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Housing Notes

October 16, 2020

Housing Forecast Accuracy We All Aspire To

Accuracy is often underappreciated.

 
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THE ACCURACY. 🔥🔥🔥 (via LovoCristian/TW)

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But I digress…

The Greenwich, Connecticut Housing Market Regains Its Mojo For Now

I’ve been the author of an expanding series of market reports for Douglas Elliman Real Estate for the last 25 years.

Long forgotten after the financial crisis as buyers skipped over the suburbs to the city, drawn in by the promises of new urbanism (i.e. walkability and being able to buy strawberries at 3 am) the Greenwich market has finally re-awakened.

Apparently Wall Street still loves Greenwich as the Bloomberg story on the housing market that included our Greenwich research was the 4th most emailed article of the day (from late morning until late afternoon) by the 350K Bloomberg Terminal subscribers. The Fairfield County report where Greenwich is located, and Downtown Boston reports were also released.

And a Bloomberg Greenwich chart…

Elliman Report: Q3 2020 Greenwich Sales Elliman Report: Q3 2020 Fairfield County Sales Elliman Report: Q3 2020 Downtown Boston Sales


GREENWICH SALES HIGHLIGHTS

“Sales surged higher year over year, rebounding quickly from the decline in spring market activity at the onset of the COVID crisis.”

  • Single-family sales surged to their highest level in at least a decade
  • Single-family listing inventory fell sharply from the prior quarter
  • Condo price trend indicators and sales surged from the prior-year quarter
  • Luxury listing inventory declined year over year for the sixth straight quarter
  • Back Country showed its fastest-moving pace in at least five years of tracking


FAIRFIELD COUNTY SALES HIGHLIGHTS

“Sales surged higher year over year, rebounding quickly from the decline in spring market activity at the onset of the COVID crisis.”

  • The three overall price trend indicators reached new record highs in more than sixteen years of tracking
  • The number of sales rose to the highest total in sixteen years of recording
  • Listing inventory fell at the highest annual rate in twenty-three years, reaching the lowest level in twenty-four years
  • Luxury listing inventory fell to its lowest level in six years of recording
  • Luxury sales saw the least negotiability in more than thirteen years


DOWNTOWN BOSTON SALES HIGHLIGHTS

CONDO “Sales edged higher year over year, rebounding quickly from the sharp drop in spring market activity at the onset of the COVID crisis.”

  • The number of sales edged higher year over year for the third time in four quarters
  • Listing inventory rose annually to the highest level in more than nine years
  • Median sales price declined annually for the second straight quarter after rising for the previous four

TOWNHOUSE “Sales clawed back most of the previous quarter’s decline in spring market activity at the onset of the COVID crisis.”

  • The number of sales declined year over year for the fourth straight quarter
  • Listing inventory rose sharply year over year over the past two quarters
  • Median sales price fell annually for the second consecutive quarter after rising for the previous seven

VIDEO: 92Y City of Tomorrow: Are People Giving up on New York City?

Short answer, not really. This 92Y panel I was on was brilliantly moderated by Brad Grossman, and included myself, Dr. Ayman El-Mohandes, Mindy Fullilove and Lindsay Greene. It was 30 minutes of insights that I got a lot out of.

[click to open video landing page]

PODCAST: The Comeback With Jonathan Miller

Last month I spoke with transactional attorneys Alan Perlowitz, Esq. and Andrew Luftig, Esq. of Chaves Perlowitz Luftig LLP for their “The Comeback” Podcast that chronicles the housing market recovery out of the COVID lockdown. These guys want to share their experiences and speak to the real estate brokerage industry all the time. In the middle of the lockdown when I was about to speak on a panel with Andrew, I suggested he compile their results (anonymized) as a report and they did so almost immediately!

Florida Housing Markets Feel The Burn (Of More Activity)

Douglas Elliman published a slew of our market research this week and activity remained high. In fact on a quarter-over-quarter basis, most of the markets sales rebounded 50% to 100% from the previous quarter.

The Elliman Reports for Florida released this week can be found here (click on “Florida”)

I ran out of time inserting charts into all of the Florida markets, but you can view them here in our chart gallery.

[alphabetical order]


BOCA RATON / HIGHLAND BEACH HIGHLIGHTS

“Sales rose sharply higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • In a rebound from the prior quarter, condo and single family sales saw their largest annual rise in seven years
  • All single family price trend indicators rose year over year as sales saw its largest jump in nearly nine years
  • All luxury condo price trend indicators showed a substantial year over year increase


CORAL GABLES HIGHLIGHTS

“Total market sales pressed higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Single family sales surged and listing inventory fell from the prior year quarter as the lockdown ended
  • Condo listing inventory declined annually for the fifth consecutive quarter
  • Luxury single family listing inventory declined sharply year over year for five straight quarters


DELRAY BEACH HIGHLIGHTS

“Total market sales pressed higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Single family sales increased at their highest year over year rate in five years
  • Condo sales reached their highest third-quarter total in twenty-two years of tracking
  • Both single family and condo luxury listing inventory fell sharply from the prior year total


FORT LAUDERDALE HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • All condo price trend indicators rose year over year as the number of sales jumped
  • Single family sales surged, and listing inventory fell sharply from the prior-year quarter
  • Single family median sales price increased annually for the eighth consecutive quarter


JUPITER / PALM BEACH GARDENS HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

JUPITER – Single family sales jumped year over year as listing inventory dropped sharply – The most third-quarter condo sales in fifteen years

PALM BEACH GARDENS – The most third quarter single family sales in fifteen years – Condo listing inventory declined annually for the sixth straight quarter


MANALAPAN HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

MANALAPAN, HYPOLUXO ISLAND & OCEAN RIDGE – Single family sales surged from the year-ago quarter, rising for the first time five quarters – Listing inventory declined annually for the third time in the four recent quarters – All price trend indicators slipped from year-ago levels as listing discount rose to the highest level in more than a year


MIAMI BEACH/BARRIER ISLANDS HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Condo price trend indicators increased as sales and listing inventory edged higher
  • Overall single family price trend indicators set new records as sales surged year over year
  • Luxury condo price trend indicators jumped year over year, aided by a shift to larger sized sales

MIAMI COASTAL MAINLAND HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Condo price trend indicators and sales moved higher as listing inventory slipped to a three-year low
  • Single family price trend indicators set new records as sales rose to their highest level in more than five years
  • Luxury condo price trend indicators increased year over year as listing inventory declined annually for the second time in three quarters

PALM BEACH HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • All three condo price trend indicators increased year over year for the fifth straight quarter
  • Single family sales nearly tripled from the year-ago quarter as listing inventory fell sharply
  • Luxury listing inventory fell significantly year over year for the third consecutive quarter

ST. PETERSBURG HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Single family price median sales price has risen annually each quarter for nearly nine years
  • Condo listing inventory has declined year over year for the first time in six quarters
  • Markets including Snell Isle, Historic Old Northeast, and Downtown have all seen large year over year gains in sales levels

TAMPA HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

SOUTH TAMPA – Single family sales fell annually for the third time in four quarters as inventory posted a large decline – Condo listing inventory declined for the fifth consecutive quarter as the overall price trend indicators pressed higher

GREATER DOWNTOWN TAMPA – Downtown price trend indicators and the number of sales rose above prior-year quarter levels – Davis Island sales and price trend indicators increased as listing inventory slipped


WELLINGTON HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Condo sales surged annually at their highest rate in eleven years as listing inventory edged higher for the second straight quarter
  • Single family median sales price rose annually for the twelfth straight quarter as listing inventory dropped sharply
  • Luxury condo median sales price more than doubled year over year as listing inventory saw a significant annual decline

WEST PALM BEACH HIGHLIGHTS

“Sales rose higher year over year, rebounding quickly from the restraint of spring market activity at the onset of the COVID crisis.”

  • Condo median sales price has risen each quarter on a year over year for more than nine years
  • Single family listing inventory has fallen at a rising year over year rate for five consecutive quarters
  • Luxury condo listing inventory has posted large annual gains for three of the past four quarters

Bloomberg TV – Ivy Zelman On How U.S. Homebuilders Can’t Keep Up With Demand

My friend and one of the best housing analysts out there, Ivy Zelman of Zelman & Associates spoke with Bloomberg’s Joe Weisenthal on his show “What’d Ya Miss?. Joe was one of my favorite all time bloggers pre-Bloomberg gig.

The latest data shows that U.S. new home sales advanced to the highest level in almost 14 years as record-low mortgage rates continued to entice buyers into a market with ever-shrinking supply. Ivy Zelman, CEO of Zelman & Associates, speaks with Bloomberg’s Caroline Hyde, Romaine Bostick and Joe Weisenthal on “What’d You Miss?” about the boom in U.S. housing. (Source: Bloomberg)

Getting Graphic

Our favorite charts of the week of our own making

Len Kiefer‘s Chart Handiwork


Appraiserville

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

How Many Days Until TAF Takes Down ASC ‘Oversight’ Mentions?

I’m not a gambling man, but after I point out the following, I want to take bets on how long it takes TAF to remove references to their clear belief in ASC’s right to ‘oversight’ and how it contradicts the statements and actions of their recent “bat-shit crazy” letter that TAF sent to ASC proclaiming ASC has no right to provide oversight – only “monitor and review.”

Something is clearly tainted in the water at TAF that has eliminated their long term memory. After all, there are three clear references as of today that provide an acknowledgment that ASC has ‘oversight’ rights over TAF. As I’ve mentioned before, it is quite bizarre that TAF suddenly believes that Congress created a non-profit that seems focused largely on money reflected by how hard they have fought to renew USPAP every two years but has no “oversight.” I’ll bet Congress is now learning about this change in philosophy, especially with the non-profit having the same leader for more than three decades.

The following pages on the TAF website illustrate TAF’s firm belief that ASC has clear oversight over TAF. The following references have been on the website as long as I can remember – I’m guessing at least a decade, but that’s just a guess. I’ve shared screenshots here to confirm this when the references are removed later on.

Exhibit I

The following graphic describes the “oversight by ASC on TAF” on The Appraiser Regulatory System in the United States page (bold my emphasis):

Provides oversight, funding & services to ensure compliance with Title XI of FIRREA; members are from federal finance-related entities.

Exhibit II

On the same page as Exhibit I, a similar reference to “oversight” by ASC on TAF can be found (bold my emphasis):

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council has oversight authority over the states and the Foundation to ensure the minimum qualifying criteria to license and certify real estate appraisers are implemented and that appraisers are held to a professional set of ethical standards.

 

Exhibit III

Another similar reference to “oversight” by ASC on TAF can be found (bold my emphasis):

The ASC is responsible for monitoring the individual states in the licensing and certification of real property appraisers. In addition, the ASC acts as an oversight mechanism for activities of The Appraisal Foundation (Foundation) relating to real property appraisal.

 

Kelly Davids at IAC/TAF: TAF Will Do Beautiful Things With Scott Dibiasio of AI

On the last IAC call, Kelly Davids, Senior Vice President of TAF announced TAF plans to do (and I’m paraphrasing) beautiful things together with Scott Dibiasio of the Appraisal Institute. That’s a shocking revelation and illustrates how desperate TAF is to have a friend during this rogue adventure they seem to insist on having. Prediction: This will end badly for current TAF leadership.

For more than a decade, The Appraisal Foundation (TAF) and The Appraisal Institute (AI) were arch enemies – and that’s a clear understatement. The feud has been all about the two leaders of two institutions – Dave Bunton of TAF and Jim Amorin (and his group) of AI (a.k.a. Hatfields & McCoys). The vitriol between these two individuals is legendary and has been all over the public space for years, illustrating a disconnect that does nothing but selling actual residential real property appraisers short. I’ve seen it first hand. I was there when TAFAC voted down AI from re-joining because they wouldn’t agree to the TAF mission statement which was insane for AI to even try that tactic. A bunch of AI appraisers with MAI designations during the contentious vote actually said: “The mission statement is just a sentence!” They were so wrapped up in their bias with AI that they didn’t realize what they were actually saying. How can you be a member of an organization but disagree with its mission statement? It’s been an endless AI v. TAF soap opera that has redirected efforts away from the well-being of residential appraisers.

In fact, TAF has sent many of their former employees to testify around the U.S. to stop the damage and misinformation that Scott Debiasio has perpetuated. AI seemed to have thoughts about being the replacement for TAF to get all that money from the license registry, much like they took all the money from their local AI chapters. Long ago, I shared Scott’s testimony at the Montana real estate appraisal board where he essentially said he didn’t need them and would go straight to the legislature. What he didn’t realize at the time, is that the legislature would simply defer law changes to the real estate board for guidance – that demonstrates the culture of arrogance and incompetence within the operational leadership of AI.

And Scott continues to work against residential appraisers on a state level. The absurdity of TAF reaching out and being best friends with AI after all that is quite bizarre but shows the incredible scale of desperation. I’m certainly not saying the two institutions shouldn’t try to mend fences, but the AI corruption at the top still exists with the recent Quid Pro Quo: The Right Candidate Got Elected And Corrupt Leadership Got To Keep Their Sham Election Maneuver.

Industry-loved 16-year TAF Veteran John Brenan Presented With The ‘Chair’s Public Service Award’ From TAF Board of Trustees

Over the years John Brenan carried the water for The Appraisal Foundation (not to diminish the contribution of the other half dozen or so TAF employees that left in the past several years). He has presented USPAP and all things appraisal seemingly 24/7 during my career. He lived and breathed the actual mission of The Appraisal Foundation. I always found him to be highly knowledgeable, always professional, always accessible, but most importantly, always got my Dad jokes.

When he left, he was recognized for his contribution to the institution with the prestigious ‘Chair’s Public Service Award’ From TAF Board of Trustees.

This was a well-deserved public recognition of John’s contributions to TAF and the appraisal industry. It also speaks to the devasting loss of institutional knowledge at TAF with the exodus of staff with decades of experience in recent years and how TAF’s recent actions reflect a pivot away from focus on the appraisal industry to focus on a non-profit making a lot of money and claiming no one has the right to give them oversight. That “bat-shit crazy” letter serves as an historical marker of the collapse in the integrity and credibility of today’s TAF.

And it’s going to get worse.

Who is going to work to protect the public trust now and protect residential appraisers?

OFT (One Final Thought)

For reasons I don’t understand, I found this ‘homebuilding in a van’ video very inspirational.

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 be more accurate;
  • You’ll be buying a van;
  • And I’ll write some more market reports.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


October 9, 2020

With A Post-lockdown Eruption, Housing Rocks On

We lost a music legend, Eddie Van Halen (note that the NYT article subheader was ‘An Appraisal’), this week. An actual “his obituary made the front page of the New York Times” legend. I remember when I was a freshman in college at Michigan State and my roommate and best friend dropped the first Van Halen album on the turntable and played ‘Runnin with the Devil’ and ‘Eruption’ almost blowing out the cheap speakers held together with bright green, yellow, and white daisy-illustrated wallpaper inside…and my mind. Growing up in the DC metro area, we lived on southern rock- Little Feat and Lynyrd Skynyrd dominated my listening time and incredibly, I had never heard of Van Halen. I’ve have continued to love their sound ever since.

