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Billionaires’ Row: I Can See For Miles And Miles, Until You Can’t

December 21, 2015 | 2:12 pm | | Favorites |

UPDATE: The following article made the front page of the NYT today, my 13th A1 appearance (but who’s counting?).

New York Times’ Matt Chabin writes a piece about the “Super Tall” phenomenon on Manhattan’s West 57th nicknamed “Billionaires’ Row” called Developers of Manhattan Spires Look Past 1,000-Foot Neighbors.

“It’s like the Who song,” said Jonathan Miller, president of the appraisal firm Miller Samuel. “You can see for miles and miles and miles. Until you look into your neighbor’s building.”

The changing skyline is a well worn and controversial discussion throughout much of Manhattan’s storied (pun intended) real estate history. It’s quite amazing to appreciate how much the skyline has changed over the past century, nearly always moving taller. In the current iteration of growth, the potential benefit seems to be the financing of affordable housing.

billionaires row skyline

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NYT v. WSJ Smogdown: Status of Chinese Investment in U.S. Real Estate

December 1, 2015 | 11:39 am | | Favorites |

lianyungangchinaSmogYahoo
[Source: Yahoo News]

Last weekend I read two terrific articles on Chinese real estate investment in the U.S. but they seemed seemed to conflict – check out the headlines:

New York Times Chinese Cash Floods U.S. Real Estate Market

Wall Street Journal Chinese Pull Back From U.S. Property Investments The subtitle says it all – The nation’s economic and stock-market slump puts buyers on the sidelines

Are the Chinese flooding the U.S. market now or are they pulling back? Which is it? Or is it both?

In my recent trip to Shanghai, I spoke to and interviewed many, many real estate investors at The Real Deal Forum. I got the impression that investment has pulled back a bit in 2015 but expectations were high that investment would expand again, although not to the level of the past 5 years. Of course I was doing this in a biased environment – at in investor conference. I was consistently told that government efforts to prop up the stock market spooked much of the smart money out of the market since the actions were taken to calm everyday investors.

The New York Times piece seemed prompted by a P.R. pitch from the Chinese developer for their Dallas suburb project enticed with a suburban angle. It was a refreshing angle since Chinese real estate investment in the U.S. has been an urban narrative and specifically focused on the high end. The article illustrated just how massive the investment patterns have been. To date the narrative has been focused on super luxury condos in expensive metropolitan areas, while the suburbs got limited attention.

NAR2015internationalCHINESEnyt

The WSJ article is more orientated towards the past few weeks while the NYT article is a longer term view. Both publications place emphasis on NAR’s Profile of International Home Buying Activity whose results emphasized the Chinese investment surge of the previous year. The survey results only reflect the market through last March, so it is 9 months behind the current market. The Chinese investment numbers are staggering, and they are probably understated. Since the NAR report is simply a survey of it’s members and NAR has limited exposure to New York City, especially Manhattan – a hotbed of Chinese real estate investment activity.

NAR2015internationalCHINESEwsj

Incidentally, do the above 2 charts look similar? They both relied on the NAR report.

The NYT piece set the table on the entire multi-year phenomenon using a ton of cool charts while the WSJ attempted to illustrate the change in recent weeks Both outlets were forced to rely on a lot of anecdotal to make their case. Both articles are consistent with my views as each provided a different context.

The NYT piece provided the long term historical view and the WSJ was a short term snapshot.

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Manhattan Monthly Absorption Rate – August 2015

September 22, 2015 | 2:07 pm | Charts |

8-2015Manhattan [click to expand]

Thoughts The co-op and condo market absorption rates for the $10 million+ market have slowed over the past year while the pace of the sub-$3 million remains extremely brisk. The $3 million to $10 million shows limited change and some stabilization.

Side by side Manhattan regional comparison:

August 2015 v August 2014
8-20158-2014 [click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. (I got tired of the red/gray look in 2014 so I changed it) The blue/red line shows the 10-year quarterly average for context. The pink/orange line represents the overall average absorption rate of the most recently completed month for that market area.

