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The Real Deal

[Market Report Pulse] Sales Contract Data Can Mean Nothing

January 16, 2009 | 2:44 am | |

One of the most sought after trending tools for housing markets is contract data. Not listing data, not closed data. Contract data.

Compile a lot of data across all regions, property types and price strata and you are golden. You are observing the market as close to the “meeting of the minds” as is humanly possible – you have its proverbial pulse.

I thought to write about the concept of reporting contract data after I got a call from The Real Deal about a new contract-based real estate market report. Their founder is a very creative, very smart and very successful marketer of real estate, first as an agent and then as a marketing expert for new developments. Visually, the report is beautifully done, consistent with the quality of their firm’s marketing materials and online presence. However, they might consider dropping the name of “real-time” from the report. It’s monthly. I understand the intention, but the use of the phrase “real-time” infers a live feed, which this report is not. Isn’t “monthly real-time” an oxymoron?

A quote from The Real Deal article:

It tracks contracts info. To me, that’s what reflects the marketplace and where we are currently, not closed information, which is actually a look back in history.

Another company attempted “real-time” a few years ago by treating real estate listings like the stock market and began publishing a “ticker” type interface. I have to give them credit for the innovation, but it never really got people’s attention.

But I digress

What is contract data exactly?

It’s a property sale with an executed (both parties signed) contract – It is usually 45-60 days ahead of a closing date if new development data is excluded. Actually this 45-60 day time frame is currently expanding as lenders become more difficult to deal with. New development data in the mix could lag the market by 1 to 2 years.

I sort of dealt with contract activity in the most recent market report numbers in my 4Q 2008 Manhattan Market Overview but not in the traditional sense of aggregating contract data and trending it.

Our appraisal firm began to see a pattern in late September 2008 where current contracts of properties we were appraising, were clearly lower than contracts signed in the summer of 2008. The range was roughly 15% to 20%. My 20% number has been widely referenced by the Fed, Goldman Sachs and others, and in fact, page one of AM New York published the number “20%” in red on the entire cover. But our conclusions were based on more of a case by case analysis, similar to a repeat sales analysis.

I don’t currently issue contract reports but I certainly aspire to, but only when I have credible results. Periodically I’ll see one of my appraisal competitors distribute a press release with their own contracts tabulated. I’ll see real estate brokers and marketing agents issue contract reports.

Readers oooh and ahhhh over the relevancy of contracts because the data is perceived to be fresh and current. In principle it is current, but in practice it is much more subject to skew than other data.

I also wonder why methodologies are never fully provided, especially those prepared by marketing groups or departments.

Here are the issues that make much market analysis of contract reports suspect, despite perhaps the best intentions of the authors.

  • Quantity of data — the key issue that makes much analysis unreliable – absent from the public domain.
  • Location of the data — contract data tends to be sourced from a few institutions or entities so its availability and the potential for skew is very serious.
  • Unit mix of the data — This is subject to skew depending on the source of the data – what type of business they have – who their customers are (low end, high end, studios, 3-bedrooms, etc.)
  • Source of the data — The four largest real estate brokerage firms probably account for 80% of all sales in Manhattan. I know each of the senior management teams so I am fairly confident they will not release contract data in bulk to anyone outside their company, especially to a competitor.

I have never met a broker that will share contract data in bulk because it can jeopardize their company’s sales and commissions. We are able to get contract data periodically, but not in bulk. If producers of contract reports can win me over on these key issues, I am ready to jump in with two feet. NAR publishes a pending contract index and frankly, not many people I know believe the results.

In other words, contract data is the Holy Grail, but I am not convinced it’s yet achievable as a reporting tool.

Now give me a sales contract specific to the appraisal we are working on and I am happy ’cause that’s a whole ‘nother story.

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[Inman Connect] No one is living in tents…yet

January 15, 2009 | 2:36 pm | | Public |

Here’s a quick video snippet of the last two panels of the 2009 New York Inman Connect conference which is always a great time. I was invited to speak at the main session for the last panel of the conference.

The Real Deal magazine parsed out some of the conversations, specifically from Dottie Herman and moi.


[When Brooklyn Was The World] 4Q 2008 Brooklyn Market Overview Available For Download

January 14, 2009 | 10:08 pm | | Radio |

The 4Q 2008 Brooklyn Market Overview that I author for Prudential Douglas Elliman was just released.

The President and CEO of Prudential Douglas Elliman, Dottie Herman, is a big believer in publishing market data to create more transparency for consumers in the market her firm serves – Manhattan to Montauk.

Other reports we prepare can be found here.

Customized tables for the 4Q 2008 Brooklyn [data]( and a series of updated [charts]( are available on our corporate site.

A report excerpt

…The median sales price was $490,000, down 7.5% from the prior year quarter result of $530,000 and down 3.9% from the prior quarter result of $510,000. The year over year change in quarter median sales price has declined for 5 consecutive quarters beginning in the fourth quarter of 2007 when the decline was 0.9%. Subsequent quarters resulted in declines in this metric of 1%, 1.9%, 5.6% and 7.5%. In addition, this is the first time the indicator fell below $500,000 since the first quarter of 2006 when the median sales price was $499,500. Average sales price for the quarter was $559,338, down 5.2% from the prior year quarter average sales price of $590,169 and down 2.8% from $575,287 in the prior quarter. Brooklyn showed declines in median sales price more than a year ahead of Manhattan…

The media coverage of the report is available here as they were obtained (in no particular order). In addition, the headlines and respective links to articles listed below are a fun way to see how the media interprets the report content since every outlet was working off the same information.


Brooklyn Apartment, Home Prices Drop 7.5% as Recession Hits [Bloomberg]
Brooklyn Housing Boom: Dude, It’s So Over [New York Observer]
Q4 Brooklyn Reports Show Bloodletting, Except Brownstones [Curbed]
Brooklyn housing market still suffering [Crains]
Brooklyn apartment sales prices fall 7.5 pct -report [Reuters]
Brooklyn Real Estate Begins to Collapse, Too [Gothamist]
Brooklyn apartment sales prices fall 7.5 pct -report [Forbes]
Brooklyn Real-estate Market Reports: More Sobering News [New York Mag]
Elliman: Condos Down, Co-ops Flat, Brownstones Up in 4Q [Brownstoner]
Brownstone Brooklyn prices unscathed in fourth quarter [The Real Deal]
Brooklyn Housing Market Hit [WNYC]
Experts: Real-estate boom about to go bust [The Brooklyn Paper]


4Q 08 Brooklyn Market recap [WNYC Radio]
Brooklyn Housing Market in 4q 2008 [Bloomberg Radio]

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[Quadrillions In Indebtedness] 4Q 2008 Manhattan Market Overview Available For Download

January 8, 2009 | 2:25 am | | Public |

The 4Q 2008 Manhattan Market Overview that I author for Prudential Douglas Elliman was released on Tuesday.

Other reports we prepare can be found here.

The 4Q 2008 [data]( and a series of updated [charts]( are also available.

All in all, well over 100 media hits covering the report (that we know about, but who’s counting) without a formal press release. Apparently there is interest in the Manhattan housing market.

An excerpt

…At the close of the prior quarter, there was significant turmoil in the financial markets and unprecedented intervention by federal government agencies. The bailout of Fannie Mae, Freddie Mac and insurance giant AIG, the investor run on the money market Reserve Primary Fund and the bankruptcy of Lehman Brothers, marked a significant change in the Manhattan housing market as well as the US housing market. The fourth quarter was characterized by a sharp decline in contract activity and a downward correction in contract price levels. Sales contract activity showed evidence of a decline in activity of 40% to 75% compared to the same period last year. Contract price levels showed an average decline of 20% from August 2008. As a result of the 45-60 day lag between contract and closing date, a decline is anticipated in both the number of sales and closing price levels in the first quarter of 2009…

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting way to look at how this information is interpreted and presented.

The media coverage of the report was provided here as they were released (in no particular order). The headlines selected below provide an interesting media perspective of the report contents since every outlet was working off the same information. I didn’t include all the wire stories from AP, Bloomberg or Reuters.



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[In The Media] The Real Deal State of the Manhattan Market 10-3-08

October 7, 2008 | 11:18 pm | | Public |

The Real Deal Magazine interviewed me on the results of the 3Q 2008 Manhattan Market Overview we released on Friday. (Ok, enough’s enough – this is the last video clip I’ll post here from last week’s report.)

Jen Benepe got my take on the residential market and Ken McCarthy of C&W on the commercial market. The full Real Deal crew was there – a full crowd at a busy lunch time – Bryant Park is simply beautiful – it was really hard to leave – love the park (and most importantly, they have free Wi-Fi).

Here’s the clip


[On Stage] The Real Deal Takes Lincoln Center

September 10, 2008 | 11:00 am | |

The 4th New Development Forum held by The Real Deal magazine, led by publisher Amir Korangy packed the house yet again, the second consecutive year the event was hosted at this venue.

Larry Silverstein, the storied developer and owner of the World Trade site, shared insight and his vision for the downtown market. After all, tomorrow is 9/11.

I was initially concerned because most of the panelists have commercial rather than residential real estate backgrounds. But they spoke in the context of both and it was very informative. I did miss Mark Zandi, founder of whom I greatly admire for his analytical insights, who had to cancel at the last minute.

Stream of consciousness:

  • Amir, you are unable to think small. Congratulations once again for pulling off another one.
  • Stuart – I met your parents – don’t worry, I put in a good word.
  • Lauren – keep the web site going, but still call.
  • Brian – You’ve got the richest voice in business news television and can moderate with the best of them.
  • Cathy – the plum color worked – thanks for keeping me in my place.
  • Lock & Josh – Offering a great vehicle for listing advertising, better yet, Josh with a tie on (if Lock wore one = end of the world).
  • 30 second advertisement onstage before the event showed Bruce at C&W and me 120 times (at last count) on the big screen.
  • The best Real Deal bag yet – to replace last year’s model.
  • Happy that the audience was very supportive of the opening sponsors.
  • 3,000 attendees suggests real estate is not dead in New York, no?
  • I ran into my attorney at the show.
  • Larry taught us all the importance of cycles and taking the long view – and we knew he was right.
  • Larry thinks that luxury development prices, on an average sales price basis, will be higher next year than this year.
  • Bob emphasized segmentation and shared a 1% cap rate story. He knows his craft.
  • Steven was particularly articulate, being the first to be open about looming problems and answering my question about the new development pipeline.
  • Charles recently learned how to calculated IRR but probably has a higher IRR than hedge funds that live and die by formulas like cap rates.
  • Barbara continues to radiate – her marketing contrarianism can intrigue.
  • Don is looking at a $13M penthouse and was by far the most bullish on Manhattan – it’ll be back in a year?
  • Michael Shvo was at the event – he was the main draw card at the 2nd forum held at Cooper Square two years ago. That one sold out too.
  • Ran into a former dotcom era real estate development guy who lost millions (of other peoples money) but is doing very well now.
  • Paul, with beard, is itching to be a major player again in the brokerage business.
  • After asking my question to the panel, 2 people in line behind me told me I asked their question.
  • It is apparent that the audience has come to terms with the new market reality.
  • Don’t hold your breath, real estate is still first in the New York conversation.

And that’s the real deal.

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[The Real Deal Magazine] Will Own Lincoln Center

September 7, 2008 | 8:53 pm | | Public |

The Real Deal magazine’s New Development Forum at Lincoln Center was sold out at the 3,000 capacity venue last year. For lack of a better description, it was fun.

So this year, I was more than happy to help spread the word (all 3 seconds worth). The ad is running hourly on CNBC on Time Warner Cable and on NY1.

Since Publisher Amir Korangy knows how to pack content into his magazine, there’s no doubt he’ll pack ’em into Lincoln Center for another sell out. He lined up a group of interesting guests and with the housing and credit markets in turmoil, this event will prove especially informative.

To buy tickets

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[No Sleep Till Brooklyn] 2Q 2008 Brooklyn Market Overview Available For Download

July 11, 2008 | 12:52 am | | Reports |

The 2Q 2008 Brooklyn Market Overview that I author for Prudential Douglas Elliman was just released.

It is the first comprehensive report of the entire borough, which is sort of surprising to me. Look for lots of additional data and charts on the market in the coming weeks. No sleep till Brooklyn!

Other reports we prepare can be found here.

A year’s worth of historical aggregate [data]( (will have 5 years online in the coming weeks) and a series of [charts]( will also be available soon.

An excerpt

…The median sales price of a residential property in Brooklyn slipped 1.9% to $525,000 from $535,000 in the prior year quarter. Average sales price increased overall due to the influence of new condo development activity on overall prices. The average sales price of a Brooklyn property was $588,441 this quarter, 2.4% higher than the prior year quarter average sales price of $574,454. Condo prices, on a price per square foot basis, were up 16.4% to $575 from $494 in the prior year quarter. There is broad disparity between new development and re-sale condo prices. The price per square foot of a condo in a new development was $649 per square foot, up 27.5% from the $509 price per square foot of the prior year quarter. Over the same period, re-sale condos averaged $496 per square foot, up 7.4% from the $462 price per square foot of the prior year quarter…

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting way to look at how this information is interpreted and presented.

The media coverage of the report will be provided here as they are released over the week (in no particular order).

Brooklyn home sales skid 44%; prices slip [New York Daily News]
Brooklyn Home Sales Drop 44% as Banks Tighten Lending [Bloomberg]
Brooklyn’s home sales and prices cooling [Crains New York]
Williamsburg, Greenpoint Home Prices Jump As Borough-Wide Sales Slump [NY Observer]
New Condos Saving Brooklyn Housing Market [NY Sun]
Brooklyn sales volume sees sharp drop [The Real Deal]
Second Quarter Brooklyn Market Report: Sales Nosedive! [Curbed]
Miller Samuel Report: Sales Down; Bstone, