Housing Construction Port-A-Potties Have Reached Their Max Headroom
Not all data is presented as numbers. For years, I have collected names of construction port-a-potties and this week, I tripped over a new one, while waiting in line for my first COVID vaccine.
Here is the go list:
Johnny on the Spot
Scottie’s Potties – we’re no 1 in the no 2 business
Call a Head
GI John’s: it’s go time
But I digress…
New Signed Contract Activity Shows Rabid Demand Across All Markets Covered; Manhattan Finally Arrived, But Was Late To The Party
Douglas Elliman  just published our new signed contract research for the month of February, and it was blistering in the New York , Florida , Colorado  and California  markets we cover.
CNBC reported using our data  that the Manhattan housing market was the standout.Here’s a screenshot from my internal spreadsheet – it represents the YOY% trend of all three property types combined. In journalism, we know that three data points make a trend…
Los Angeles County
The new year has seen two straight months with year over year gains in the combination of single family and condo new signed contracts. The month of February saw the largest annual increase in new signed contracts since this report series began last April. New inventory has fallen year over year by half over the last four months, keeping the pressure up on the market.
New inventory for single family and condos combined fell year over year by the largest amount since April when tracking began. The new year has seen two straight months with year over year gains in the combination of single family and condo new signed contracts. The month of February saw the second-largest annual increase in new signed contracts since this report series began last April, with January seeing a slightly larger gain.
San Diego County
The new year has seen two straight months with year over year gains in the combination of single family and condo new signed contracts. New inventory for single family and condos combined fell year over year by the largest amount since May when tracking began, keeping the pressure up on the market.
February was the eighth straight month with significant year over year gains in the combination of single family and condo new signed contracts. The month of February saw the largest annual increase in new signed contracts since this report series began last April. The continuation of heavy sales levels has begun to pull new inventory into the market, as evidenced by the second straight month of year over year gains after two months of annual declines.
The combination of single family and condo new signed contracts rose sharply year over year for the sixth time in seven months. High sales volume has pulled in significant new inventory for both months in the new year.
Palm Beach County
Single family and condo new signed contracts combined have risen significantly year over year for the twelfth consecutive month. New inventory has seen modest annual declines for the third time in four months, unable to keep up with the robust sales activity.
The combination of single family and condo new signed contracts rose sharply year over year for the twelfth consecutive month. New inventory has seen expanding declines since October, unable to keep up with sales.
New signed contracts for condos surged year over year by the highest amount since tracking began in May. New condo listing inventory fell significantly year over year since June. Single family new signed contracts surged annually at their highest rate since July as supply fell annually for the fourth time in five months.
Pinellas County Since July, the combination of single family and condo new signed contracts rose sharply year over year at its highest rate. New inventory has declined year over year for four consecutive months, unable to keep up with sales.
Single family and condo new signed contracts combined have risen significantly year over year for the twelfth straight month. New inventory has seen modest annual declines for the third time in four months, unable to keep up with the heavy sales levels.
New York 
For the third straight month, new signed contracts for co-ops, condos, and 1-3 families combined have risen annually. Manhattan has lagged the region in activity since the summer but appears to be catching up in the new year. The new listings coming to market have declined year over year for five consecutive months, overpowered by rising sales levels.
New signed contracts for co-ops, condos, and 1-3 families combined have risen significantly year over year for eight consecutive months. Despite the heavy new signed contract gains since July, new listing inventory has increased annually since June as robust conditions have encouraged more property owners to list.
Long Island (excluding H/NF)
For the first time since June, new signed contracts for condos and single families combined did not rise year over year. The sharp annual drop in listing inventory over the past two months has restrained new signed contract levels.
New signed contracts for condos and single families combined had risen significantly year over year since May when tracking began. The sustained year over year sales surge since the spring finally began to overpower new listing inventory in the new year, which fell sharply.
New signed contracts for condos and single families combined saw a modest year over year gain after slipping in January. New listing inventory has fallen sharply year over year for three straight months.
New signed contracts for condos and single families combined have risen significantly year over year since July. The extended sales surge finally began to overpower new listing inventory in the new year, which fell sharply in January and February.
New inventory for condos and single families combined has shown significant year over year declines since October, restraining new signed contract activity in January and February of this year.
New signed contracts for condos and single families combined had risen significantly year over year since July when tracking began. The sustained year over year sales surge since the summer finally began to overpower new listing inventory by this month.
The Suburban Plunge In Listing Inventory Continues While Expanded Vaccine Distribution May Help Resolve The Shortage
The plunge in mortgage rates have stimulated sales demand nationwide to the extent that listing inventory has collapsed. This is the current plight of suburban housing markets.
The Manhattan Decade Report Results Included A Global Financial Crisis And A Global Pandemic
I haven’t given the The Elliman Report: 2011-2020 Decade Manhattan Report  a proper shout out since Douglas Elliman published it last month. The report is nearly 60 pages of co-op and condo market results by region, neighborhood, property type and other views during a ten year moving window. The first iteration for Douglas Elliman  was way back in 1996 when it covered the market from 1989-1996, not quite a decade but hey, it was a start.
Manhattan Townhouse Buyers Got More For Their Money, But Weren’t The COVID-Safe Haven That Was Anticipated
This month in my monthly data contribution to the New York Times Real Estate Section’s Calculator Columm, it’s all about townhouses: Townhouse Buyers Are Getting More for Their Money .
The Elliman Report: 2011-2020 Decade Manhattan Townhouse Report 
But while the shift to buying bigger has been part of the pandemic story — particularly suburban buyers seeking single-family homes for working, schooling and everything else — in Manhattan, it was a dearth of sales that helped drive up the median price.
There was an initial narrative that with Covid there’s going to be this flight to townhouses, from multifamily, from condos, when actually the number of sales for townhouses was the lowest in 24 years
Here’s the table illustrating average square footage trends…
First time I've ever been in a story that uses the word "traipsing" Townhouse Buyers Are Getting More for Their Money per the @DouglasElliman  report via The Calculator column on @nytrealestate  https://t.co/j8dokj9bZC  pic.twitter.com/7SZfcmGxJI — Jonathan Miller (@jonathanmiller) March 4, 2021 
Greenwich Connecticut, The Luxury Suburb, Continues To Boom
Bloomberg did a story  relying on our new signed contract research for the Greenwich housing market – sales conditions continue to out perform the regional housing market.
The large estate portion known as “Backcountry” has switched back on, after being dormant since 2007.
Those with a taste for the ultra-luxury have turned their attention to Greenwich’s older estates outside the town center, which had fallen out of favor in recent years. Two homes listed at $20 million or more found buyers last month, compared with none in February 2020.
[Podcast] Barron’s Live – Feb. 26: Understanding Home Values in a Shifting Market
I joined Barron’s Live  again for a fun discussion with Beckie Strum on appraising and how the housing market recovery is taking shape in the new year. This event was supposed to be a video chat but my new gigabit fiber optic internet service dropped about 5 minutes in (I think the culprit was my VPN) and I had to scramble and call in to do the interview on a backup number. That disaster has been edited out and the audio interview is available in their podcast feed:
Understanding Home Values in a Shifting Market [Barron’s Live ]
[VIDEO] The Pandemic Renter Wish List Is Likely Short Term
I did a quick interview  for Fox5 NY this week. The laundry list of amenities tenants ask for in return for moving out of the city seems temporary to me. As the vaccine distribution expands and the infection rate drops, those amenities on the wish list will be much less important. Remember, those items are an offset for being cooped up in the city. I believe much of the amenity hype dissolves when companies call their employees back and the city is more widely perceived as safe.
The Compass IPO Chronicles: They Might SPAC
Why do I continue to write about the brokerage firm Compass ? Partly because it is the business model
grift gift that keeps on giving.
There has been so much to write about because so much they have said seems disconnected with an understanding of real estate or is representative of the prior bubble era. To be clear, I have good friends that are agents that moved there, like it there, and I wish them well. They’ll be fine in whatever the company’s outcome and their intentions are not in question. The “emperor wears no clothes” sense I get after reading what Compass constantly puts out truly galls my “right versus wrong” sensibilities as they appear to be nothing more than a “disruptor by capital .” I’ve been watching this firm since they were known as Urban Compass, and I seem to recall a press release or quote after their first year in business that indicated they were returning to a “traditional business model” because their initial efforts only attracted a few dozen rental agents. Unfortunately, that press release or quote appears to have been scrubbed from the internet, or I am showing my age.
With the massive implosion of WeWork a while back (and the recent $500 billion reward to the founder for blowing it up), Compass stopped touting them as a believer in their approach  since it was clear that little due diligence was applied to Softbank’s WeWork investment. Compass had to delay their IPO plans and worked hard to dissociate with Softbank, including sending emails out to their agents explaining how to say it.
With the traditional IPO route now in question for them post-WeWork, their recently filed S-1  raises a lot of questions. Both Housingwire  and The Real Deal  have been all over this filing.
In the Housingwire  piece I said…
“They showed a $270 million loss in an insanely booming housing market,” noted Jonathan Miller, a real estate appraiser at Miller Samuel. The S-1’s main sales points, especially an introductory section where Compass walks through its agent-friendly technology, “seems to show how little they understand the brokerage space or are just ignoring it,” Miller said.
And this is the key point made by many over the past several years:
“I do not see any identifiable technology advantages from Compass over other brokerage firms,” said Ken Johnson, a real estate economist at Florida Atlantic University. “Compass appears to be another real estate franchise with a bit more integrated use of technology and aggressive marketing.”
In other words, how does reducing agent clerical efforts slightly, result in billions in valuation premium?
SPAC talk, of course
There have been rumors of Compass using a SPAC  as a workaround vehicle instead of a traditional IPO.
For those of you not familiar with SPACS, and the fact that celebrities are often associated with them, gave me pause – especially when former NY Yankee A-Rod  had one. There is a good New York Times piece on SPACS that explains them and my friend Barry Ritholtz has some spectacular quotes:
Anyone Who’s Anyone Has a SPAC Right Now [NY Times ]
What is a SPAC (special purpose acquisition company)?
SPACs are shell corporations that list on a stock exchange, with the goal of buying a private business and taking it public. In essence, a SPAC is a way to do an I.P.O. without all the time, expense and regulatory oversight traditionally required. The sponsors of a SPAC typically have two years to identify acquisitions or must return their investors’ money.
And Barry Ritholtz ‘s Quotes:
‘Hey, listen, there’s this hot new financial offering. Let’s put your name and celebrity on it,’” Mr. Ritholtz said. “‘You’re going to bring some fairy dust to a SPAC and the potential upside is tens if not hundreds of millions of dollars.’”
“but if it works out, it’s $100 million,” Mr. Ritholtz said. “Humans love asymmetrical risk-reward situations.”
“I can’t believe we haven’t seen a Kim Kardashian SPAC yet.”
Barry also cited Sturgeon’s Law  “
Seems about right.
(For earlier appraisal industry commentary, visit my old clunky REIC  site.)
Risk Management Association’s Chief Appraisers Virtual Round Table
This week I spoke to a group of chief appraisers that run the valuation groups for many of largest banks in the world. It’s an invitation only event run by the Risk Management Association – I was very appreciative of opportunity to present and extremely appreciative of the valuation knowledge of the audience. I spoke about the forms the COVID housing recovery is taking, focusing on the urban/suburban housing tension.
1/2 I'm very excited to be speaking at the @rmahq  Risk Management Association's Chief Appraisers Virtual Round Table today. The invitation-only event has an audience of chief real estate appraisal officers from financial institutions like asset management,… pic.twitter.com/mFYGCO85kY — Jonathan Miller (@jonathanmiller) March 3, 2021 
NAR’s EXCELLENT Response To FHFA’s ‘Request for Information on Appraisal-Related Policies, Practices, and Processes’
I can only assume that this NAR Letter to FHFA  was crafted by the NAR Appraisal Section of appraisal industry leaders that has been behind other recent excellent thought pieces. This was a spectacular starting point summary on the appraisal industry’s situation today and the overpromise of technology:
Discriminatory bias could be factor with whomever is conducting the inspection of a home, whether it is an appraiser or a third-party inspector. There is evidence that algorithm-based decision-making tools can be designed in ways that create discriminatory outcomes. 4 Likewise, switching out one form of valuation for another sidesteps the necessary work of actively dismantling biased and discriminatory behavior. NAR urges FHFA to work with partner organizations, such as NAR and the Appraisal Foundation, to develop education and materials on bias, discrimination, and other fair housing related issues that speaks directly to the experience of the appraiser to truly address the issue with discrimination in the appraisal process.
Two quick observations on “partner organizations” mentioned in the piece:
Lack of leadership is one of the biggest issues facing the industry today – none of the big appraisal organizations are recognized by the real estate appraisal masses as leaders since they are mired in their problems or are focused on everything but appraisers themselves. I thought it was interesting that NAR didn’t mention the Appraisal Institute. And I found it even more interesting that The Appraisal Foundation was cited. Yet, TAF is the poster child for little to no representation of minorities and women through their three-decade existence. In fact, the TAF head of their diversity initiative is not a minority. The ASA seems like it would have been more worthy of a mention, not to take anything away from this excellent NAR thought piece.
OFT (One Final Thought)
I almost forgot about the Max Headroom  phenomenon on the mid-80s. It hasn’t aged well but it was a thing.