This 2017 interview was the first time I’ve ever heard Eddie speak. I had been inundated with lead singer David Lee Roth talking on MTV 24/7 seemingly forever, but not Eddie. And Eddie seems like he’s a regular guy. The entire interview from 3 years ago is really, really fun, but I embedded it below where he starts playing for the audience. Wow. This is why every teenager I knew growing up wanted to be in a rock band.


But I digress…

The Westchester Housing Market Sees Largest Jump in Median Sales Price in Nearly Three Decades

I’ve been the author of the Elliman market report series over the past 25 years and this week they released our quarterly report research for NYC suburban counties of Westchester, Putnam, and Dutchess, plus Brooklyn, Queens, and Riverdale (Bronx) in the city. In addition, Douglas Elliman released the monthly Manhattan, Brooklyn and Queens rental report. All these reports are available here.

Let’s start with the suburbs:

______________________________________________________
WESTCHESTER SALES MARKET HIGHLIGHTS

Elliman Report: Q3 2020 Westchester Sales

“The county saw a quick return to pre-COVID sales levels and a large bump in price trend indicators.”

  • Monthly of supply coming out of the spring lockdown fueled the fastest market pace in twenty-nine years
  • Median sales price increased year over year at the highest rate in more than twenty-eight years
  • The number of sales nearly clawed back their year over year losses after the spring lockdown ended
  • Listing inventory declined annually for the fifth straight quarter
  • Single family average sales size rose to its largest average size in thirty years
  • Single family sales accounted for the highest market share by property share in seventeen years
  • Luxury single family median sales price saw its largest year over year increase in more than six years
  • Luxury listing inventory fell year over year for the sixth straight quarter

Bloomberg presented an amazing chart within its report coverage.


And Wall Street ate it up (the article) with 350K Bloomberg Terminal subscribers making it the third most emailed article of the day.

And some more charts…

______________________________________________________
PUTNAM SALES MARKET HIGHLIGHTS

Elliman Report: Q3 2020 Putnam/Dutchess Sales

“The county saw a quick return to pre-COVID sales levels and a large bump in price trend indicators.”

  • Highest year over year increase in median sales price in ten quarters
  • Listing inventory saw the largest annual decline in nearly four years
  • The number of sales rebounded immediately after the spring lockdown ended

______________________________________________________
DUTCHESS SALES MARKET HIGHLIGHTS

Elliman Report: Q3 2020 Putnam/Dutchess Sales

“The county saw a quick return to pre-COVID sales levels and a large bump in price trend indicators.”

  • Monthly of supply fell to the fastest market pace in six years of tracking
  • Highest year over year increase in median sales price in two years
  • Listing inventory saw its second-largest annual decline in four years


Flood Damage in South France Has Played Havoc With Their Homes

From the BBC: Storm Alex: Floods and landslides hit France and Italy. And this picture – wow – a beautiful home seemingly unharmed but not habitable anymore.

TOPSHOT – This aerial view taken on October 3, 2020 shows the damage in Saint-Martin-Vesubie, southeastern France, after heavy rains and floodings hit the Alpes-Maritimes department. – Heavy rains and brutal floods have left villages cut off from the world in the Alpes Maritimes, where hundreds of fire-fighters have been mobilised on October 3, to find nine missing persons. (Photo by Valery HACHE / AFP) (Photo by VALERY HACHE/AFP via Getty Images)



The Manhattan, Brooklyn and Queens Rental Markets Continue To Weaken

The affordability of NYC apartments has been rapidly surging since COVID crisis began.


MANHATTAN RENTAL MARKET HIGHLIGHTS

Elliman Report: Manhattan, Brooklyn and Queens September 2020

“New leases reached their prior-year level as vacancy rates and listing inventory set new records.”

  • Listing inventory set a fourteen-year record, more than tripling the year-ago total, but the monthly rate of growth slowed significantly
  • The market share of landlord concessions reached a new record for the decade it has been tracked
  • The amount of free rent tied a decade high this month
  • The vacancy rate exceeded five percent for the second month time and was the fifth consecutive month with a new record
  • The year over year net effective median rent for studios and 1-bedrooms saw the largest decline in the four years of tracking
  • Landlord concession market share for luxury rentals was substantially less than the overall market

The Bloomberg piece that covered our report also presented a chart two-fer within its report coverage.


And like the above-mentioned Westchester report (the article), 350K Bloomberg Terminal subscribers made it the fourth most emailed article of the day (yesterday).

______________________________________________________
BROOKLYN RENTAL MARKET HIGHLIGHTS

“New leases rose above year-ago levels as landlord concessions expanded.”

  • Listing inventory increased to a record high for the third straight month
  • The number of new leases rose annually at their highest rate in fourteen months
  • Luxury median rental price showed a large increase while the market-wide median rent slipped from the same period last year

______________________________________________________
QUEENS RENTAL MARKET HIGHLIGHTS

[Northwest Region] “All rental price trend indicators decreased year over year since May under the COVID lockdown.”

  • Net effective median rent declined year over year for the fifth straight month, at the highest rate in more than two years
  • Listing inventory expanded year over year at the highest rate in nearly five years
  • Highest market share of 2-bedroom apartment rentals for almost four years


Realtor.com Goes Old English On Its Listings

I came across a listing yesterday on Realtor.com. It read “The property was sold thrice in the past twenty years” and I was instantly transported back in time to 1978 in the summer after high school graduation and the Commodores song “Three Times A Lady” playing on the radio every hour.

Imagine if the song went like this: “Once, Twice, Thrice Times a Lady.” It just wouldn’t work and those memories would have never happened. I can only assume some of Realtor.com’s programmers are from the UK and never listened to the Commodores.



Brooklyn, Queens, and Riverdale Post-Lockdown Markets Are Crawling Back

Most of NYC is outperforming Manhattan right now in the context of closed sales.

______________________________________________________
BROOKLYN SALES MARKET HIGHLIGHTS

Elliman Report: Q3 2020 Brooklyn Sales

“This quarterly report largely reflects sales contracts that were signed during and after the COVID lockdown that ended in late June.”

  • The number of sales fell at the largest year over year rate in more than eleven years
  • The largest annual decline in listing inventory in three and a half years
  • Median sales price hasn’t seen an annual decline in five months


______________________________________________________
QUEENS SALES MARKET HIGHLIGHTS

Elliman Report: Q3 2020 Queens Sales

“Sales fell sharply year over year for the second straight quarter as many of the contracts were signed during and shortly after the COVID lockdown.”

  • The number of sales fell at their second highest year over year rate in more than nine years
  • Median sales price slipped nominally on a year over year basis for the first decline in eighteen months
  • Listing inventory increased to its highest level in more than seven years


______________________________________________________
RIVERDALE SALES MARKET HIGHLIGHTS
[includes Fieldston, Hudson Hill, North Riverdale and Spuyten Duyvil in the Bronx]

Elliman Report: Q3 2020 Riverdale Sales

“Sales fell sharply year over year for the second straight quarter as many of the contracts were signed during and shortly after the COVID lockdown.”

  • Largest amount of listing inventory to accumulate in three years
  • Largest year over year decline in median sales price in over three years
  • Highest annual decline in the number of sales in more than nine years

The NYC Housing Trend Narrative is Changing From Hyperbole To Affordability

This Sunday’s NYT Real Estate cover is a barn burner: New York Real Estate Is On the Mend

And its author Stefanos Chen has a related tweet thread that is required reading…and I like his “peeling back the onion” metaphor in the story because its very “tortoise versus hare”-like…

Getting Graphic


Our favorite charts of the week

Here’s a chart I whipped up to give the proper visual context to the spiking vacancy rate in the Manhattan rental market. Click on the image to appreciate the intensity of it.


And here are some other cool charts I saw this week.



Len Kiefer‘s Chart Handiwork



Appraiserville

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

RAC Member and Former RAC President Byron Miller Appointed to the AQB Board

My good friend and appraiser colleague Byron Miller, SRA, AI-RRS, RAA was just appointed to the Appraiser Qualifications Board (AQB) of the appraisal foundation. A former engineer, Byron is one of those people that doesn’t miss the details. Congrats!!!

TAF Adds a Lot of Green to Its Already Huge Reserves

This month, the Board of Trustees of the Appraisal Foundation sent another $1.2 million to their $6.5 million in reserves (the latter per Jeremy ‘Cosmic Cobra’ Bagott). Since that $6.5M figure is a bit old, it looks like TAF has around $8 million in reserves which is enough for two years of operations. I believe that 6-12 months is more the standard so why the stockpile?

At what point does a not for profit become a for-profit? With all this money, shouldn’t they be offering USPAP or classes for free or at a significant discount? So many questions.

Former AI President Scott Robinson Named To The ASB and TAF Gets a Trojan Horse

Recently I was critical of TAF’s Appraisal Standards Board (ASB) for being overrepresented by personal property appraisers who have no business being on ASB since setting standards largely applies to real property appraisers. Real property appraisers have a “bullseye on their back” being subject to state enforcement while personal property appraisers do not.

Thankfully I believe that there are now 5 real property appraisers on the board, plus a business appraiser and two personal property appraisers. It’s a start, although it doesn’t change the fact that personal property appraisers have no business being on a technical board like AQB and ASB. Membership on the BOT makes sense as long as its not the majority.

A new ASB member is real property appraiser Craig Morley, GAA, MNAA who is a member of two state coalitions – Coalition of Appraisers of Nevada (CAN), and Utah Association of Appraisers (UAA).

And then there is Scott Robinson. Scott, who led the way for AI National to take all their chapters’ money (this post went viral) and place it under AI National’s control, helped fuel my initial outrage against the Appraisal Institute’s corrupt behavior, expanding under CEO Jim Amorin’s leadership with their recent sham election process. And hey, I’m not even an AI member but I recognize the damage they have caused to the branding of our industry to outsiders which helps to threaten our future. When AI national operational leadership is cleaned up, I look forward to AI leadership working for their members and returning once again to a position of appraisal industry leadership. That day can’t come soon enough.

The thing is, Scott and the Appraisal Institute do not believe in TAF’s two-year renewal cycle and we’ve all witnessed AI’s decade or more efforts to undermine TAF. Dave Bunton has written about it and it is basically a Hatfield/McCoy type feud. I was at the TAFAC meeting a while back when AI was rejected because they would not agree to TAF’s mission statement yet wanted to return to the organization.

The fact that TAF has brought in a serious internal threat shows just how desperate TAF is now to have another organization to team up with so they aren’t left alone twisting in the wind. As has been discussed here in Appraiserville early and often, TAF has gone on the public offensive against the Appraisal Subcommittee (ASC) who is responsible for reviewing and monitoring TAF. As we learned from what I lovingly call the “bat-shit crazy” letter that TAF sent to ASC, TAF rejects the idea of anyone providing “oversight” (TAF contends Congress didn’t intend ASC provide oversight which means no oversight?), even if that mandate comes from Congress. So from that “letter,” the ASC in their monitor and review responsibility, is now not allowed to be unmuted or be shown by video during TAF Zoom calls. This is unbelievably adversarial and childish, showing pushback to the regulatory process using pettiness, disrespect, and arrogance which ultimately is directed at the appraisal community. Have fun and have at it, Scott.

OFT (One Final Thought)

I found this race in Medellin, Colombia very cathartic to watch – what percentage of the time is the rider actually touching the ground? High speed, high risk, downhill, and most people only see small portions of it. (!!!) A new housing metaphor is born.


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 riff Van Halen;
  • You’ll ride your bike down steps more often;
  • And I’ll listen to my old Van Halen records again while riding my bike down the stairs.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


September 11, 2020

The Housing Market Did Not Fall Like Dominoes From COVID

One of the benefits of quarantine has been the sheer brilliance of innovation by our youth. I regret not coming up with this innovation when I lived in the dorms. Sign.


But I digress…

The New York City Rental Market is Weak and Getting Weaker

Douglas Elliman Real Estate published our August rental market analysis this week and the news wasn’t great. I’ve been the author of this expanding Elliman Report series since 1994.

Elliman Report: August 2020 Manhattan, Brooklyn & Queens Rentals

This rental report covered the second full month since the lockdown expired on June 22 and interest in the findings was intense. The Bloomberg story was the most emailed article yesterday by the 350K Bloomberg Terminal subscribers.

Now this is a chart…(using Crocodile Dundee’s voice for “now this is a knife.”)

The takeaway from the report is that this was a record month of records and it stems largely from the drop in would-be tenants that moved to other boroughs or out of the city, mostly Manhattan, to rent or buy in the suburbs or second home markets.

______________________________________________________
MANHATTAN RENTAL MARKET HIGHLIGHTS

“With a nominal month over month uptick in new lease signings, activity appeared to bottom in last month.”

  • The largest market share of landlord concessions in nearly a decade of tracking
  • Highest total of listing inventory in over fourteen years and third straight monthly record
  • The vacancy rate exceeds five percent for the first time and the fourth consecutive month with a new record
  • Most substantial year over year decline in studio and 1-bedroom median price in eight years of tracking
  • Existing and new development median rent fell annually for the third time in four months
  • While all price segments covered, saw declines, more significant reductions occurred in the lower price strata
  • Concessions market share for non-luxury rentals was above luxury rentals and rose to their highest level since 2015

______________________________________________________
BROOKLYN RENTAL MARKET HIGHLIGHTS

“Listing inventory doubled from its year-ago level despite the moderate decline in the number of new leases.”

  • Listing inventory reached an eleven and a half year high for the second straight month
  • Net effective median rent fell year over year for the second consecutive month after nineteen months of gains
  • Three out of four new development new signed leases had a landlord concession

______________________________________________________
QUEENS RENTAL MARKET HIGHLIGHTS
[Northwest Region]

“Listing inventory rose to its second-highest level recorded as new leasing activity fell for the thirteenth straight month.”

  • Thirteenth consecutive year over year decline in new leases with second-highest inventory total recorded
  • The fourth straight annual decline in net effective rent
  • The most significant yearly surge in listing inventory in four and a half years

NBC News 4 New York Covered The Softening Rental Market Conditions

@Glorioso4NY gets the rental market nuances in his segment on the report:

The New York Times Corrected The Narrative On NYC’s Outbound Migration

In this coming weekend’s New York Times real estate cover story, In New Development, Buyers Favor the Boroughs – Yes, some buyers are leaving Manhattan. But others are doubling down on Brooklyn and Queens.

