Squirreling Away Our Housing Data
This happens every…single…day.
I've said it before and I'll say it again, squirrels are bastards. pic.twitter.com/5G3d2x5Dzm— Amee Vanderpool (@girlsreallyrule) May 14, 2019
But I digress…
Hamptons Sellers Are Starting To Get The Message
Michael Kolomatsky of the Calculator column in the New York Times real estate section crafted a cool infographic for this weekend using data from the Douglas Elliman‘s Hamptons Sales report that I author. The gist of it is that sellers are slowly pricing closer to market causing days on market and the listing discount to compress somewhat. This faster moving pattern is in sharp contrast to sliding price trends, declining sales, and rising inventory. The narrative in this market clearly reflects a slowdown, but with a vibrant regional economy, the buyers are here, but unwilling to pay at price levels of a few years ago.
And there’s more to the high-end Hamptons story – here are a few others from this week:
In the High-Flying Hamptons, Real Estate Is in a Rut [New York Times
Chinese-Inspired Hamptons Home Resurfaces for $20 Million Less [Wall Street Journal]
From the beginning of Kathy Clarke’s WSJ story:
Amid a slow market, a Hamptons home with lots of China-inspired features is returning to market for $7.9 million—less than a third of the $28 million it briefly sought six years ago.
To the end of this WSJ story (sorry for inserting one of my quotes):
“This is a classic aspirational pricing story,” said appraiser Jonathan Miller. “Certainly we’re seeing some softness in pricing, but no where near what that price cut represents. It shows you how wildly overpriced many properties were during that period of peak luxury.”
Inside Edition TV: The Fifth Avenue Retail Apocolypse?
Real estate brokerage firm Cushman & Wakefield wrote a research piece on the prime Fifth Avenue retail corridor from 49th Street to 60th Street that was covered in a widely read Wall Street Journal article called Fifth Avenue Losing Luster as Vacancies Climb, Rents Fall. The following chart was in the WSJ article. Luxury real estate here peaked at about the same time.
Inside Edition reached out and asked me to take a stroll with reporter Les Trent on Fifth Avenue to talk about the state of luxury retail. Les was great to speak with and like a true pro, he had access to sidewalk chalk (see video). I think I am in a lot of tourist pictures as they were snapping my picture as we strolled up and down Fifth Avenue.
If you’ll notice in the video and article, all the vacancies were related to the fashion/clothing industries. The 1 out of 4 storefront vacancies – essentially 1 empty storefront on every block – is not reflective of NYC retail employment patterns, but simply the pullback of clothing/fashion industries from high-end retail locations as they place more resources toward their online presence.
Lower Priced Ground Floor Apartments Come At A Cost
The always must-read “Ask Real Estate” New York Times column by Ronda Kaysen had a great Q&A about a ground floor apartment.
Spoiler Alert: YES – the market confirms this because their sales and rental prices are much lower – Is It Crazy to Leave First-Floor Windows Open in New York? @rondakaysen @nytrealestate https://t.co/j0BjYfHMuY— Jonathan Miller (@jonathanmiller) May 17, 2019
The 123 comments so far on the column say it all, especially this one:
What’s more important to the both of you? Your safety or ventilation? Get a security gate and he should pay for it or a new boyfriend who cares more about you.
In my experience confirmed using empirical evidence, ground floor Manhattan apartments usually go for 10% to 15% less than the identical apartment a few floors higher. Why?
Amenities such as low natural light, high street noise, low privacy, and safety concerns pretty much sum it up. If you want to buy something 10-15% cheaper than a few floors higher, you're the demo.— Jonathan Miller (@jonathanmiller) May 17, 2019
UBS Bubble Index: New York and Boston Slightly Overpriced, Hong Kong Wildly Overpriced
I know this info is a tad dated, coming from an October 8, 2018 post on Visual Capitalist, but the UBS Global Real Estate Bubble Index still relevant and fascinating:
Wolf Bites: Rent Regulation and the Value of Townhouses
I’ve known and followed the writings of Manhattan real estate broker Wolf Jakubowski for years. There is a big movement in Albany towards additional rent regulations and this will have an impact on the Manhattan townhouse market. Here is his view from his “Wolf Bites” newsletter.