Definition Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the current annualized pace of sales activity in our market report series.


Manhattan Market Absorption Charts [Miller Samuel]

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[VIDEO] Boomberg Radio/TV ‘Surveillance’ 9-21-15

September 21, 2015 | 11:45 am | | Radio |

I was set to speak in studio with Tom Keene and Pimm Fox but had a commuting snafu and had to call in. It was a great opportunity to show a picture of me as a 15 year old. Love these guys. The best. The Bloomberg Television/Radio are clearly pros and handled the last minute change with ease.

We talked about lots of housing markets and the distortion being created by credit conditions.

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[Infographic] NAR gets into the Urbanization Conversation

September 1, 2015 | 10:12 am | | Infographics |

The National Association of Realtors, who is generally viewed as emphasizing suburban single family housing markets, may be plotting a new course. NAR will be sharing more releases on the topic of urbanization in the coming months. They look to be taking the same path as Realtor.com, the online entity who licenses their name from the NAR mothership. Realtor.com has cleaned up their act and has been much more focused on city life after their recent purchase by News Corp (through Realtor.com’s parent company Move), trying to become relevant again by emulating Zillow and Trulia. And of course, the consumer wins.

It’s a good thing too since urbanization is one of the most important housing trends (affordability aside) facing the housing market going forward.

Here’s an interesting infographic released by NAR today:

NARurbanismInfographic

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[Three Cents Worth #291 Ski] Aspen Sales at $10 Million and Above Stay Consistent

August 31, 2015 | 6:19 pm | | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski. Whether I’m on the trail, on the lift or in the lodge, I’m always taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

Over the last decade, sales of high end Aspen residential properties have followed a logical flow, consistent with the overall U.S. housing market. Activity peaking in 2006; extinguished with the Lehman Brothers collapse in 2008; weakness in 2011; showing elevated levels over the past year; all tell the national real estate story. And recently…

3cw8-19-2015A10m
[click to expand chart]


Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami
Three Cents Worth Archive Curbed Hamptons
Three Cents Worth Archive Curbed LA
Three Cents Worth Archive Curbed Ski

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[Video] China’s investors and the safe haven of American real estate

August 31, 2015 | 4:10 pm | | TV, Videos |

Here’s a summary of potential future actions by Chinese investors with the recent spate of volatility in the financial markets.

According to Jonathan Miller, president of appraisal firm Miller Samuel, the tumult in China may lead to even more money finding its way into American residential and commercial real estate. “There are not a lot of investment vehicles in China,” said Miller. “You have the [Chinese] housing market, which is a pretty significant bubble. You have thousands of ghost cities that have been constructed. On top of that, you have a pretty volatile stock market situation. So there is some speculation that there actually will be outflow as a result of this and maybe that will end up in the U.S.” Costello concurs with Miller, noting that China’s insurance companies have been allowed by their regulators to invest in foreign real estate only since 2012. “Unless and until they have to cover losses at home, they’re not going to sell these properties,” said Costello. “They’re going to hold them for the long term.”

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Explainer: Three Ways to Look at S&P/Case-Shiller Index Results

August 25, 2015 | 2:00 pm | Charts |

I have a long history of dissing the relevance of the S&P/Case Shiller Index because of the 6 month lag and the slew of anecdotal link-the-dot official commentary associated with it that literally has nothing to do with the numbers generated (gasping for air). However I feel compelled to look at it periodically because it is part of the media’s monthly market report gauntlet.

The S&P/Case-Shiller Home Price Indices were published today so I thought I’d create a trifecta of ways to look at the same data.

Top Chart – This is the famous year-over-year % change view which I believe is the best way to look at the market and the scariest. They use the seasonally adjusted index and the non-seasonally adjusted index (so did I) but there is virtually no difference. Most news coverage of the index usually link to the press release which embeds this type of chart that uses all the broad indices: 10-city, 20-city and National. The 20-City has long been the primary index that was touted but the references in the media are shifting to the national index and that’s probably a good thing.