The article includes a cool research piece on new development contract activity.

And the following thread provides a nice summary of what is actually happening and accurately tags me as the “OG appraiser” so there’s that.


Upcoming Speaking Events

What’s In Store For New York City Real Estate in 2020 and Beyond!

I’m joining my friend and co-data nerd Noah Rosenblatt of Urban Digs for a live 1 on 1 discussion moderated by John Walkup, also of Urban Digs.

Urbandigs is a great resource and I love to connect with these guys. Register and mark your calendar for September 17th at 11 am!

[click on image to register]

Appraiserville

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

The Appraisal Foundation Is Pivoting Its Alliances To Maintain Relevancy

These are my observations from The Appraisal Foundation’s perspective on how the unthinkable simply happens in this progression:

  • For years: “The Appraisal Institute is worse than the devil” and “We have enjoyed a long partnering relationship with The Appraisal Subcommittee.”

  • Recent history: “The Appraisal Subcommittee has no oversight rights and will not be allowed to speak at our meetings” (While the ASC continues to work with the Appraisal Institute.)

  • Latest history: While scrambling…”The Appraisal Institute is an organization we can work with to solve our respective complete lack of diversities.” Given the vitriol exchanged between AI CEO Jim Amorin and TAF President Dave Bunton, this seems absolutely impossible and to most of the people I interact within their circles, the only end to this Hatfields & McCoys type feud is when both of these people exit their organizations. It’s deeply personal.

So that’s why I am scratching my head about this and believe it is happening because TAF is currently all alone and needs to align with another organization to maintain its relevancy.

OFT (One Final Thought)

September 11, 2001.

Never Forget.

Here is some of what I remember on that day when I saw the towers burn in person…

On the street level outside our office buildings on September 11, 2001, all the appliance stores had their TVs in the windows switched to CNN which was zoomed in on the gaping holes in the towers. My office was on West 45th Street in Manhattan’s Midtown central business district. I walked west to the end of my block towards Avenue of the Americas and then walked east towards Fifth Avenue. From both vantage points, I could see that the twin towers were clearly on fire. Numb, I went back to my office to close up and send everyone home. My wife called me crying that now there was only one tower left, the other had just fallen. I was getting emails from colleagues in other parts of the world asking if I was still alive. I often think of the times I went to the Windows on the World restaurant at the top, buying an ice cream cone at Ben & Jerry’s in the ground floor mall after an appraisal in Battery Park City, a visit with colleagues at a law firm or other meetings. All of that was obliterated.

Here are a few photos from that time taken by myself, my staff, and my friends. This was not the Instagram world we have now and taking pictures wasn’t quite the obsession it is now, but you get the picture.

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 never forget;
  • You’ll never forget;
  • And I’ll never forget.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


September 4, 2020

U.S. Housing Has Been Making A Bad Situation Look Good

This is clearly a good example of making a bad situation look good.

Couldn't be smoother

But I digress…

The Manhattan to Suburban Migration Might Be Peaking

Douglas Elliman Real Estate published our research on new signed contracts and new listings in four U.S. regional reports. They are a new part of our growing Elliman Report Series that I began writing 25 years ago.

These monthly reports break out each market’s performance by eight price tranches on a year over year basis and are a supplement to our quarterly report series.


Elliman Report: New York August 2020 New Signed Contracts Report

Manhattan
The number of new signed contracts by property type continued to trail year-ago levels but are also continuing to rise from April lows.

Brooklyn
New signed contract activity continued to rise sharply from April lows and remained above the same period last year. New listings across all property types remained above year-ago levels.

Long Island (excluding Hamptons/North Fork)
New signed contract activity for single family and condos remained higher than year-ago levels but showed signs of peaking. The larger annual gains in single family new signed contract levels were seen above the $400,000 threshold.

Hamptons
Single family new signed contract totals continued their torrid upward pace, more than twice year-ago levels. Condo new signed contracts also saw a significant increase. New listings across all property types have been rising sharply in response to high demand.

North Fork
Single family new signed contract rose sharply to nearly double the total seen last year. New single family listings increased annually but did not keep up with demand.

Westchester County
New signed contract activity for single family and condos were substantially higher than year-ago levels but showed signs of peaking. Single family new signed contract activity saw greater gains in higher price tranches.

Fairfield County, CT
New signed contract activity for single family and condos were substantially higher than year-ago levels but showed signs of peaking. Single family new signed contract activity saw greater gains in higher price tranches.

Greenwich, CT
Single family new signed contract totals continued their robust upward pace, nearly triple year-ago levels. Condo new signed contracts also saw a significant increase. New listings across all property types have been rising sharply in response to high demand.


Elliman Report: Florida August 2020 New Signed Contracts Report

The Florida report includes the counties of Miami-Dade, Broward, Palm Beach, Pinellas, and Hillsborough.

Palm Beach County
New signed contract activity for single family and condos remained significantly above year-ago levels. All single family new signed contract price tranches showed year over year gains.

Broward County
New signed contract activity was more than double year-ago levels across property types. All single family and condo new signed contract price tranches showed significant year over year gains.

Miami-Dade County
New signed contract activity for single families remained higher than year-ago levels but showed signs of peaking. Much of the annual gains in single family new signed contract levels were seen above the $400,000 threshold.

Pinellas County and Hillsborough
New signed contract activity for single family and condos remained higher than year-ago levels but showed signs of peaking. In general, there were larger year over year increases in new signed contracts in higher price tranches.


Elliman Report: Colorado August 2020 New Signed Contracts Report

The Colorado report contains Aspen and Snowmass Village.

Aspen
Overall new signed contracts and new listings essentially doubled over the past year. While month over month activity eased, levels remain unusually elevated.

Snowmass Village
Overall new signed contracts rose more than four-fold from the prior year. While month over month activity eased slightly for condos, single family activity continued to climb.


Elliman Report: Colorado August 2020 New Signed Contracts Report

The California report contains the counties of Los Angeles, Orange and San Diego.

Los Angeles County
New signed contract activity for single family and condos remained higher than year-ago levels but showed signs of peaking. Much of the gains in single family new signed contract levels were seen above the $600,000 threshold.

Orange County
New signed contract activity for single family and condos remained higher than year-ago levels but showed signs of peaking. Much of the gains in single family new signed contract levels were seen above the $800,000 threshold.

San Diego County
New signed contract activity for single family and condos remained higher than year-ago levels but showed signs of peaking. Much of the gains in single family new signed contract levels were seen above the $500,000 threshold.

CNBC TV: Executive Chairman of Douglas Elliman gives an overview of contract activity

Howard Lorber, Executive Chairman of Douglas Elliman, talks to CNBC about the results of our four August 2020 Elliman New Signed Contract Reports. Most importantly, he gives me a shoutout!


Manhattan apartment deals fall 31% while sales boom in the suburbs [CNBC]

New York Homebuyers Are Searching Everywhere But Manhattan [Bloomberg]

CNBC TV: Florida pending home sales jump as housing market heats up

Diana Olick talks about the results of our August 2020 Elliman New Signed Contract Report for Florida. Most importantly, gives me a shoutout. 😉

Florida Attracts More Northerners [NY Times]

Forget Miami? Another South Florida community sees home sales double [Miami Herald]

A Bloomberg Opinion Piece That Mirrors My Take On The ‘Exodus’

A decade or so ago I interviewed Justin Fox on my old podcast The Housing Helix that I keep threatening to restart. Justin now writes for Bloomberg Opinion and I appreciate his “fuzzy logic” writing style when there are a lot of holes in the available data.

His op-ed piece The Big-City Exodus Isn’t Very Big (Yet) mirrors the way I think about the ‘urban to suburban’ outbound migration in NYC metro. I actually see it as ‘Manhattan to suburban’ migration because markets like Brooklyn are booming.

The key point of the article is that it only takes a small outflow from the city to cause havoc in the suburban markets that surround the city. Many read a headline that says something like sales in the suburbs are up 100% and think that must mean that sales in the city fell by 100% to zero and by October there will be 5 people left.

Please check it out for a dose of sanity.

In The Neverending Pursuit of Shallowness, I Got My 16th Mention On The Front Page of the New York Times

In the frenzy of news coverage of the COVID-19 impact on the New York City housing market that has dominated my professional life since mid-March, it felt good to stop and feel satisfied when something special happened. Special to me only. Something that makes that moment stand out in the daily ritual of an endless groundhog day.

When I was contacted for a recent housing market story by the NYT, I had no idea it would end up on the front page (A1) of the Gray Lady. I later saw the story online and thought nothing further of it. A few days later I was reading the print version and happened to notice the same article was sitting on the bottom left corner of A1 and my company’s name was right there in front of me. Boom. 16th.

Ok, now that’s the past. It was fun while it lasted. Now back to work.

A Rent vs Buy Index That Beats The Big Mac Index

While I’ve always “enjoyed” Big Macs and following the Big Mac Index created by The Economist Magazine back in 1986. It is even more interesting (but not technically “fulfilling” to run into a housing index I wasn’t familiar with.

I was reading an article in Bankrate: This index shows where you should buy a home, and where you’re better off renting (admittedly the stock photo of the West Village of Manhattan at the top caught my attention too).

The College of Business at Florida Atlantic University developed a rent versus buy index with an easy to remember name: “Beracha, Hardin & Johnson Buy vs. Rent Index” or “BH&J” for short. It looks well researched and transparent, with a methodology and the raw data to download. The series goes back to 1982 which is quite unusual since it is rare to see a housing index that precedes 2000, or even 1990.

Despite the surge in home prices, the U.S. index has remained at about the same threshold for the past three years. The NYC index (5 boroughs) hasn’t entered the rental threshold since the financial crisis.


Getting Graphic


Len Kiefer‘s Chart Handiwork

Shark attack!


Upcoming Speaking Event

What’s In Store For New York City Real Estate in 2020 and Beyond!

I’m joining my friend and co-data nerd Noah Rosenblatt of Urban Digs for a live 1 on 1 discussion moderated by John Walkup, also of Urban Digs.

Urbandigs is a great resource and I love to connect with these guys. Register and mark your calendar for September 17th at 11 am!

[click on image to register]

The Counselors of Real Estate® Presents: What’s Next for Real Estate and the Life Experience

Here’s an interesting free and open to all webinar I highly recommend:


[click on image to register]

Appraiserville

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

Petition Clears First Hurdle to Put USPAP through California Rulemaking

From the Cosmic Cobra appraiser guy newsletter:

Big news. The California Office of Administrative Law has accepted my petition to compel a required rulemaking for the 2020-2021 Uniform Standards of Professional Appraisal Practice. Without a rulemaking, USPAP is a so-called “underground regulation” in the State of California. The petition was accepted on September 1, 2020, and is now under review. You can find the case here. I now need your help.

Jeremy Bagott, MAI, AI-GRS
jbagott@gmail.com

P.S. If you’re interested, email me and I’ll send you a copy of the petition.

Here’s the press release:

*** FOR IMMEDIATE RELEASE ***

PETITION CLEARS FIRST HURDLE TO PUT USPAP THROUGH CALIFORNIA RULEMAKING

(LOS ANGELES, September 1, 2020) – A petition to the State of California to submit the 2020-2021 version of the Uniform Standards of Professional Appraisal Practice to a required notice-and-comment rulemaking cleared its first hurdle today. The matter is now under review by the California Office of Administrative Law. You can locate the case here under OAL File Number: CTU2020-0817-01.

The petition calls for a rulemaking, which includes a state-mandated promulgation in the California Regulatory Notice Register, a cost-benefit analysis and compulsory sign-offs by the Department of Finance and filings with the Secretary of State’s Office. In short, it requires a state agency, the Bureau of Real Estate Appraisers, to comply with California law. The Uniform Standards of Professional Appraisal Practice is what the California Office of Administrative Law calls an “underground regulation,” due to deficient rulemaking.

A side benefit: A rulemaking will give a voice to the mortgagors, employees, depositors and investors in the 200 banks doing business in the state; members and employees of the 300 credit unions headquartered here; the state’s 10,000 licensed real estate appraisers who must contend with continual regulatory changes; state and local agencies that rely on eminent domain; property owners who have been (or will be) subject to eminent domain; and personnel in the offices of the state’s 58 county assessors. Also given a voice will be the investors in so-called community facilities district bonds. USPAP appraisals are often the centerpiece of the bonds’ official statements.

Moreover, it is an opportunity for appraisers to go on record about definitions in the new version of the standards. One new definition has rankled many.

The paid panelists of the nonprofit Washington, D.C.-based Appraisal Foundation do yeoman’s work but the California Administrative Procedure Act and the California Code of Regulations, Title 1, § 20, “Incorporation by Reference,” do not allow an open-ended delegation of the people’s business of California to private persons. A state rulemaking is required for each revision of any outside standard incorporated into a state regulation. This is a key safeguard for this very reason.

If you’d like to help, here’s something you can do:

Please email the California Office of Administrative Law at staff@oal.ca.gov and express your interest in seeing a notice-and-comment rulemaking pursuant to the California Administrative Procedure Act and the California Code of Regulations, Title 1, § 20, “Incorporation by Reference.” Please refer to “underground regulation” OAL File Number: CTU2020-0817-01. By doing this, you are not necessarily rejecting the current version of USPAP. You are simply insisting California follow its own administrative laws. You are also supporting Californians in exercising their rights, guaranteed by state law, to go on record in the state register about the 2020-2021 version of the copyrighted standards and each future version of them. Californians deserve state agencies that adhere to state law.


The culmination of two years of research, a new book, Dispatches from the Cosmic Cobra Breeding Farm by Jeremy Bagott illuminates over-the-top spending and questionable dealings at the Appraisal Foundation. Published just before the pandemic, it chronicles international jet-setting by officers and trustees, conflicts of interest, lobbyist tie-ins, outsized cash reserves and swollen pay at the tiny nonprofit. The book is available at Amazon in paperback and Kindle versions.


TAF Newsletter: Still Saying They Were Justified Applying For PPP

From Monday’s Appraisal Foundation Newsletter – a letter from president Dave Bunton who can’t stop talking about returning PPP after it came to light.

Like all organizations across the United States, the early months of the pandemic were full of economic uncertainty. Out of an abundance of caution, The Appraisal Foundation applied for and received a Paycheck Protection Program (PPP) loan. As the economy stabilized, it became clear that we would not need the PPP funds, so we have paid off the money we received.

It’s not transparency when someone has to keep justifying their actions.

TAF Newsletter: Created a Diversity and Inclusion Subcommittee

TAF president Dave Bunton has made it a point in the last two monthly newsletters to mention TAF created a “Diversity and Inclusion Subcommittee” which is great if it actually accomplishes something.

The Appraisal Foundation Board of Trustees added a Diversity and Inclusion Subcommittee in April of this year, one month before the death of George Floyd, which highlighted some of the inequities experienced by Black Americans.

The thing is, the Appraiser Qualifications Board (AQB) hasn’t had a minority member and only 3 women in decades of existence.

I really hope that this subcommittee is more than just window-dressing. Adding diversity to the AQB that is short 2 members, could be accomplished in weeks, not annual board cycles.

Abraham Lincoln was the first to say “actions speak louder than words.”

Fannie Mae Updates Their Policy on Accessory Dwelling Unit

Because Dave Towne is always looking out for appraisers’ best interests faster than anyone around, he sent this before I actually got my email notice from Fannie Mae.

From Dave:

On Wed, 9/2/2020, FNMA has updated their policy allowing for ADU’s on SFR properties to be a Manufactured Home.

This is in their Selling Guide Announcement SEL-2020-05, linked below.

Key points:

An accessory dwelling unit (ADU) is an additional living area that is independent of the primary property and has basic bathroom, cooking, and sleeping facilities. With this update, we clarified ADU property eligibility and comparable sales requirements in the appraisal as follows:
▪ expanded the current definition of an ADU to improve proper classification of ADUs;
▪ expanded property eligibility by allowing multi-width manufactured homes titled as real property to be eligible as an ADU; and
▪ allow appraisal flexibilities that now include the use of
• an aged settled sale to demonstrate market acceptability, and
• an active listing, or a pending sale as a supplemental exhibit to show marketability.

Effective: Lenders may take advantage of these updates immediately.

Here’s the Fannie Mae link.

OFT (One Final Thought)

10…years…old


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 look good;
  • You’ll look good;
  • And I’ll fall on my face.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


August 21, 2020

Sitting In The Housing Waiting Room

Right now we are all sitting in a waiting room, patiently hoping the COVID crisis will somehow be resolved in the not too distant future. So there’s this.

The fact that today’s Gen Z know Fugazi’s ‘Waiting Room’ is mindblowing to me. Of course, Cleveland.


It compares well with the original by Fugazi:


But I digress…

ABC World News Tonight Segment On Looming Mortgage Defaults And Evictions

I was interviewed for Deirdre Bolton’s national ABC piece with a conservative pink plaid shirt and hopefully some helpful insights.


And ended up with a 7/10 score on @roomrater. I’ll take it.


Portland Keeps It Weird With Low-Density Zoning Reform

We saw this first in Minneapolis with a ban on single-family housing in their urban core. Now Portland – they do something very creative with zoning. h/t @ritholtz

The reform sets a new standard: up to four homes on almost any lot, or up to six homes for price-regulated projects.


Comparing Closed Sales Trends After A Catastrophe

The Wall Street Journal’s Covid-19 Pounds New York Real Estate Worse Than 9/11, Financial Crash does a big story on the state of the high-end real estate market and its not pretty but my charts are:


[WSJ]

New Ways To Look At Market Conditions: Deals In Progress

Chaves Perlowitz Luftig LLP came up with a creative way to share market performance during the COVID lockdown. This law firm is one of the more social media savvy firms I’ve come across. Their residential reports are a cross between data and anecdotal and useful in a world devoid of data right after lockdown.

Scrolling through their deals, you can see anonymized transactions and whether they had contingencies (most do) and what the discounts are like (not that much).


[click to see report gallery]

Housing Starts Show Recovery, Also Shows Release of Pent-up Demand

Infographic: Housing Construction Begins to Recover | Statista You will find more infographics at Statista

Appraiserville

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

ASC Is Not Invited To SRAG By TAF

Let me jump out of the DC acronym hellscape for a minute. The following tweet describes the State Regulatory Advisory Group (SRAG) that has been revived by The Appraisal Foundation (TAF) that includes representatives of the Appraiser Qualifications Board (AQB), the Appraisal Standards Board (ASB) and the Association of Appraiser Regulatory Officials (AARO). SRAG was originally created so that representatives could have informal discussions on matters of the day. Later on, when AARO changed its periodic Saturday meetings to Fridays to coincide with TAF board meetings, SRAG was seen as duplicative and disbanded. In the original incarnation of SRAG, The Appraisal Subcommittee (ASC) was a part of this informal discussion process. Yet, in today’s resurrected version of SRAG, they are not part of it.


The restriction of SRAG is actually a good thing because the experience level at TAF has been hurt by the large staff turnover in recent years, especially with the exit of a long time stalwart of all things USPAP, John Brenan. So getting TAF together with regulators is good. The omission of ASC from SRAG when they were part of the original version is bad but consistent with TAF actions against ASC over the past few months.

The exclusion of ASC appears intentional due to the feud that boiled up in recent months culminating with that bat-shit crazy letter (sorry) to the ASC board.

Here’s why. The ASC enforces compliance with USPAP by the states. They are not in the room with these informal discussions so the states are going to take TAF’s views as the default, yet they are not getting any input from the entity that enforces them.

The long time relationship between TAF and ASC has been participatory and now, in recent years, that has clearly changed. Why?

When A TAF Board Member Has A Conflict, That Doesn’t Mean A Recusal In Attendance

Back when Practical Applications of Real Estate Appraisal (PAREA) was being planned and discussed, a board member representing a national company (one seen by most of my appraiser peers as a data monopoly), recused themselves from voting on the board in that matter due to conflict, but sat in and actively participated in the development discussion.

This tells me that there is not a full awareness in leadership that TAF’s reason for being is to ensure the public trust. You can’t do that when large companies have the potential for “inside baseball” early knowledge of new programs or have the ability to shape the outcome to their company’s advantage.

We Already Know Who Will Be The Next President of TAF

One of the worst kept secrets in Washington is who will be Dave Bunton’s replacement. Dave has two more years to go on his contract before retirement. He has been the only president that TAF has ever had. To give him his due, he has done a lot of good during his tenure and I have found him to be a very nice person. But a replacement for his position is too important to the appraisal industry to be hidden from view. His replacement is critical to the future of the appraisal industry. There are many changes on the horizon and TAF needs someone that works well with other agencies and is able to keep talented staff in place. The replacement should be obtained through a national and fully transparent search process and compensation should be analyzed to be at the market rate.

That is something we did not see over at the Appraisal Institute in the search for the replacement for the former CEO that left essentially in the middle of the night. It was a predetermined pick with a decorative executive search.

I hope for the industry’s sake, the executive search for TAF’s next president is completed with full transparency.

OFT (One Final Thought)

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 be more patient in the waiting room;
  • You’ll read more magazines in the waiting room;
  • And I’ll not avoid my next visit to the waiting room.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


July 31, 2020

Tennis Love And Housing

Sometimes, we all need a break…set…match…and love.


This is going to be an appraisal-heavy issue of Housing Notes today…

But I digress…

THE CON Documentary Goes Live On August 5th at 8PM EDT

This 5-part series tells the full story of the housing crash and the appraisal industry gets to tell their side for the first time. Here’s the trailer for THE CON. Please mark your calendars!

True or False: the homelessness problem in California is only because of Big Tech and a surge in drug use?  False! Massive foreclosure and evictions following 2008 are one of the biggest contributors. Join the Aug. 5 global live premiere + Q&A: thecon.tv/event @theconseries

NPR: Housing Numbers Show Strength But The Economy Is Struggling

From one of my favorite regular podcasts: The Indicator: The Coronavirus Housing Boom


Pushing ‘Coprimary Homes’ Into The Housing Lexicon

My friend Mike Simonsen, founder of Altos Research, continues to try to get me into the Urban Dictionary with my phrase “Co-Primary.” Click on the following tweet for the thread and a lot of other suggestions for the phrase.


Mike’s Altos Research metrics seem to confirm that it is a pattern we are seeing now in the housing market.


Appraiserville

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

Please Donate to the Ryan Lundquist Go Fund Me Effort If You Can


Appraisal Institute Is Opening Their Sham Election Process For Us To See The 2 VP Candidates Present

The following note was sent out yesterday by the Appraisal Institute. Their new effort seems to be an attempt to misdirect that AI National overruled the publicly announced candidate Craig Steinley (vetted by the National Nominating Committee (NNC)) in a sham petition process. Michael Tankersley was not the nominating committee choice but now, somehow, he is on equal footing with Craig Steinley despite the NNC not thinking so. Shouldn’t Tankersley be ashamed of himself? This sham self-dealing election to keep Jim Amorin in power is unethical and morally wrong. This now officially broken organization thinks that its membership will assume that operational executives are being transparent by sharing this event with the public. The decision has already been made and this is just theatre, as I have chronicled in prior posts. You can catch up on all of it here. I hope the Board of Directors does the right thing and votes for the NNC choice and not become responsible for AI National’s further demise.


The Appraisal Institute Board of Directors will hold an election for the 2021 vice president during the morning session of its third quarter meeting Aug. 6 and host a general open session in the afternoon. Registration is open for both meetings.

The meeting will begin at 9 a.m. CDT, and the vice president nominees will make their presentations to the Board at the start. Once the presentations have concluded, the Board will go into Executive Session. AI professionals who have registered to attend this meeting will be able to rejoin it at approximately noon CDT for the election of the vice president.

AI professionals must register for all meetings they wish to attend. If you wish to attend the vice president presentations and election beginning at 9 a.m. CDT and the general open session beginning at approximately 1 p.m. CDT, you will need to register for both. Please note that space is limited.

Register to attend the vice president presentations and election.

Register to attend the afternoon general session.

You will receive a confirmation email with your own unique link to join a session once you have registered.


AI Professionals with Past Service as Directors of the Appraisal Institute Show Support For Craig Steinley

This July 29, 2020 letter was written from AI Professionals with Past Service as Directors of the Appraisal Institute to express their support for Craig Steinley, the only vetted and selected candidate by the nominating committee. They give many reasons for their support of Craig, but this one stood out to me:

The current petition is even more damaging and detrimental to the nominee and the organization because, for the first-time ever, it is cloaked in anonymity and secrecy. And, it is diminishing, rather than enhancing, our external image and influence at a time when other far-reaching issues demand the Board’s attention and action.

Here is the letter [PDF].

ASC Extends the North Dakota Waiver for Another Year

This week the Appraisal Subcommittee voted to extend the North Dakota waiver for another year with a 6 to 1 vote. The overarching reason to extend was because of the COVID outbreak prevented them from meeting in person this year. HUD was the only agency to take issue with this and I have to say I agree with their reasoning. North Dakota had 7 months to come up with a solution before COVID hit. I’m not taking ASC to task on this though because there is some validity to the COVID excuse.

My assumption is that there is no solution beyond simple economics. North Dakota is largely a rural state and the economics of inadequate fees make it very difficult to have timely coverage. This is a challenge across all rural markets yet North Dakota claims they are different and were unable to come up with why and how to solve it over seven months. And that’s because this is purely a political ploy for the ND banking lobby who got the governor to opt-in because the banks don’t want to pay market rates for appraisals. Well, that’s not how the economy works. Prediction: 1 year from now North Dakota still won’t have a solution and they won’t get an extension.


The Appraisal Foundation Seems To Be Claiming They Don’t Need Oversight?

There was an email passed around by Jeremy Bagott recently about the TAF’s collection of PPP funds that caught my attention. Bagott, the author of “Dispatches from the Cosmic Cobra Breeding Farm” that came out earlier this year was essentially a takedown of the Appraisal Foundation (TAF) via “incorporation by reference.” Initially, I was intrigued when the book came out but the author came across too strong on Dave Bunton’s compensation to which TAF responded and it took a lot of the wind out of the sails of the book marketing process.

The author sent the following email about the TAF acceptance of PPP money which seemed problematic to me, especially since all the meeting travel is not occurring right now because of the pandemic.


Bagott’s recent email made me concerned so I opted to surf the ASC web site (hey, I also watch C-SPAN in my free time) and I stumbled across two documents posted in July:

2020.07.01 – EML and attachments from J. Park to TAF – ASC Monitor and Review of TAF Guide and Policy

2020.07.16 – TAF Response to ASC Monitoring and Review Policy Guide_Redacted

The first was an email from ASC Executive Director Jim Park, providing a practical guide to TAF on what they will be looking for. After all the ASC is the link between Congress and TAF and ASC is responsible for TAF’s oversight. This is clearly and succinctly outlined in Title XI.

Here’s the summary page of Title XI on the ASC web site as it relates to the relationship between ASC and TAF.

(b) Monitoring and reviewing Foundation. The Appraisal Subcommittee shall monitor and review the practices, procedures, activities, and organizational structure of the Appraisal Foundation.

Here’s Jim Park’s July 1st email.


I bring all this up because of what I read after the Jim Park email.

TAF is strongly pushing back with the argument that “monitor and review” do not equal “oversight.” In other words, they are saying that Congress created TAF to be on its own and not be accountable for its actions to the public/taxpayer/consumer yet they set the standards for valuation across the U.S.

Here’s the TAF letter:


This rationale really alarmed me.

The TAF opines against having oversight…

While putting safeguards in place, Congress refrained from being too intrusive into the operations of the private, non-profit organization by limiting the federal government’s role to a level of “monitoring and review” instead of giving it expanded “oversight.”

Even more distressing is that TAF gets very personal against Jim Park and his team – the reading of this following section was an out of body experience. I’ve met and spoken with Jim Park and his staff at many meetings and find everyone very professional. I’d like to see these TAF claims made under oath.

[The following in Bold, my emphasis]

Here’s an excerpt.

Over the past year, the Foundation has witnessed an increasingly heavy handed and authoritarian approach from ASC staff while performing monitoring activities. The policy and guide purport to ratify that approach and codify it for the future. Their unprofessional behavior has become commonplace including:
Giving unsolicited opinions during private work sessions about decisions the ASC staff would like the Board to take.
• Disrupting private work sessions with ongoing chatter inappropriately laced with expletives.
• Confronting board members at breaks during in-person meetings with veiled threats emphasized by finger wagging.
• Making calls to Foundation board members and support staff prying into issues unrelated to Title XI and circumventing Foundation leadership.
Making false statements in an attempt to strong-arm Foundation decisions to conform to staff wishes.

And look at who TAF cc’d in the letter? My goodness.

Now absorb this lecture on ASC expected conduct at the end of the letter:

When attending Foundation private meetings, sessions, or briefings,
o ASC staff shall refrain from speaking unless specifically requested to do so by the Chair or President.
o ASC staff shall not state or imply directives.
o ASC staff shall not attempt to exert undue influence on the issues discussed.

The tone of this letter is completely unprofessional and frankly, bizarre, yet was signed by the Board of Trustees, Leila Dunbar and TAF, David Bunton. I don’t know Leila but this letter’s tone doesn’t sound like David to me.

TAF is an organization that sets standards for appraisers nationwide and to behave this way is unacceptable. I’ll be interested to see how they navigate going forward. I think TAF’s world just got a lot more difficult.