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- Real Estate Brokerage Compass Plans a 2021 IPO — What We Know [Fool] 
- Food Operators Flock to East 23rd Street By Madison Square Park [Commercial Observer] 
- Do Workers Fleeing House Price Growth Take the Boom with Them as They Go? [JCHS Harvard] 
- North America’s Biggest Bet on Downtowns Shifts to the Suburbs [Bloomberg] 
- Inside Compass — Part 1: Growth Strategies [Mike DelPrete – Real Estate Tech Strategist] 
- Denver housing market remains a tough nut to crack for first-time buyers [Denver Post] 
- Return-to-Office Plans Are Set in Motion, but Virus Uncertainty Remains [NY Times] 
- While Robust, U.K. Mortgage Approvals Slowed Slightly in January [Mansion Global] 
- 200 Amsterdam Avenue Condo Tower Project Wins Appeal [The Real Deal] 
- Compass S-1 IPO Filing Prospectus Highlights [The Real Deal] 
- Compass S-1 [SEC.GOV] 
- Women pay higher mortgage rates in 49 states [HousingWire] 
- Housing in Brief: Berkeley Says it Will End Single-Family Zoning, Which It Pioneered [Nextcity] 
- Secretary Pete Is Already Coming Through for New York City on Congestion Pricing [Curbed] 
- Here’s a Handsome Solution to New York’s Bike-Parking Crisis [Curbed] 
- Compass' S-1 IPO Filing Reveals $270M in 2020 Losses [The Real Deal] 
- Manhattan Office Rents Lowest Since 2018 as Supply Hits Record [Bloomberg] 
- Monthly Economic Indicators [PANYNJ] 
My New Content, Research and Mentions
- Barron's Live: Understanding Home Values in a Shifting Market on Apple Podcasts [Barron's] 
- Suburban Home Sales Soar in the New York Region [NY Times] 
- The Venice Real-Estate Market Is Unstoppable No More [Wall Street Journal] 
- LA condo market continues to surge, pending sales rise 90% in February [Livabl] 
- Greenwich Homebuying Contracts Soar With New York City Exodus [Yahoo Finance] 
- Home Sellers in Brooklyn, Manhattan Logged a Rip-Roaring February [Mansion Global] 
- Manhattan is 'catching up' as new contracts increase for the third consecutive month [Brick Underground] 
- Homebuying continues to skyrocket in Manhattan and Brooklyn [Crain's NY] 
- Greenwich Homebuying Contracts Soar With New York City Exodus [Bloomberg] 
- Manhattan apartment discounts may be ending soon as sales soar 73% in February [CNBC] 
- Townhouse Buyers Are Getting More for Their Money [NY Times] 
- LI pending home sales leveling off: Report [Newsday] 
- Compass rivals question path to profitability [HousingWire] 
- Cooped-up renters search market for amenities [Fox 5 NY] 
Recently Published Elliman Market Reports
- Elliman Report: Colorado New Signed Contracts 2-2021 [Miller Samuel] 
- Elliman Report: California New Signed Contracts 2-2021 [Miller Samuel] 
- Elliman Report: Florida New Signed Contracts 2-2021 [Miller Samuel] 
- Elliman Report: New York New Signed Contracts 2-2021 [Miller Samuel] 
- Elliman Report: Manhattan Decade 2011-2020 [Miller Samuel] 
- Elliman Report: Manhattan Townhouse Decade 2011-2020 [Miller Samuel] 
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 1-2021 [Miller Samuel] 
- Elliman Report: Hamptons/North Fork Decade 2011-2020 [Miller Samuel] 
- Elliman Report: Long Island Decade 2011-2020 [Miller Samuel] 
- Elliman Report: Long Island Sales 4Q 2020 [Miller Samuel] 
Appraisal Related Reads
- Dealing with a Subpoena [Working RE] 
- The Best Part Of My Job As An Appraiser [Yolo Solano Appraisal Blog] 
- When & How do Appraiser’s Adjust for Age? [Cleveland Appraisal Blog] 
- What It Will Take to Close the Race Gap in Home Appraisals [Bloomberg] 
- Birmingham Real Estate: 2019 vs 2020 [Tom Horn/Birmingham Appraisal Blog] 
- How much have prices risen since 2012? [Ryan Lundquist/Sacramento Appraisal Blog] 
- The Appraisal Foundation Document Library [Appraisal Foundation] 
- Epic Fail – AI Needs a Complete Makeover [Appraisers Blogs] 
- They Were on Equal Footing. Then the Ground Shifted. [NY Times] 
Extra Curricular Reads
- Walker 'stunned' to see ship hovering high above sea off Cornwall [The Guardian] 
- Anyone Who’s Anyone Has a SPAC Right Now [NY Times] 
- Alcohol Withdrawal Rates in Hospitalized Patients During the COVID-19 Pandemic [JAMA Network] 
- Zillow Listings for Earth [New Yorker] 
- Charted: Money Can Buy Happiness After All [Visual Capitalist] 
- John Prine’s Oh Boy Records Gets New Documentary [Pitchfork] 
- How to Practice [New Yorker] 
- Thank You, Dr. Zizmor [The Cut]