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

July 19, 2019

Knitting and Ironing A New Housing Sweater

Of course, we all know about Extreme Ironing [1]. Now we have…wait for it…Heavy Metal Knitting. Some people desperately need a hobby but I’ll stick to housing market analysis. And don’t get me started about birds [2].

A quick shoutout to my Columbia University [5] grad students who learned yesterday:

“The housing market doesn’t care what you think.”

But I digress…

Elliman Reports Released: Q2-2019 Greenwich, Fairfield County, Downtown Boston

As my faithful Housing Notes readers know, I’ve been authoring an expanding series of Elliman Reports [6] for Douglas Elliman Real Estate [7] since 1994.

Week 3 of our quarterly gauntlet was completed with the publication of reports in the Northeast and South Florida. Let’s start with the northeast.

Elliman Report: Q2-2019 Greenwich Sales [8]
Elliman Report Q2-2019 Fairfield County [9]
Elliman Report: Q2-2019 Downtown Boston [10]

First, the coverage of the Greenwich market findings was the 9th most-read story of the day [11] worldwide on the Bloomberg Terminals which has ±350,000 subscribers. That makes sense because Greenwich, Connecticut has long been known as the home of many in the securities industry.


And they presented a chart on Greenwich and who doesn’t love charts!


Here are the highlights and charts of each market:


Elliman Report: Q2-2019 Greenwich Sales [8]

“Excess listing inventory at the high is beginning to clear as sellers reconnect with market conditions.”



Elliman Report Q2-2019 Fairfield County [9]

“Sales edged higher year over year after five straight quarters of declines.”





Elliman Report: Q2-2019 Downtown Boston [10]

“All price trend indicators moved higher with average price per square foot setting a record high.”

“Rising price trends reached record levels as a blistering sales pace remained.”




Elliman Reports Released: Q2-2019 South Florida

Elliman Reports: Q2-2019 South Florida [20]

For charts on each of the South Florida markets we cover, you can go to our chart gallery [21].









– Single-family sales rose year over year for the second time in three quarters
– Condo sales rose year over year for the fourth consecutive quarter

– Single-family sales rose as all price indicators continued to move higher
– Condo median price rose annually for the 27th time in 28 quarters

Way Down: NAR’s International Real Estate Survey 2019

NAR released [22] their annual membership survey covering international real estate [23]. Because of Fair Housing laws and “redlining” concerns, hard data that connects country of origin with purchase transactions is essentially non-existent in the U.S., unlike much of the world.

Bottom line: Purchases by international buyers are down 31% and total dollar volume is down 36%.

Based on our resources, we think international buyers in Manhattan are down by half.


ATTOM: U.S. Median Sales Price Hits Record While Second Y-Axis is Lost

Housingwire [25] ran a story using ATTOM’s data that the U.S. median home price hit a new record of $266,000, rising 6.4% year over year. This is consistent with the NAR existing median sales price [26] of $277,000, up 4.8% year over year.

While this is terribly fascinating, why has the second Y-Axis in the ATTOM chart gone rogue?



(For earlier appraisal industry commentary, visit my old clunky REIC [28] site.)

Back in the Day: FDIC Bragged About Negative Amortization (Neg-am) Loans

Regulators today are often removing barriers to responsible behavior with the hope of expanding lending activity since falling mortgage rates aren’t the answer. Banks are pushing back and it is instructive to see the way FDIC thought back in 2006. FDIC and the U.S. Treasury have turned out to be very anti-appraiser and are championing ways to automate as a way to replace us. Think about wildly inaccurate Zestimate-like AVMs on first mortgages. Economist, real estate agent and good follow John Wake shares this:

NCUA BOD Quadruples Threshold For Non-Residential Loans

Dave Towne essentially asks us to mark this moment in time after receiving an email alert from the Appraisal Institute on the cavalier risk position taken by NCUA [32]. Not require appraisals on the vast majority of commercial loans being – what could go wrong?

“The NCUA Board of Directors today (July 18, 2019) quadrupled – from $250,000 to $1 million – the appraisal threshold for nonresidential real estate loans. (NCUA is the National Credit Union Administration.)

The appraisal threshold is the loan amount below which appraisals are not required.

Increasing the threshold would drastically increase the number of nonresidential real estate loans that would not require an appraisal.”

That last sentence is somewhat convoluted. (I didn’t write it!)
More simply stated: The decision will REDUCE the number of appraisals needed for Commercial property loans ….. which originate with Credit Unions.

Secondarily, the other major loan guarantee agencies threshold is half as much….$500,000. So the NCUA Board decision has the potential of significantly impacting all aspects of Commercial appraisals. It presents a possible upheaval in the industry/profession.

This decision also means that any person a CU designates can do a commercial property EVALUATION when the loan amount will be below $1M. It begs the question: who will value the actual property which will be the collateral for the loan?

Since most loans are written for a percentage of the collateral value, it means a significant amount of commercial property value will not be actually appraised by a Commercial appraiser.

Like so many things in life, the NCUA Board decision was predicated primarily on greed. They hope to generate more business for Credit Unions whereby those local organizations can say to community business people … “We’ll give you a boat load of money and you won’t have to pay for a proper appraisal which will be the evidence basis for the pile of moolah.”

This is a lot like the liar loans that infiltrated residential lending not that long ago.

It’s also akin to the ‘savings and loan crisis’ many of us went through in the late 1970’s – early 80’s.

It’s too bad people cannot learn from past history. “Oh, but it’s different now!” Yah, right…..same pile of barnyard stuff, but just wearing a different pair of boots.

OFT (One Final Thought)

This video was made three years ago and I don’t know how I missed it – its amazing. It’s not what you think it is…but it may be NSFW to some.

HOW TO LOSE WEIGHT IN 4 EASY STEPS [33] from Benjamin Berman [34] on Vimeo [35].

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 [36]. 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 J. Miller, CRP, CRE, Member of RAC [37]
Miller Samuel Inc. [38]
Real Estate Appraisers & Consultants
Matrix Blog [39] @jonathanmiller [40]

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