OFT (One Final Thought)


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 be more in love;
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  • And I’ll be knee-deep in appraisal politics bogging our industry down .

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

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Extra Curricular Reads


July 10, 2020

Housing Walks The Walk With Or Without The Bubble Talk

This is the only bubble talk I want to address today. Whoever said you can’t see a bubble when you are in the middle of one was wrong (and probably needed a bath when they said it). Moms clearly don’t understand what Dads are all about.


But I digress…

The New York City Rental Market Is Showing The Damage Toll Before Opening

Real estate firm Douglas Elliman published our rental market research this week and the numbers were quite weak. This report is part of a growing Elliman Report series I’ve been the author of for 25 years. These report release generated a lot of good writing about the historic situation.

CNN focused on our report results to illustrate the move to the suburbs during the pandemic as well as how it was limited to only those that could afford it. The New York Times focused on how thousands of renters had left the city due to the pandemic and that rents were finally coming down after a long run of gains.

CNBC focused on the record vacancy rate and large drop in new leases signed during the pandemic.

In fact, there were a lot of interesting takes using the same data set this week. For more, you can read here.

The Bloomberg story on the rental market was the number 2 most emailed by the 350K Bloomberg Terminal subscribers and stayed in the top five all day, keeping ahead of the Brooks Brothers bankruptcy.

And because I insist on being shallow, that Bloomberg rental piece was the 13th most read of the week.


And I give props to Bloomberg for three different color versions of the same chart:

Black & White

Blue & Black

Yellow & Black

______________________________________________________
MANHATTAN RENTAL MARKET HIGHLIGHTS

Elliman Report: June 2020 Manhattan, Brooklyn & Queens Rentals

“The state mandate to that prevented real estate brokers to physically show property was removed before the last week of the month, not enough time to have a material influence on market conditions for the month.”

  • The highest vacancy rate in nearly fourteen years of tracking
  • The lowest number of June new lease signings in a decade
  • The fall in median rent reversed all gains seen in 2019 and 2020
  • The market share of concessions in each price segment surged
  • New development median rent increased as existing median rent declined annually


______________________________________________________
BROOKLYN RENTAL MARKET HIGHLIGHTS

Elliman Report: June 2020 Manhattan, Brooklyn & Queens Rentals

“With the lifting of the lockdown that prevented real estate brokers from doing in-person showings in the last week of the month, there will be greater transparency in the market.”

  • Listing inventory surged as new leases continued to decline
  • New leases declined annually for the ninth straight month
  • Net effective median rent rose at the lowest rate in 18 months

______________________________________________________
QUEENS RENTAL MARKET HIGHLIGHTS

Elliman Report: June 2020 Manhattan, Brooklyn & Queens Rentals

[Northwest Region]
“While the decline in new leasing activity remained well below last year, the removal of ‘shelter-in-place.’ restrictions in the final week of June that prevented in-person showings, is expected to expand activity.”

  • New leases declined annually for the eleventh straight month
  • The market share of landlord concessions rose annually for the third straight month
  • Median rent declined year over year across all bedroom categories

Westchester On Lockdown: The Actual Meaning Of The Frenzy

Douglas Elliman published our research on Westchester County yesterday, the residential suburban community north of New York City. The public narrative has been people are flying out of the city and brokers are busier than they ever have.

Except that’s not quite what is happening. Yes, there is outbound migration and a lot of it, it seems. And yes, the market is in a frenzy, except those two factors are being a bit conflated to explain it. Here is why. Looking at county-wide new contract data by month showed us that activity bottomed in May. And what would you expect given the state-mandated shutdown that prevented in-house showings by brokers? The New York Times broke down the contract logic for you. As the re-opening enabled by phase 2 in early June occurred, the month of June enjoyed a 53% month over month surge and you get this general narrative:


That 53% feels like a frenzy or a boom to those that have been sitting under lockdown for over 100 days. But new signed contracts are down in June 2020 from the prior June by 13%. That 53% surge is being explained as coming from the outbound migration generated by the city. I have no doubt that this is part of it. There was no actual spring market during COVID in Westchester by state mandate. With the spring being moved on top of the summer season, it will feel like a housing boom. And comparisons against the previous summer will make this summer look like a boom, but this is really a comparison of Spring 2002 versus Summer 2019.

The real market will be presented when the pent-up demand and supply from the spring market gets fully satiated. That moment should be in early September. The federal election, a damaged economy, a possible second wave (although New Yorkers seem to have their sh*t together with mask-wearing and social distancing.)

The actual quarterly Westchester, Putnam, and Dutchess Elliman report that we released shows us what a housing market looks like that was closed under state mandate for three months.

______________________________________________________
WESTCHESTER SALES MARKET HIGHLIGHTS

Elliman Report: Westchester Sales Q2-2020

“State-mandated ‘shelter-in-place’ rules prevented in-person property showings for much of the quarter, distorting sales and inventory trends.”

  • County overall price trend indicators were skewed higher by the rise in single-family market share
  • Largest year over year decline in countywide sales in eleven years
  • Listing inventory declined by the largest amount in fourteen years
  • Sixth straight year over year rise in median sales price
  • Single-family sales fell by the largest percentage in more than eleven years
  • Condo listing inventory fell annually by the largest amount in a decade of tracking
  • Luxury listing inventory fell year over year at the second-largest rate in eight years

_____________________________________________________
PUTNAM SALES MARKET HIGHLIGHTS

Elliman Report: Putnam & Dutchess Sales Q2-2020

“Price trend indicators and sales slipped from year-ago levels. ‘Shelter-in-place rules were modified in early June to allow in-person showings by real estate brokers, but this transparency came too late to be reflected in the results.”

  • The number of sales declined annually for the second time in five quarters
  • Listing inventory fell sharply year over year and was the first decline in six months
  • All price trend indicators slid from year-ago levels

______________________________________________________
DUTCHESS SALES MARKET HIGHLIGHTS

Elliman Report: Putnam & Dutchess Sales Q2-2020

“The number of sales and listing inventory fell sharply. ‘Shelter-in-place rules were modified in early June to allow in-person showings by real estate brokers, but this transparency came too late to be reflected in the results.”

  • The number of sales declined year over year by the most significant amount in six years
  • Listing inventory fell sharply, the third straight annual decline
  • All price trend indicators pressed higher from the same period last year

I ran out of time to include Brooklyn, Queens and Riverdale reports released this week – they are on the web site though.

[Bloomberg TV] Bloomberg Markets 7-6-20: A Busy Housing Market This Summer

Had a wonderful, nearly 7.5-minute conversation with Vonnie Quinn on Bloomberg Television’s Markets this week discussing how the housing market will likely look over the summer. The interview touched on the analysis in the Douglas Elliman Report series I author.

Some ‘inside baseball’ fun. I was connected to Bloomberg via Zoom from my home for this. If you look closely at the 5:15 mark, you can see my garage door open as my wife drives in. My wife panicked when watching this clip, thinking she would be on TV as she walked out of the garage, but she randomly ended up using the other door.


[Spectrum TV/NY1] Stuy Town Vacancies Surge 7/6/20

Michael Herzenberg of NY1 did a great story on the exodus from Stuy Town after the landlord provided terms for people to break their leases. The story was inspired by a press release from CHIP (I haven’t seen) which talked about the pandemic exodus as the reason for the rising vacancies. I thought that was a bit of hyperbole since the other key factor has been the inability of the real estate brokerage industry to do in-house showings by state mandate until June 22nd. The lack of mobility has also been a key factor in driving vacancy higher.


Ivy Zelman On The State Of The U.S. Housing Market (It’s Pretty Strong)

My friend and Superstar housing analyst Ivy Zelman talks with TD Ameritrade. If you love numbers, you can go deep into the national story. Love the nuance here.

She also referenced the Pew study on why people moved because of Covid-19


Click on the image below to play the segment.


When The Alphabet No Longer Explains The Economy And Car Tumbling Does

I enjoyed this basic WSJ tutorial on Alphabet Economics. I’ve long used U, V, and W as labels for future periods. Now it’s about shapes.

…or something else. I think the following GIF best describes our economic cycle over the next 6 months.


Appraiserville

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

The Appraisal Institute Has Missed The Opportunity To Come Clean With Its Members

UPDATE JULY 13, 2020

The Appraisal Institute felt it was necessary to write a letter to respond to my original July 3rd post: The Appraisal Institute Ignores Its Membership For Third Time In Sham Election Maneuver. Their response letter was surprisingly amateur and showed how little they respect their membership. Read on.


UPDATE JULY 16, 2020

I have just been told that Michael Tankersley did NOT serve on this year’s Nominating Committee. He was a candidate for the Vice President position. The note below has been updated to reflect that.


Although Steinley was the – SOLE – duly vetted and selected candidate of the nominating committee, somehow the board had to go through a secret, 6-out-of-24 “process” to place Tankersley back onto the ballot after not being the selection of the nominating committee. Why?

The Appraisal Institute at a crossroads. To all those who have nothing to hide, hide nothing. The sham petition process was hidden from the Appraisal Institute’s membership. In response to my initial call out of this sham election process last week, the Appraisal Institute attempted slip this by membership using a highly disrespectful “fogging” letter from the current president. It insultingly omits all the critical issues that have roiled membership while rambling on and on about process and assuming the membership isn’t very smart. No matter how much they try, AI leadership behavior in this sham election process is unethical and does not serve the membership whatsoever.

Here’s a reminder to the Board of Directors: you serve the membership, no matter who you pledged your allegiance to when you signed up for this gig. Please honor your commitment to them and your commitment to honor and integrity as leaders of the industry. For at least the last decade, this once-proud organization is a shadow of its past because of self-dealing from the same people we are witnessing now. It is up to you to do the right thing and act like the leaders you can be.

______________________________________________________________

Original Post

Today, all (I assume) members of the Appraisal Insitute received a letter from current AI president Jeff Sherman, with whom I’ve met and spoken with on several occasions during his tenure and liked him and what he represented. MAI members from around the country have forwarded it to me and expressed their profound disappointment in this organization that they used to love.

Here is the consensus feedback by members who received this letter.

It just makes me sad that this is the way it is. I think many of us are a bit dumbstruck by this.

I found the letter mind-boggling and a simply attempt to fog the issue at hand. I have to assume that this was written by AI counsel because it reads like a lawyer’s writing with a little softening from other parties. I will also assume this response was directed by the current CEO in an attempt to stop the viral membership backlash of the sham election process that has rattled the organization so he can continue to control who future presidents are. So I am very confused as to why Jeff signed off on this letter since its contents contradict what I have been told by past presidents, past board members, and current members. It hurt to read it.

For now, I am going to chalk this up to “fogging” so that the actual logic gets buried in the debris. This is how lawyers do this. By the way, has anyone ever considering sending the details of this action and the past ten years of self-dealing to federal prosecutors in the Northern District of Illinois? If this is how their executives run the organization, and all the perks I keep hearing about, it makes me wonder about the state of their finances. The handling of the FMC debacle comes to mind.

But I digress.

Here is my running commentary on the letter that is presented below:

  • This sham election maneuver has not been in place since 1991 – Ask the former president who made this happen (I have the name) under oath to get Sellers on the ladder in the first place and ruin the career of a star female nominee.
  • An 11 member nominating committee gets to vet candidates recommended by the membership to review and they are charged with picking the best one and then announce it. They vetted 3 this year and picked one. It’s literally that simple.
  • The winning candidate’s name was announced by the nominating committee.

And then magically…

  • The sham maneuver was made to get the CEO’s pick inserted which should never happen.
  • Tell the membership right now why there is a second candidate.
  • I’ve been told repeatedly that a board member can vote for themselves in the petition process and as of today, some current board members are fighting like hell to keep any such votes hidden from membership, presumably so potential self-dealing will not be exposed.
  • To repeat, one person was selected by the nominating committee and two weren’t. There is no disagreement on this. Why does the CEO get to pick a candidate that was not selected to run against the person who was selected?

Why are there suddenly two nominees without any transparency? This letter does not address this point at all yet it is the entire point. The rest of the letter is faux transparency. Give the membership the actual reason there are suddenly two candidates, one picked by the nominating committee and one picked by the CEO (and that CEO-blessed candidate should be ashamed of themselves).

  • As many as 3,000 members will get to watch the 10-minute presentations of two candidates – one vetted by the nominating committee and one hand-picked by Jim Amorin. The act of showing this on video isn’t transparency at all. It’s a charade. The most deceitful part of the petition process has already occurred before the camera was turned on. There is no explanation of how the second candidate was selected.

The fogging part that is most distasteful in this letter is that it is laden with process gobblygook but contains zero transparency, something the membership is demanding right now.

Here is the closing paragraph of the letter.

I now offer to you, and to each Board member, this is not about style or personality; it must be about the best interests of the Appraisal Institute. I have supreme confidence that the trust you have placed in your elected representatives will be confirmed, regardless of the person chosen.

The problem with this closing statement is this sham election process is not being done in the best interests of the membership, but rather it is being done in the best interests of the operational executives running the show.

This is truly a sad day for the Appraisal Institute. If the board does not fight for the rights of the membership and respect the selection process, then the organization as we know it is just a monarchy, largely like when it began to be a decade ago with the same cast of characters.

Appraiser Talk Is Fascinating

Here’s a conversation I had with my good friend from Australia!

OFT (One Final Thought)

Although I argue that pie beats cake every time, this is madness.


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 be more outbound;
  • You’ll be in a frenzy;
  • And chronicle a sham election.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

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June 26, 2020

And Most Important Of All To The Current Housing Market…Oh, Never Mind

I plan on showing this commercial to my kids to prove how tough we had it with technology back in the day. Good grief what a primitive interface compared to today’s standards, plus I’m on an overdue Monty Python kick, now listening to the John Cleese audiobook “So, Anyway…” immediately after finishing Eric Idle’s delightful “Always Look on the Bright Side of Life: A Sortabiography” audiobook.

Wait for it…


But I digress…

The Jumbo Mortgage Market Might Be Starting To Open Up […a bit]

There was a terrific Wall Street Journal piece The Jumbo Market Shows Signs of Heating Up

Loan activity went into a deep freeze following the onset of the pandemic, but lenders seem to be loosening their purse strings again…a bit

The most important aspect of this article is the “…a bit” reference in the article subtitle above.

While it is too soon to call it a full-scale “reopening” of jumbo markets, there are some emerging signs of life. One measure is the gap between average conventional loan and jumbo rates: In April, conforming 30-year mortgage rates averaged 3.4%, while jumbos averaged 3.7%, according to data provided by mortgage technology company Optimal Blue. That gap narrowed in early June, to 3.3% for conforming loans and 3.5% for jumbos. Another measure is the return of jumbo loans for self-employed borrowers served by niche lenders.

