered.
In early 2014, the house sold for $79,500,000 to a Chinese conglomerate known as HNA.
This week the house sold for $90,000,000 to the brother of the HNA founder supposedly due to a liquidity crunch.
This townhouse sale at $90,000,000 is the highest price on record for a commercial townhouse and all townhouses.
The highest closed sale on record for a residential townhouse was the Harkness Mansion at 4 East 75th Street formerly owned by Thomas Watson Jr., the son of the IBM founder. It sold to investor Christopher Flowers for $53,000,000 back in 2006 and was subsequently sold for a 30% loss. I had appraised this house several times over the years before this sale. It was a 50 footer but similar in size to the Wildenstein Mansion.
There was a contract signed for a residential townhouse last December for $80,000,000 but no one seems to know if it closed and it hasn’t shown up in public record. It is rare to see sales this large to come out in public before the title transfers and commissions paid so I found the hoopla about it last year very odd – click on the photo for the WSJ story.
In all these cases, each sale was a “pocket listing” and not formerly offered for sale at the time they went to contract.
I find it curious that over the past several years when there was a $100M sized U.S. listing written about in the real estate media, they never sold. With all the publicity they received it wasn’t effective. In my view, the act of sending out press releases for trophy properties probably damages their ability to sell given that the typical buyer in this market has concerns about privacy (until after the sale occurs and then earn the bragging rights).
Manhattan’s Highest Priced Sales Per Year
Here is an ongoing chart I maintain with the highest Manhattan sales prices set for each year:
The Scorpion Tower: Impossible Build on PBS Episode 1
Architect Zaha Hadid‘s last creation gets built in Miami. Really enjoyed this.
The Second Appraiserfest Trailer Gets Released!
“THIS IS NOT AN EVENT…IT’S A HAPPENING!” November 1, 2, 3 in San Antonio Register now to take advantage of the early bird specials and get all the details of the “happening.”
The video is Phil Crawford’s long-awaited inspirational take for appraisal professionals who largely have been beaten down for most of their careers when all they are trying to do is the right thing and protect the public interest.
More on Tristar Bank’s Appraiser Shortage Lie to Waive Appraisals
From the Tennessee Appraiser Coalition…
In response to Tristar’s poorly conceived request to let them waive appraisals to save their customers money, falsely claiming there was a shortage of appraisers, the Tennessee Real Estate Appraiser Commission and a consortium of appraisal organizations used facts in their response to the ASC, requesting that ASC deny their request. This article on the Appraisal Institute website explains the implications of a waiver request.
Response to TriStar Temporary Waiver Request from Randall C. Thomas, Chairman Tennessee Real Estate Appraiser Commission [PDF]
Temporary Waiver Request of TriStar Bank from 20 U.S. appraisal organizations [PDF]
On another note, I have heard that the second waiver request by City Bank and Trust out of Oklahoma at the end of last year was withdrawn. I am told that there was a lot of pressure from Oklahoma appraisers who, like Tennessee, exposed the appraisal shortage fallacy.
See a pattern here? When appraisers speak for themselves, they get results. Times are changing folks. Keep at it.
Hensarling Demands Watt Explain GSE Payments
The FHFA is on the hot seat for paying into the Housing Trust Fund, etc. despite having a negative net worth for 2017 and having to take a draw on the Treasury. This is the same regulator that is allowing Fannie Mae to allow no appraisal mortgages which is based on flawed AMC appraisal data despite remaining under receivership. At the same time, FHFA has reached out to the appraisal coalition community directly, and embracing them, yet seemingly ignoring the rhetoric from AI National. FHFA seems to be a regulator that is conflicted between the macro view and the on-the-ground take, a common problem in large institutions.
February 16, 2018 Letter: Hensarling, Chairman of Committee on Financial Services, To Watt, Director of FHFA [PDF]
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- Home ownership among young adults has ‘collapsed’ [The Guardian]
- How Canada became an offshore destination for ‘snow washing’ [The Guardian]
- Gig Economy Grows Up as Lenders Allow Airbnb Income on Mortgage Applications [WSJ]
- HNA sells UES mansion for $90M [TRD]
- Diagnosis [Northern Trust]
- Homeownership and the American Dream [Urban Institute]
- The High Cost of ‘Affordable Housing’ Mandates [WSJ]
- Why So Many Shopping Malls Are Being Built in Mexico [WSJ]
- John Hancock Center skyscraper losing its iconic name [Chicago Tribune]
- The Big Risk in China Isn’t Stocks [Bloomberg]
- Home Prices Hit Records in Almost Two-Thirds of U.S. Cities [Bloomberg]
- Palm Beach real estate: Will tax benefits offset Wall Street jitters? [Palm Beach Daily News]
- New York’s Commercial Property Slump Shows Signs of Slowing [WSJ]
- Inflation: Price Changes 1997 to 2017 – The Big Picture [Ritholtz]
- A $150 Million Stairway to Nowhere on the Far West Side [NYT]
- ‘American Horror Story’ mansion’s new owners really regret their purchase [Curbed LA]
- Quicken Loans, America’s Largest Mortgage Lender, Partners with Airbnb to Provide New Home Financing Option [Quicken Loans Pressroom]
My New Content, Research and Mentions
- Manhattan Mansion Linked to HNA Sells for Record $90 Million [Bloomberg]
- East Chelsea, Manhattan: Once Industrial, Now Residential [New York Times]
- In New York, a View of Even a Small Park Adds Value [NY Times]
- NYC’s tallest rental tower sees low profits amid big concessions [The Real Deal New York]
- Manhattan Landlords Offering Concessions as Rental Average Fell in January [The Jewish Voice]
- The dramatic changes in New York’s skyline [CNN]
- Millionen für eine Wohnung: Luxus allein reicht in Manhattan längst nicht mehr [Faz]
Appraisal Related Reads
- Hensarling, Chairman of Committee on Financial Services, To Watt, Director of FHFA [COFS]
- Your Appraisal May Not Be As Accurate As You Think [Birmingham Appraisal Blog]
- Fake real estate trends & rising rents [Sacramento Appraisal Blog]
- Video: THE OFFICIAL APPRAISERFEST 2018 EVENT TRAILER #2!!!! [Voice of Appraisal]
- AMC’s “My Way or the Highway” Attitude – [Appraisers Blogs]
- The 4 requirements for a room to be considered a bedroom [Sacramento Appraisal Blog]
- Functionally Obsolete Appraisers [Hagar Institute]
- AQB Adopts Changes to Real Property Appraiser Qualification Criteria [McKissock Learning]
- So, What’s The Birmingham Real Estate Market Look Like For 2018? [Birmingham Appraisal Blog]
Extra Curricular Reads
- Podcasting Is the New Soft Diplomacy – [The Ringer]
- A First Look Inside Apple Park [Fast Code Design]