Middle Chart – This is the month over month version using the same data. Clearly the seasonal adjustment smooths out the line. However the non-seasonally adjusted versions shows a significant impact from the seasonal nature of real estate – in fact this chart shows that seasonal patterns are becoming more extreme since the financial crisis began. Originally the index was virtually all about the month over month results even though the featured chart was year-over-year. They have since moved year-over-year to the front of the press release and has already influenced the way the index is presented in the media which is good to see.

Bottom Chart – This is the only chart that uses the actual index numbers rather than percentages. It’s a sleepy pattern that seems to wash out seasonality a bit and shows the market in a less intimidating way. Ironically, the actual index trend is visually less interesting. Seems ironic.

8-25-2015CSI
[Click to expand]

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Top 10 Manhattan Apartment Super Talls, 2 are in Hudson Yards

August 23, 2015 | 7:45 pm | |

Crain’s 2015 annual analysis of a wide range of NYC data is worth a look. Get to know the biggest city in the U.S.

Top 10 Manhattan Residential Tallest Towers

manhattantop10sCNY

Affordable Housing Units Built

DeBlasio administrations meets it’s annual goal of building 8,000 annual affordable housing units – the highest total ever tracked (began in 2008).

affordableCrains8-2015

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[Three Cents Worth #290 NY] Tracking 24 Years of Manhattan Sales and Rental Prices

August 23, 2015 | 6:09 pm | | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

It’s been a while since I dropped in on Curbed with a Three Cents Worth post but since I’m currently huddled next to an air conditioner, I really needed to take my mind off the heat and humidity. I thought I’d reach back into history and trend the year-over-year changes in the Manhattan sales and rental markets. I presented the median rental price and median sales prices by quarter back to 1991 measuring their year over year percent change. I’m surprised I haven’t done this before since there is so much discussion about the relationship between the two markets, and whether it’s better to rent or buy…

3cw8-19-2015

[click to expand chart]


My latest Three Cents Worth column: Three Cents Worth: Tracking 24 Years of Manhattan Sales and Rental Prices [Curbed]

Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami
Three Cents Worth Archive Curbed Hamptons
Three Cents Worth Archive Curbed LA
Three Cents Worth Archive Curbed Ski

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[VIDEO] Boomberg TV ‘Market Makers’ 7-27-15

July 27, 2015 | 10:49 pm | | Reports |

Had a nice conversion this morning with Matt Miller and Stephanie Ruhle on Bloomberg TV’s ‘Market Makers.’ Never been on this show before. Wow. Energy+.

Before the show started, we had a active debate on whether ‘American Flyers‘ or ‘Breaking Away‘ was the best bicycling movie. Clearly ‘Breaking Away” was the better of the two HANDS DOWN but I liked the other a lot, especially for someone who likes the whole culture of bike racing. Not sure what bike movies had to do with our ‘state of the Hamptons market’ discussion covering our Hamptons market report for Douglas Elliman, but hey, it was obviously more important to settle the bike movie issue first.

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[VIDEO] Fox Business ‘Risk & Reward’ w/Deirdre Bolton 7-27-15

July 27, 2015 | 10:22 pm | TV, Videos |

Always great to swing by and speak with Deirdre Bolton on her Fox Business show “Risk & Reward.” However today’s show was a bit of a mess for me. Working on 4.5 hours of sleep I said I was talking about “interest-free” then changed it to “principal-free” mortgages – LOL – good grief! Note to self: “interest-only.” Plus my company name was reversed 2x and the chyron had it backwards as well. Didn’t discourage me though – always fun to do the show.

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#Housing analyst, #realestate, #appraiser, podcaster/blogger, non-economist, Miller Samuel CEO, family man, maker of snow and lobster fisherman (order varies)
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