U.S. Economic Stats Seem Strong, But Why Doesn’t It Feel That Way?
Open and be sure to read this entire thread. Anecdotal takeaway: U.S. Companies, despite strong earnings and lots of cash, are unusally nervous.
Met with wide variety of CEOs, and c-suite management in large, mid and small companies over last few days. Some key themes emerged:— Diane Swonk (@DianeSwonk) May 16, 2019
Upcoming Speaking Events
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
Maureen Sweeney Wrote A Book!
My friend and Chicagoland appraiser Maureen Sweeney, SRA, AI-RRS, IFA, CDEI wrote an essential book on valuation, outside of the single family realm. The Valuation of Condominiums, Cooperatives, and PUDs is available at the Appraisal Institute web site.
I purchased the PDF version so I can refer to it on my iPhone while inspecting a co-op or condo which comprises 98% of my residential market (Manhattan). Just kidding. Yes, I purchased it but I won’t refer to it during the interior inspection. I’ll read it while I’m walking to and from my inspections.
New York RICS Conference – Session on Big Data
My friend and Head of Valuation for Natixis CIB, Cate Agnew, CRE, FRICS, CCIM, MAI, spoke on a panel of U.S. valuation leaders on the topic of big data at the recent RICS conference in New York. It was a fascinating discussion about “Big Data” with a mixture of “gee whiz” and “wait a second.”
It became quite apparent that big data aggregators there were arguing that even if they don’t have access to private data essential for valuing income property reliably, they would simply get more data and would be able to achieve an accurate result. I find this line of thinking completely misleading and self-serving. More raw data is not always better. Remember that aggregators like Zillow, Costar and others have no economic incentive to be accurate. They solve any problem with simply providing more data. Think about what is happening now in the real estate space. The aggregators are enjoying higher valuations while the actual providers of the raw data are losing value. Wait until blockchain becomes a force. All the aggregators will become irrelevant.
Appraisers are also providers of raw data and aggregators like CoreLogic or AMCs like Servicelink will be irrelevant down the road when blockchain gains critical mass. Otherwise, the service providers will eventually go bankrupt and these aggregators won’t have a data source. The current big data model, by definition, is not sustainable.
OFT (One Final Thought)
David Bowie's Advice to Artists, 1997. pic.twitter.com/HIZKjsEdVj— Meredith Frost (@MeredithFrost) May 14, 2019
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:
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- Is It Crazy to Leave First-Floor Windows Open in New York? [New York Times]
- Miami home values may have peaked. But how will that affect prices? [Miami Herald]
- A Car-Free Neighborhood Perched Above the Heart of Hollywood [Wall Street Journal]
- “Unequivocally not selling:” BHS accuses rival of stoking sale rumors [The Real Deal]
- House prices drop in three Southern California counties [OC Register]
- April home sales and price report [CAR]
- Congestion Pricing Is Bad News for Parking Garages in New York [Wall Street Journal]
- The Real Estate Industry Plagued By Highly Public Clashes [Forbes]
- I toured the most expensive condo for sale in Miami, a $48 million 'mansion in the sky' with a 6,000-square-foot private terrace and a pool. Take a look inside the 3-story penthouse. [Greenwich Time]
- CBS founder’s NYC mansion back on market after huge price chop [NY Post]
- Market News From Trulia on Housing Inventory Trends [Forbes]
- Discovery Channel Founder Lists Remote Colorado Ranch for $279 Million [Wall Street Journal]
- The internet didn't shrink 6% real estate commissions. But this lawsuit might [CNN]
- The World’s Biggest Real Estate Bubbles in 2018 [Visual Capitalist]
- Maui home sales plunged in April [National Mortgage News]
- VIDEO: Is Fifth Avenue Too Expensive for Retailers? [Inside edition]
- The real estate market is hot again — unless you're selling a luxury home [NBC News]
- Preferred equity plays are on the rise, but what’s the catch? [The Real Deal]
- This “pocket neighborhood” has 8 houses on a lot, instead of one McMansion [Fast Company]
- Opinion: Why NYC is Rapidly Losing Low-Rent Apartments [City Limits]
- A Florida Man May Lose His Home—Because He Didn't Cut the Grass [SF Gate]
- Fannie and Freddie Back More Mortgages of Those Deeply in Debt [Wall Street Journal]
- What Do We Call It When the Rich Displace the Middle Class? [Slate]
- Are Australian Citizens Exempt From All Property Taxes on Primary Residences in the Country? [Mansion Global]
- How Vancouver became the world’s ‘laundromat for foreign organized crime’ [Bloomberg News]
- What Might a DC "Mansion Tax" Look Like? [Washingtonian (DC)]
- Bobby Flay Fillets Out $6.5 Million for Tasty Bird Streets Chalet [Variety]
- Billions laundered through B.C. real estate, spiking housing prices: report [BC.CTV News]
- Home price gains keep shrinking, but housing is still overpriced [CNBC]
My New Content, Research and Mentions
- Trump's tax overhaul is taking a serious toll on the Hamptons real-estate market [Business Insider]
- One Ocean's condo association sues Related alleging shoddy construction [The Real Deal]
- In the High-Flying Hamptons, Real Estate Is in a Rut [New York Times]
- Chinese-Inspired Hamptons Home Resurfaces for $20 Million Less [Wall Street Journal]
- A Snapshot of the Hamptons [New York Times]
- The Retail Apocalypse Is Real in NYC: Is it Headed for Texas? [CandysDirt.com]
- SOME CRUCIAL TIPS TO SURVIVING DISRUPTION… [Active Rain]
- A SLIPPERY SLOPE FOR ASPEN [Abode2]
- Why Manhattan’s Fifth Avenue May Be Losing Its Luster [Inside Edition]
- 看得见纽约绝美风景的房间 [Toutiao]
- Trophy homes: how the super-wealthy struggle to value their properties [Financial Times]
- Douglas Elliman Releases April 2019 Rental Market Report for Manhattan, Brooklyn and Queens [Citybizlist]
Appraisal Related Reads
- Complex Residential Properties Offer Challenges to Appraisers, New Book Finds [Maureen Sweeney/Appraisal Institute]
- Score Card, Turn Times, Undue Pressure & Appraisal Independence [Anon/Appraisersblogs]
- Fannie Mae Plans Massive Changes to Appraisal Process [WorkingRE]
- Solar panels & a normalish spring market [Sacramento Appraisal Blog]
- AMC Consents to Negligent Conduct [Vacap Online]
- 5 Signs That Your Home Is Overpriced And What To Do About It [Birmingham Appraisal Blog]
- What is a Barndominium? [DW Slater Appraisal Blog]
- Protecting Appraisers Against Frivolous & Retaliatory 3rd Party Lawsuits [Mike Ford/Appraisers Blogs]
- Op-Ed Highlights Consequences of NCUA Appraisal Threshold Proposal [ABA Banking Journal]
- It Is ALWAYS Inappropriate for an AMC to Request an Unlocked Report [Jonathan Miller/Appraiserblogs]
Extra Curricular Reads
- I.M. Pei, World-Renowned Architect, Is Dead at 102 [NY Times]
- Podcast: Pixies Podcast Trailer — Past is Prologue [Signalco1]
- 354- Weeding is Fundamental — 99% Invisible — Overcast [99 Percent Invisible]
- Young, Stupid, and Overconfident [Inc]
- Whoa After Whoa: The Best of Keanu Reeves [The Ringer]
- 1994 Was a Prison of My Own Making [NY Times]
- Doris Day was a conservative icon amid a turbulent counterculture. But her life belied her persona. [Vox]
- Farmers Plow Through Netflix While Plowing Fields [Wall Street Journal]
- Supreme Court Allows Antitrust Lawsuit Against Apple to Proceed [NY Times]
- For 40 Years, This Russian Family Was Cut Off From All Human Contact, Unaware of World War II [Smithsonian Mag]
- I protected my privacy by ditching Chrome for Brave–and so should you [Fast Company]