Even with falling mortgage rates and an unemployment catastrophe that has skewed away from upper-end salaried employees, jumbo lending has be largely restrained due to the looming uncertainty about the economy over the next few years. Most of the jumbo lenders we interact with for our appraisal assignments seem to be focusing on existing client relations, especially with refinancing properties we’ve already appraised in the past.

Still, I suspect that part of this uptick now is the release of pent-up demand from a non-existent traditional spring market later in the calendar to overlap with the slower summer months.

My Forbes Column: Keeping Housing Market Results From The Public Is Never Justified: An Expansive View

Transparency is always the right strategy

When the Covid-19 crisis began halfway through March, the Manhattan housing market was placed on “pause,” as were many housing markets around the country. New York State “Shelter in Place” rules prevented the in-person showing of a property by a real estate broker. That was the beginning of the problem this crisis posed for the industry that lives and dies on sales and rental transactions. Then a startup agent trade group (NYRAC), made up of some of the most productive agents in the market and includes many of my long-time industry friends, pushed to hide the days on market metric from the public for what turned out to be a self-serving reason. I love what they stand for, but this was a strategic error that I could not support.

While I have been a real estate appraiser and market analyst for 35 years, I dipped my toe into real estate as a sales agent in Chicagoland for six months in the mid-1980s.

Lesson learned

From my experience there it was clear to me that the accuracy of the information our office possessed was critical to all parties for the market to function. I still have my old monthly MLS books and remember logging on to the MLS from one ancient (even then) terminal in the office – talk about delayed market information!

Days on market during Covid-19

The days on market (DOM) metric is significant to sellers because they don’t want their home to be perceived as overpriced if it sits unsold too long. DOM can be measured in several ways, but the one I see used the most is the average number of days between the last price change, if any, and the contract date (or today’s date if it has not sold.) When a potential home buyer looks at a listing on a public-facing web site, they look at DOM as one way to determine whether the listing price is reasonable. The longer a listing sits on the market as compared to other listings, the more likely it is over-priced. Sellers look at DOM too and become concerned when their listing sits too long relative to the competition, typically blaming the agent for not marketing the property enough. However, the asking price is usually set by the seller who is slow to recalibrate their asking price if the market is weakening. I’ve found it takes one to two years for a typical seller to capitulate on price in a downturn and not feel like they left money on the table.

Hiding DOM as a marketing strategy

When the government ordered lockdown hit New York City, and real estate agents were not allowed to provide in-person showings, market activity immediately stalled. NYRAC pressured various platforms to hide DOM information from listings. They still wanted users to be able to drill down and uncover the details, but at first glance, the DOM information was to be hidden.

Streeteasy (owned by Zillow), the de-facto Manhattan multiple listing system in the eyes of the consumer, and the Real Estate Board of New York (REBNY), the leading real estate trade group with their own platform known as RLS, initially balked at the manipulation but eventually caved to NYRAC pressure. NYRAC made a strategic error that further damaged the long-term credibility of the real estate brokerage industry with the consumer. Not all brokers agreed with this strategy either, but this group placed enough pressure on these platforms to make the change happen.

Only sellers matter?

The incentive to “partially” hide DOM comes down to this:

1) Give the sellers a “break” after two years of softening price trends.

2) Address the sellers’ concerns about extended marketing times during the pandemic.

3) But the primary reason is that real estate brokers didn’t want to lose their listings if the sellers removed them from the market and returned to the market later with a new agent.

Why this effort was wrong

NYRAC and several real estate agents said to the effect, “the buyer or seller can still look at the listing history to know how long a listing has been on the market. That data was never removed.”

I always respond with “Then why hide it in the first place?” To brokers in favor of this temporary rule who wonder why I appear to be obsessing about a nuance I say, it is never appropriate to manipulate data, made even worse by the primary motivation behind this action.

Ignoring the buyers

This “solution” ignores the buyer’s position in a sales transaction and yet last time I checked, buyers are on the other side of every sale. Any effort to partially or fully hide DOM results or any other market metric conveys the wrong message and smacks of the old “information gatekeeper” mentality, no matter the state of the market.

Recently, the official word came down that all days between the shutdown and the reopening will count as “one day” for the DOM calculation presented to the public.

Going forward I have the following questions:

  • Are we to anticipate a suspension of DOM anytime there is an unexpected external event that impacts the housing market (9/11, The Lehman Brothers bankruptcy, Super Storm Sandy)?

  • Who makes the call to do this? A trade group, a regulatory body, a for-profit platform?

-Do we think that buyers and sellers of real estate are unaware of the 90+ day COVID-19 market shut down? Will a new listing added today as the market opens with 1 DOM will sell differently than an identical property with a 91 DOM listing that sat through the 90+ day COVID-19 lockdown?

The market doesn’t care what the brokerage community thinks (or what I think). The act of intentionally hiding or partially hiding data from the consumer is never justified in any scenario.

Bloomberg Podcast: Two Homes Are Better Than One, for Some

More on my “Co-Primary” housing market theory:


Cheddar TV: Setting Expectations On The Market After Many Residents Left Manhattan

How many will come back?

Douglas Elliman President Scott has his “Big Cheese” moment on Cheddar (sorry), discussing the New York new signed contracts report we had just released. The June report comes out next week.


CNBC TV: Exploring The Covid-19 Discount

It seems that most buyers want to know what “the Covid-19 discount” will be. People were telling CNBC that for NYC it would be around ten percent. While it seems reasonable to assume that the pricing would softer post COVID with an 80% YOY drop in newly signed contracts now, THERE IS NO DATA YET. We have plenty of anecdotal that indicates there is a discount and we have plenty of anecdotal there is not a discount. I have plenty of real estate brokers and closing attorneys telling me both, so which is it?

The market opened back up four days ago (Monday, 6/22) and we will see the return of transparency in market data with brokers able to do in-person showings. I expect it will become much more evident within the next month as transactions ramp up. Until then, chill.

If you look close enough, you can see a shoutout to my firm as a data source in the CNBC segment. Yay! Click on the image to play the clip or down below.


CNBC Video: Big Jump In Homes Not Even Started

New home sales were pressed higher from urban to suburban but largely because of the lack of supply of existing homes. This is May data and it is important to recognize that sales surging has more to do with a release of pent-up demand from “shelter in place” limitations than some sort of new housing boom.


A Conversation About Opening Of The Market: ‘Connecticut Rising’

In an event sponsored by Connecticut Cottages & Gardens with Douglas Elliman, I was brought in as stated in my intro, to provide a reality check. It was a fun conversation, with some candid conversations about the urban to suburban narrative. It began with single-family rentals and morphed into home purchases.

Click on the image for the video. If prompted for a password, it is 4n.&@Qmk


[click on image, password is 4n.&@Qmk ]

Getting Graphic


Our favorite chart of the week of our own making

This is a Hamptons market excerpt from the new Douglas Elliman New Signed Contracts Report for the New York region:

Len Kiefer‘s Chart Handiwork

Appraiserville

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

A Growing Kerfuffle At The Appraisal Institute: News At 11 (soon)

And it’s an election year…

My 34-Year Record of Not Driving A Car To An Appraisal Is Officially Over

As promised, this week I drove from my home in CT to do an appraisal inspection in Manhattan. This was the first interior appraisal inspection since the COVID-19 lockdown began in March. Since then its all been desktops and drivebys. Since I am under an NDA for this assignment I can’t disclose my location despite the request to memorialize the special moment by Ryan Lundquist. For the uninitiated, this was the first time in my 34 year career, I drove to a property inspection. I should also note that my 37-mile drive to get there was my longest drive since early March. Surprisingly, I don’t feel bad about my streak being broken but I was incredibly encouraged to see about 99% of all people walking around were wearing masks. Smart people.

This is yet another reason why I love NYC.

This is my official appraisal inspection vehicle.


OFT (One Final Thought)

Areas of the country that initially saw very public pushback from using masks and practicing social-distancing are now experiencing a significant rise in the infection rate. The idea that this pandemic was ever a “density” issue as many people once viewed the infection rate in NYC, has been proven unequivocally false. Critical thinking is needed to defeat this pandemic and this second wave calls into question whether we see much of an economic rebound over the next year.

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 wear masks;
  • You’ll sign a contract;
  • And I’ll get a new watch.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


June 12, 2020

We’re Not Even Thinking About Thinking About Higher Rates As We Race Downhill To The Other Side Of This Crisis

The following video is an excellent analogy for the current state of housing and the economy – the title of this week’s Housing Notes is a take off on the Fed chair’s comments shared this week in a video further down. The uncertainty illustrated here is quite stressful.

But I digress…

Manhattan, Brooklyn & Queens Rentals Continue To See A Plunge In New Leasing Activity As Brokers Are Still Not Allowed To Physically Show Property

I’ve been the 25-year author of an expanding series of market reports for Douglas Elliman Real Estate, now covering more than 35 U.S. Housing Markets. This monthly rental report series covers three of the five boroughs of New York City: Manhattan, Brooklyn, and Queens.

Since the COVID-19 lockdown in NYC, real estate agents/brokers have not been allowed to physically show properties and as a result, new leasing activity has plummeted and most of the price action has occurred on the renewal side of the market which is estimated to be about 2/3 of all transactions and is not shared with the public.

Elliman Report: May 2020 Manhattan, Brooklyn & Queens Rentals

______________________________________________________
MANHATTAN RENTAL MARKET HIGHLIGHTS

“With the inability of real estate agents to physically show property per state’ shelter in place’ rules, there has been a sharp drop in new lease signings and limited price discovery during the Coronavirus crisis.”

  • The lowest total of new leases recorded for the month of May in a decade
  • The second-largest year over year decline in new leases in a decade
  • The largest year over year increase of listing inventory in forty-five months
  • The first year over year decline in median rent for non-doorman apartments in seventeen months
  • New development median rental price declined year over year
  • Luxury market rents retreated from their year-long price growth
  • The starter (bottom 10%) reached a new median rental price record


______________________________________________________
BROOKLYN RENTAL MARKET HIGHLIGHTS

“The challenge of a near-record decline in new leasing activity and the recent gain in market share of landlord concessions have been amplified due to COVID-19′ shelter in place’ rules for real estate agents.”

  • The number of new leases fell annually for the eighth straight month
  • Listing inventory expanded for the first time in eleven months
  • The market share of landlord concessions rose annually for the first time in seventeen months


______________________________________________________
QUEENS RENTAL MARKET HIGHLIGHTS

[Northwest Region]
“New leasing activity continued to see significant year over year declines as state “shelter in place” rules during the COVID-19 crisis have limited new rental transactions and price discovery.”

  • Median rent fell year over year for the first time in eight months
  • The market share of landlord concessions set a new record over four and a half years of tracking
  • Nearly two-thirds of 1-bedroom rentals had some form of landlord concession, a new record



VIDEO State of the City II: Navigating Through COVID-19

Reuveni Real Estate’s President and CEO, Shlomi Reuveni moderated a panel discussion on COVID-19’s effects on market conditions in NYC and Miami. The panel consisted of:

  • Hall Willkie, President at Brown Harris Stevens
  • David Von Spreckelsen, Group President at Tolls Brothers City Living
  • Edgardo Defortuna, President and CEO at Fortune International Group
  • Jonathan J. Miller, CRE, CRP, Member of RAC, President and CEO at Miller Samuel Inc.

You can watch it here:


Existing Home Sales Don’t Reflect COVID-19 Yet

It is almost the middle of June so why am I charting the NAR Existing Home Sales Data (EHS) published a few weeks ago (at the end of May)?

Because in a crisis that is changing on a daily basis, the report doesn’t really reflect the COVID-19 crisis yet which technically began in mid-March when it was declared a global pandemic. I wanted to make that point.

The NAR May EHS Report reflects closings from April which generally reflect contracts signed from February and March. Therefore the June Report, which reflects closings in May, which will generally reflect contracts from March and April. Even then, the first half of March was not within the confines of COVID-19. Also, remember, this: While existing home sales currently account for 90% of all home sales, the NAR sample size only reflects 40% of all MLS data.

In creating the following charts, I avoided seasonally adjusted data and only looked at the actual data. I gotta tell you, the housing market has been incredibly consistent for years:

  • Seasonality has been maintained
  • Listing inventory has fallen
  • Prices have risen


And mortgage rate trends have sort of drifted lower…

And it looks like fluctuations in mortgage rates have had no impact on seasonal price trends.

Inflation-adjusted wage growth didn’t start rising until halfway through the 2007-2020 period which correlated with price trends.


It looks to me that wage growth drove prices higher but the lack of inventory intensified the consistency and steepness of price growth. Mortgage rates don’t seem to be the direct driver of price trends.

MiB Podcast: Jonathan Litt on Real Estate Investments – How To Create Value In Real Estate

My friend Barry Ritholtz is a prolific provider of high-quality, all over the place content and his Bloomberg ‘Masters in Business‘ podcast stream is no exception.

This week he speaks with Jonathan Litt, who is the founder and chief investment officer of Land & Buildings. I highly recommend listening to this interview if you are in the business of real estate.


[click on image to play]

VIDEO Interest Rates Don’t Seem To Be Going Anywhere

This week the Federal Reserve provided some insights on how they see the world for the next two years in this WSJ piece: Fed Officials Project No Rate Increases Through 2022:

Watch this clip.


Getting Graphic


My favorite chart of the week of my own making


Len Kiefer‘s Chart Handiwork


Upcoming Speaking Events

June 16, 2020 – Curbed/Streeteasy ‘The Neighborhood’ Virtual Panel “Don’t Call It a Comeback: Patterns in NY Housing Market Recovery

Since the pandemic necessitates a virtual event, notice the menu item for breakfast on the upper right corner of the event landing page. It looks like we self-serve, self-bake in this virtual world.


[click on image to register]


June 18, 2020 – Urban Land Institute (ULI) New York Webinar Series: Assessing NYC’s Residential Real Estate Market


[click on image to register]

Appraiserville

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

Inspection Stories: Vertical Air Conditioning

How do you present this in your appraisal report?

OFT (One Final Thought)

The AppleWatch can’t do all that.


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 be virus-free;
  • You’ll buy an old watch;
  • And I’ll think about thinking about skateboarding again.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


May 29, 2020

At Some Point Housing Has To Fly On Its Own

Flying in circles doesn’t necessarily beat not flying at all.

But I digress…

The Plural of Anecdotal is not Data

I have found the past several months exceedingly challenging because everyone wants to know what the number is. You know, the discount that should be applied to every single property in the Manhattan market to reflect the COVID-19 discount.

Well, I’m here to tell you it doesn’t exist yet in a credible way. Current numbers being shared are quite misleading because they reflect closings and we know that most closings have linkage to the pre-COVID19 world prior to mid-March. In an amNY article, factual information is presented by two data providers commonly used by market participants but they are clearly out of context:

Streeteasy results

Driven sellers, however, weren’t afraid to lower their prices in April. The Manhattan price index that StreetEasy monitors fell 2.7%, to $1,075,336. Brooklyn’s price index was down 1.8% to $689,989, while the price index for Queens remained relatively flat at $510,345.

I don’t disagree with the results, here, it’s just that they don’t reflect the COVID-19 world. I would speculate that nearly all sales that closed in April had linkage to the world before Covid-19 whether that was the inspection, negotiation, or contract signing. In addition, Manhattan housing prices were sliding since the beginning of 2020 so sliding in April means nothing, actually. Their index uses the repeat-sales methodology found in Case-Shiller so the lag time of this methodology is longer than relying on aggregating closings. Streeteasy brought me in to look at the index before it launched years ago and I had experience with a now-defunct index that competed with Case Shiller.

Property Shark results

The median sales price in May also stabilized at $700,000, which marked a 2% gain over the May 2019 median price. Even though pricing trends have been “firmly positive throughout the crisis,” PropertyShark’s report noted that the 2% May gain represented “the smallest year-over-year price growth” in 2020.

This analysis using closed sales suffers the same problem as discussed for the Streeteasy results. The vast majority of May closing prices reflect pre-COVID19 conditions since the average number of days between contract signing and closing is around 90 days. In other words, a large swath of their May closings were contracts that occurred in February or March. Again, likely accurate results but provide no indication of actual market conditions post-COVID19.

MANHATTAN IS STILL DEVOID OF EMPIRICAL EVIDENCE. ALL WE HAVE IS ANECDOTAL.

I suspect the data-picture will change quickly once real estate brokers are allowed to physically show real estate in NYC. Virtual inspections are occurring but their success rate for causing a sale by someone who has never physically inspected the property remain as outliers.

COVID-19: The difference between “Density” and “Overcrowding”

Since the crisis began in mid-March, I’ve been obsessed with the misuse of the word “density” as a driver of the virus. Manhattan has been continually described as a hotspot because of its high population density, yet Manhattan had the lowest infection rates in the five boroughs of NYC but has the highest density.

The same pattern is occurring in LA. Density is certainly a factor, but not THE reason. poverty and overcrowding are also significant factors.


[City Obervatory]


[City Obervatory]

But neighborhoods in South LA and the San Fernando Valley are epicenters of the pandemic, despite not being very dense. And some relatively housing-dense areas, like Santa Monica and Venice, have low COVID-19 case rates. It’s a more complicated relationship than “more housing equals more COVID”.

Why does this matter?

Since many people are prognosticating the death of cities and the boom of the suburbs it is hard to continue to make that argument when the rural Texas panhandle is a hot spot.

And then consider the mindset and our collective memories if a vaccine is developed in 2021. Will the market recover as a “V” or a “Swoosh?”

And then consider the states where social distancing protocols are few and far between as everyone is anxious to get back to business as usual. This restaurant trend suggests a second infection wave in the fall, no?

REFA:”Suburban Green Shoots” Panel Discusses The “Urban to Suburban” Upside

I presented and moderated a fascinating discussion with Randy Salvatore, CEO & President of RMS-Companies, a large development firm in Fairfield County and Jim Fagan, Executive Director at Cushman & Wakefield in Westchester and Fairfield Counties.

Copy the password 1C*%x&9R and then click on the image to see the discussion.


Paraphrased from the REFA web site: The Real Estate Finance Association assists real estate finance professionals by communicating industry information, providing continuing education and networking opportunities and offering venues for members to exchange experiences.

I have worked with REFA in the past and found the organization to be an energetic proactive networking group.

And The Big Manhattan Sales Keep Happening

To escape the COVID-19 talk, I returned to the once tired subject of record-setting housing prices as a respite to the current nightmare. I was nudged to this shift after reading the Amy Rose piece in Forbes: ‘Covid-Pricing’ Hits High-Profile Homes Across U.S. And Billionaires Are Snapping Them Up.

And I chuckle every time I say this, but I had to move my company logo to the left on the following chart to accommodate last year’s record sales price. I will continue to update the year 2020 results but here is what I have for record closings by property type for the year 2020 so far (none are all-time records):

Co-op | $43,000,000 | 4 East 66th St 8
Condo | $56,258,312 | 220 Central Park South 65
Townhouse | $38,000,000 | 8 East 75th Street


[click to expand]

Year over Year April Hamptons Sales Down 73.7%

There was a good read on the state of the Hamptons market in the WSJ. The Hamptons experienced a massive surge in rents in March and April as NYC residents flocked to safety while sales are down sharply.

“It was really a panic,” said real-estate agent Susan Breitenbach of the Corcoran Group. As a result, very few rentals remain available for either the spring or summer, and those that do become available get snapped up quickly. Ms. Breitenbach said last week she arranged a rental for a house that was asking $900,000 for the summer; there was a bidding war and the house rented at close to that amount.

I would imagine that rental landlords are going to be anchored to these “panic” numbers” next year yet conditions post-COVID19 will likely be different.

Here are the numbers we saw for the sales market that I define the Hamptons as the hamlets from Westhampton to Montauk that were used in the story.

WSHU: Will The Aftermath of COVID-19 Push The Suburbs Ahead?

For many real estate participants in the suburban markets surrounding NYC, there is a sense of hope that the suburbs will see the long-term benefits of the “urban to suburban” shift that seems to be occurring in the short-term. Click on the image to play the clip.


[WSHU]

Forbes: In A Quickly Changing Market, Pending Sales Are The Best Indicator We Have Despite Flaws

I’m trying out this Forbes thing. Can you support me by following me on Forbes? Just click “follow” under my name at the top of this page.


Original Article: In A Quickly Changing Market, Are Pending Sales A Lagging Indicator?

As I read through available housing stats during this COVID-19 era to get a general sense of where the overall market is going, it is notable how difficult that task has become. Everything we look at seems to require an asterisk. While such punctuation was required before this global pandemic, the need for fresh insights makes the qualitative aspects of information more critical. We know that closing price trends are lagging indicators, but tend not to think of current contract trends as a lagging indicator, yet that assumption has always been wrong. The day to day nature of the COVID-19 pandemic has made the need for qualifiers more evident.

The National Association of Realtors (NAR) metric known as the Pending Home Sales Index (PHSI) is regarded as the fastest moving barometer of market direction. Still, its flaws tend to be overlooked, especially when compared to closed sales.

Meeting of the Minds

The “meeting of the minds” process is where the buyer and seller negotiate general price and terms, usually facilitated by listing and buyer brokers. Once the parties are in sync on price and terms, their respective attorneys work out the written language, which leads to the signing of the contract. Once the contract details are ironed out, both parties sign, and it then appears as a written deal in the MLS.

NAR posits that closing trends follow contract trends by two months.

The Pending Home Sales Index is a monthly release

The April 29th release by NAR is the most current version available as of this moment, and it reflects the market data of March that includes “meeting of the minds” data from February. This PHSI release represents a two-month lag, and the following chart using non-seasonal YOY% change patterns is pretty terrifying. And that’s just the data through March.


NAR Pending Home Sale Index compiled from publicly shared data and charted by Miller Samuel. JONATHAN MILLER

The May PHSI report that uses April contracts will be released on May 28th (four days from now), but I deliberately wrote this beforehand to show the potential lag in contract data.

Pending Sales (Contracts) Is Less Backward Looking

NAR publishes the PHSI monthly and always describes it as “forward-looking,” yet it is not. I think of their PHSI index as “less backward-looking” because it is only forward-looking in the context of closed sales, and we know closing sales are lagging indicators. Closed sale dates generally lag contract dates by 30 to 90 days, the latter being markets like New York. Sales contracts can lag the “meeting of the minds” by a few days or more than a month, depending on the market location and condition.

Contracts Can Blow Up

There are specific periods, especially in quickly deteriorating markets, when large swaths of contracts don’t close. I recall that about one-third of pending sales blew up shortly after the housing bubble burst more than a decade ago. Just prior to the Coronavirus crisis, the contract failure rate was in the single digits. I haven’t found fresh post-COVID19 data on this yet (because it is lagging).

In New York City’s situation where I am based, closing attorneys tell me that written contracts lag the “meeting of the minds” by a month or more right now. Buyers are trying to cut better terms, and sellers are trying to keep the deal together. However, in a rapid market, especially those markets that have recently eased restrictions for real estate brokers to physically show properties, that delay might only be a few days.

The Contract Coverage Area Is Very Broad

NAR says that the PHSI report covers about 20% of the market and we’re not sure what 20% it covers in any given month. Hopefully, most of us know that there is no “national housing market.” Contract activity is much more useful as a local trend indicator but it can give us a sense of the U.S. housing zeitgeist.

Typical Report Timeline

“Meeting of the Minds” – price and terms agreed to

[Less than a week to more than a month]

“Written contract” – parties sign

[A month]

PHSI Reported By NAR “Contracts”

[Two months]

Existing Home Sales Reported BY NAR “Closings”


I still look at pending home sales data as a broad market trend indicator because it is the most recent we have, but it is more useful in local market conditions. But either way, its use often needs an asterisk.

UPDATE Pending Home Sales Slump 21.8% in April


Getting Graphic


Our favorite charts of the week of our own making


Appraiserville

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

USPAP will no longer be ‘Misleading’

Back in early February here in Appraisalville, I questioned a new definition that appeared in USPAP for the term “misleading.” Many others took to their platforms to criticize it, such as Phil Crawford of the Voice of Appraisal podcast and Dave Towne, a prolific writer of all things that keep appraisers sane.

Dave writes today:

Gad zooks…..I (and lots of others) hope and wish the Appraisal Standards Board would QUIT making changes to USPAP every friggin’ two years! There is no way to satisfy everyone’s individual perspective as to how USPAP should be written.

Here is the problematic definition from the current version of USPAP.

While I didn’t question the intent of TAF (the irony of this statement doesn’t escape me), I felt they had overstepped their bounds and the determination of the qualitative nature of intent was for only for the courts to decide. This situation is likely a result of the too frequent two-year updates. After three decades, there isn’t much to update in our industry and therefore the operating boundaries of TAF are more likely to be inadvertently crossed as reasons for changes become harder to find.

The definition of “misleading” unleashed a wave of criticism because it meant that if an appraiser made an inadvertent error (think about the 800+ fields on a URAR), they were essentially a criminal. This exposed appraisers to a potential tsunami of litigation and real estate attorneys were excited about the prospect.

There is always the usual good-faith attempt to rationalize the pretzel logic but all this did was heighten the confusion and angst of appraisers. For what purpose?

Thankfully it looks like the definition of “misleading” has been scratched in the Second Exposure Draft 2022-23 of USPAP:


I am thankful that the industry response has influenced this edit and appreciative that The Appraisal Foundation listened.

Please don’t forget to submit comments to the other proposed changes by July 30, 2020.

OFT (One Final Thought)

I’ve had three.


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 be more virtual;
  • You’ll be more viral;
  • And I’ll be more visceral.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads


May 1, 2020

Gravity for the Housing Market is Overrated

I can see the benefits of letting this loop for hours:

But I digress…

From My Matrix Blog: Contract Data Is Pending Data Is Lagging Data

In our post-Coronavirus world, it is clear that market conditions and our understanding of the future are subject to change every day. In my prior post Establishing the COVID-19 Demarcation Line: From ‘Hanks To Banks’, data that falls after the line represents a different market.

So how do we determine what data falls in after the demarcation line? It’s not as straightforward as it sounds.

Throughout my career, I have seen brokerage firms publish pending/contract reports, touting pending trends as more reliable than reports based on closings. I don’t look at them as better or worse, just a different way to look at the market. The simplistic, uninformed argument for pending sales is that contract dates occur before closing dates, so they are more current. Incidentally, contract prices are not readily shared. I get all of this. Yet I have seen the failure rate of contracts be as high as 40% – in other words, many contracts might not close whereas closing reports are solely based on successful transactions. Still, pending sale trends are useful as long as the reader understands their shortcomings. I plan to develop one someday.

Closing data and contract/pending data lags the “meeting of the minds.

Meeting of the minds (also referred to as mutual agreement, mutual assent, or consensus ad idem) is a phrase in contract law used to describe the intentions of the parties forming the contract. In particular, it refers to the situation where there is a common understanding in the formation of the contract.

While we know that closing dates lag the “meeting of the minds,” we also need to understand that signed contract dates are lagging indicators, often by 2-4 weeks. During this crisis, I’m speculating the failure rate will be high initially, and the time lag will be on the longer end rather than, the shorter end of this 2-4 week range.

Here’s why contract dates are a lagging indicator and not necessarily more insightful than closing data:

1) The “meeting of the minds” occurs when buyers and sellers negotiate price and terms, usually facilitated by a real estate agent or broker.

2) The price and terms are handed off to transaction attorneys who work together to craft language agreeable to both parties.

3) The contract is signed by both parties and often indicated as such in an MLS-type system.

4) In some markets or marketing periods, especially when a market is cooling, many contracts never close, so their initial inclusion makes pending trends reports suspect.

If there is a four week signed contract lag from the meeting of the minds, and considering the March 15 demarcation line for post-Coronavirus, that means that with us being six weeks into the crisis, we are only able to see two weeks worth of post-Coronavirus data. And even with that reality and current shelter in place rules, many current contracts might have been older deals that were facilitated by the buyer who had already inspected the home in January/February – we are seeing some of that now.

In other words, relevant data on the new market remains extremely limited.

Barron’s Live Interview: The Covid-19 Crisis Doesn’t Really Compare To 9/11

I’ll place my interview by Beckie and Lucy here as soon as I get a copy. DONE.

UPDATED

The recording of the interview was just placed on the Barron’s web site. You have to register if you haven’t already done so in order to listen to it (click the image):


[click to listen]

To thwart random outdoor noises, I attempted to get points for style when speaking for this event (I did hear a few kids in the background but I swear they weren’t mine):

The Land Angle In The Era of Social Distancing

This Mansion Global article For Investors Seeking Stability, Land Maintains its Classic Appeal makes the pitch for land as a favored investment, and not just for the asset value but for practical nature of inspection during this historic moment of social distancing.

While the angle is interesting, I’m much more interested in the concept of appreciation as it relates to land. In other words:

  • land appreciates
  • improvements depreciate

…if you want to be a purist about the concept.

I wrote about this when I was a Bloomberg Opinion Columnist from 20014-2015 called Housing Bust Wasn’t About the House.

.

What does “Back to Normal” Look Like?

Data Report with Jonathan Miller: So Cal, So Good

Douglas Elliman has a new podcast channel and this was a recent town hall meeting that I “Zoomed” to SoCal agents.

Getting Graphic


Len Kiefer‘s Chart Handiwork

Upcoming Speaking Events

Join us and guest speaker, Jonathan J. Miller, industry-leading commentator, appraiser, consultant, and author of real estate reports, for an in-depth discussion: Valuations then, now and the day after tomorrow… Where are the bargains? The banking industry. New Corona lending guidelines. Re-opening the real estate industry – what, when, and how?

  • Prepare for the event:
  • Register Here to receive the Zoom link
  • Email us your questions in advance

Additional Q & A live opportunities during the session.

We look forward to “seeing you”.

Appraiserville

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

John May Shows Us How We Can Convey The Crisis To Our Clients

John May of Louisville Appraisals reads these Housing Notes regularly and sent a cool chart. I love it because it showcases his local market knowledge and can be a great visual to educate is clients.


[click to expand]

Housing Wire Interviews Phil Crawford (VOA) on Appraising During COVID-19

Good stuff- a great listen:

In this episode, the host of the Voice of Appraisal Radio podcast also touches on whether or not the business is an essential service. Crawford also shares his perspective on why appraisers need a bigger voice in policymaking and touches on the potential impact of some recent announcements from federal banking regulators that allow appraisal postponements up to 120 days after a mortgage.

Dave Towne Opines On How We Can Become Unglued If We’re Not Careful

It’s a wonderful write-up:


Folks….

This essay was tough to write, but it’s important. (Yes, that’s my opinion!)

The current state of affairs in this country, and globally, is the worst we humans have seen in generations. Most of us were not alive during the last major pandemic in the early 1900’s, or even during WWII, when living situations were very trying for many people.

In later years, pandemics have occurred, but governments’ reactions and actions to those were much more mild as compared to this one. You can read more about those here: https://www.livescience.com/worst-epidemics-and-pandemics-in-history.html

The pandemic we are in now is unprecedented in modern history. Due to governmental inactions, and actions, the devastation to humans and world-wide economies will last many more years.

This pandemic, and the way it is being managed, is affecting people and relationships in profound ways. Many very adversely.

I write this because for about the last decade or so, I’ve had a very nice, respectful, even joyful relationship with another appraiser. I learn from that appraiser and appreciate the dialogue and experiences we’ve shared.

Not long ago, I wrote an essay concerning appraiser conduct involving an aspect of our work. Over the course of several days, the appraiser acquaintance has ‘come unglued’ as the expression goes about my opinion and choice of words, and I’m very concerned. The desire to just not be able to move on appears obsessive to me.

In that essay I used one strong word, based on my opinion, which does not appear in any of the requirements or guidelines appraisers must follow. I used that word to make a point because too many appraisers want to make excuses why the written requirements and guidelines can’t or won’t be followed. That bothers me, from an ethical standpoint. My point was to encourage appraisers to pay attention to the assignment SoW, additional assignment conditions that go beyond USPAP, and other expectations clients want to see in our reports. My other point was to say that ‘new technology’ being promoted by several companies is not appropriate to use in all assignments.

I enjoy respectful discussions. Dialogue helps greatly. I learn from it. But sometimes responders and I will just have to ‘respectfully disagree.’ However, when verbiage turns to name calling due to frustration because of a single word disagreement, it causes me to really ponder the circumstance. I believe our current pandemic situation may be exacerbating the underlying causation of the glue-pot explosion the appraiser has exhibited.

Medical professionals who understand human psyche have been sounding alarms about personal actions relating to how this pandemic is being managed….or not managed well, depending on your point of view. People are becoming more and more frustrated, spouse/partner and child abuse is on the rise. Burglaries, robberies, thefts and other crimes are beginning to increase. Incomes have been destroyed. Businesses have been upended. Relationships have suffered. People have become more desperate as governments have turned normal society nearly into martial law, restricting normal freedoms. If things don’t change, and we don’t get back to ‘normal’ relatively quickly, attempts or actual suicides will also rise. Chaos amongst the population will manifest itself.

Appraisers, as a general statement, tend to be loners in our profession. Few appraisers take time to associate with peers in formal or informal settings. Which is a shame, because some of the nicest people you’ll meet are your peers. They are not your enemy. Make an effort NOW to meet and get to know appraisers in your area. You won’t regret it.

(On a related personal note, I have a “sista from anotha motha” because I made an effort to be helpful to another appraiser 1,300 miles away when we ‘met’ on a web forum. That turned into meeting in person to attend a live CE class together, and has evolved into a wonderful brother/sister relationship over the past dozen or so years.)

I was moved to write this because I really do care about the appraiser whose glue-pot is boiling. And I’m concerned about other appraisers who may not really understand how their moods, emotions and expressions may be manifesting adverse behavior within themselves, and with others around them…..due to the exterior pressures we are enduring.

One word of disagreement, or some other basically silly issue, should not be the catalyst to blow a hole in an otherwise healthy and enjoyable relationship.

It’s important that all of us pay close attention to our activity and mental state on all levels. The ‘perceived normal’ at the moment actually may not be. Anxiety, irritability, obsessiveness and depression are devastating to humans.

Please be careful, talk to appropriate professionals if things are tilting, and stay well.

OFT (One Final Thought)

An old chestnut tweaked for the crisis. I forgot how much I loved this commercial.

Brilliant Idea #1

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  • They’ll be more what’s up;
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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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

Reads, Listens and Visuals I Enjoyed

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April 24, 2020

Hip Hop Housing In The Dog House

Quarantine time has given us and our pets the opportunity to master some new skills. And not because I’m some sort of quoted source on pet-friendly real estate or track data on the topic of pets in housing.

But I digress…

Manhattan Listing Inventory Is Listing In The Spring

If you want to see empirical evidence that the market is not performing as we would expect in the spring, this is it. Listing inventory rises at the beginning of each year in anticipation of additional demand in the spring.

Not this year.

A Strong First Quarter In The Hamptons Until The ‘The Rona’ Paused It

I’ve been writing the expanding Elliman Report Series since 1994 and this week Douglas Elliman published our research for The Hamptons, The North Fork, and Long Island.


HAMPTONS HIGHLIGHTS

Elliman Report: The Hamptons Q1-2020

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • Listing inventory fell sharply year over year for the second straight quarter
  • The number of sales rose sharply from the year ago quarter for the second straight time
  • Median sales price rose annually for the second time in three quarters
  • Largest listing discount in eight and a half years


NORTH FORK HIGHLIGHTS

Elliman Report: The North Fork Q1-2020

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • Listing inventory fell sharply year over year for the first time in six quarters
  • The number of sales increased annually for the second straight quarter
  • Median sales price increased year over year for the tenth time in twelve quarters
  • Marketing time and negotiability compressed from year-ago levels


LONG ISLAND HIGHLIGHTS

Elliman Report: Long Island

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • List inventory fell to the second straight quarterly record low
  • Number of sales increased annually for the sixth time in seven quarters
  • The median sales price has not seen a year over year decline in seven years
  • Condo listing inventory fell to a new record low in eleven years of tracking
  • Single family listing inventory saw a record year over year decline in twelve years of tracking to a record low
  • Luxury listing inventory declined year over year for the first time in nine quarters

Many Buyers, Sellers in Housing Holding Pattern

Here’s a clip from Bloomberg Radio on the state of the housing market:

Overemphasizing Population Density As The Cause Of The Covid-19 Crisis

This tweet got me thinking about this topic:

As cities will undoubtedly face renewed housing competition from their suburban counterparts when we get to the other side of the crisis, there seems to be a distorted assumption that the high rate of infection in cities is the exclusive purview of high population density (which is the secret sauce that makes a city so great).

Yet that’s not quite fair and will likely be rethought as we review this crisis in the rearview mirror down the road. As the great read in Vice describes:

If past actions predict future results, cities are in trouble. In terms of containing the virus to begin with, New York City was days late to shutting down schools and issuing stay-at-home orders compared to other American cities with better outcomes, days that researchers are increasingly identifying as critical in the virus’s spread. And, thanks in large part to profound failures on the federal level, Americans simply cannot access accurate coronavirus testing, dooming us to languid and troublesome returns to normalcy.

As Henry Grabar in his Slate piece said:

A cursory look at a map shows that New York City’s coronavirus cases aren’t correlated with neighborhood density at all. Staten Island, the city’s least crowded borough, has the highest positive test rate of the five boroughs. Manhattan, the city’s densest borough, has its lowest. Nor are deaths correlated with public transit use. The epidemic began in the city’s northern suburbs. The city’s per capita fatalities are identical to those in neighboring Nassau County, home of Levittown, a typical suburban county with a household income twice that of New York City. True, New York City apartments are crowded. The share of housing units with more than one occupant per room is almost 10 percent. But that number is 13 percent in the city of Los Angeles. As a metro area, New York isn’t even in the top 15 U.S. cities for overcrowding. It’s not even the American city with the most apartments per capita (Miami) or immigrants (also Miami), to take two other characteristics that critics say might be associated with coronavirus infections.

[click on image for supporting research]

Aren’t Banks Doing What They’re Supposed To?

More than a decade ago when the housing/credit bubble burst the focus on exiting the financial crisis was to bail out the banking industry. They were essentially insolvent and by not forcing them to “mark to market” their asset values to their new lows which would force them to declare insolvency, they survived. Banks had become reckless and in the eyes of the government and needed to be bailed out or the global economy would collapse and caveman days would return.

My friend and zen-goddess of the housing data vertical Ivy Zelman of Zelman & Associates paraphrased a quote by Howard Marks: “Capitalism without loss is like being Catholic without hell.”

However, my thinking here is that the federal government is expecting healthy banks to take a bullet for the economy and the banks show little appetite for suicide.

Going into this downturn, banks were in relatively good shape and the government is leaning on them to facilitate saving small businesses and independent contractors. But the banks are not being reckless as I would assume the federal government wanted them to be in order to save the economy. Yes, the $350 billion dollar stimulus showed how the payouts were skewed to larger businesses and existing customers of the banks, but that’s how the legislation was written. There is another batch of money for SBA that was just put into law that hopefully will fix and redirect emphasis towards small business.

But the banks are doing what they didn’t do in the prior crisis, focus on risk management.

That’s because the banks are concerned about self-preservation and likely do not trust the word of the federal government in the execution of new rules to enable trillions of funds to be distributed to individuals and small businesses. Here’s a great summary by the Urban Institute.

In other words, the credit box is shrinking.

  • Mortgage rates are low but higher than pre-covid-19 despite the 1.5% fed funds rate drop
  • Credit score requirements are higher
  • Loan-to-value ratios are lower
  • Forbearance periods are followed up by immediate repayment
  • 20% down on jumbos is commonplace

These institutions are demonstrating that they are fully aware of the risk and won’t be the backstop on the crisis – the federal government will be forced to take the lead. So much for hell.

Noble Black on NBC: “last-minute discounts becoming more common”

Here’s a clear, logical depiction of the current state of high-end real estate from my friend and top broker Noble Black.


The Rubin Special: Josh Rubin Interviews Jonathan Miller

About 6 months ago, my Facebook account switched to require double authentication somehow but didn’t text by code for access. I tried for months to work with Facebook to regain access and they were remarkably unresponsive so I gave up and feel better about life in general as a result.

When my friend Josh Rubin reached out, one of the top-producers at Douglas Elliman Real Estate, he said we can do his Facebook Live event as a Zoom call into Facebook. I’m not sure how all of this works, but at least both of us confirmed we were at wearing pants for the discussion.

Check it out:

[click on image for the interview or play on YouTube link below]

The Los Angeles area and Aspen/Snowmass Village Markets Were Looking Good Before Covid-19

The story on these market reports tell us that the first 2.5 months were relatively robust and the last two weeks of the quarter were not.


GREATER LOS ANGELES INCLUDING WESTSIDE AND DOWNTOWN SALES HIGHLIGHTS

Elliman Report: Los Angeles Q1-2020

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • Listing inventory declined year over year for the second straight quarter by the largest amount in five years
  • All price trend indicators rose year over year for the fourth consecutive quarter
  • The number of sales rose year over year for the second consecutive quarter after six quarters of declines
  • More than one-third of all listings sold within a month
  • Luxury listing inventory for condos and single-families fell year over year in three of the past four quarters

MALIBU/MALIBU BEACH

Elliman Report: Malibu/Malibu Beach Q1-2020

  • Single-family sales rose sharply year over year as condo sales declined

VENICE/MAR VISTA

Elliman Report: Venice/Mar Vista Q1-2020

  • Venice sales surged across property types as Mar Vista sales fell short of prior year totals

ASPEN SALES HIGHLIGHTS

Elliman Report: Aspen/Snowmass Village Q1-2020

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • Listing inventory declined year over year for the fourth consecutive quarter
  • All price trend indicators surged over year-ago levels
  • Sales fell sharply year over year to the lowest quarterly total in a decade
  • The listing discount rose to its highest level since 2011 as sellers had to travel farther on price to meet the buyer
  • Both condo and single-family listing inventory declined annually for the fourth straight quarter
  • Luxury price trends surged while luxury inventory fell sharply year over year for the second straight quarter


SNOWMASS VILLAGE SALES HIGHLIGHTS

Elliman Report: Aspen/Snowmass Village Q1-2020

“After noticeably stronger results in the first two and a half months, listing inventory growth slowed as market awareness of Coronavirus occurred in mid-March.”

  • Listing inventory declined year over year for the fifth consecutive quarter
  • Average price per square foot declined while the number of sales surged year over year
  • The 3-bedroom market showed the most annual growth in price and sales trends
  • Luxury price trends and listing inventory declined from year-ago levels

Getting Graphic

Len Kiefer‘s Chart Handiwork

This week, his charts are all about Fed Beige Book terminology:

Appraiserville

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

COVID-19 Line of Demarcation Is From Hanks To Banks

In order to understand what is happening now, we need to ween ourselves off of what happened before this crisis and focus on finding data exclusive to the post-COVID-19 era. In Manhattan, that data set is not yet apparent because we are in nearly a total market shut down but it is evident elsewhere to a limited degree. From my perspective, the demarcation line for the onset of the crisis is where market participants would have to be living in a cave on a desert island to be unaware of the sharp pivot in market sentiment.

For me, that date is March 15th which was the date of the Federal Reserve rate cut to zero and the second cut in less than two weeks.

My friend and California appraiser Ryan Lundquist proclaimed March 11th which was the date Tom Hanks announced he and his wife had contracted COVID-19.

I was talking about this difference in these dates with a friend, Chicagoan, and RAC appraiser Michael Hobbs who brilliantly dubbed this four-day window from March 11 to March 15 as: “From Hanks To Banks.”

Whatever your specific local demarcation line is, use it to keep the data for these two market periods separate.

OFT (One Final Thought)

I’m hopeful that society is able to get back into other’s personal spaces when we get to the other side of the Coronavirus crisis. There is a lot of inspiration coming from our first responders, and workers on the front line that have no choice. This cover says it all.


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 rap;
  • You’ll sing from the windows;
  • And I’ll keep looking for actual data.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads

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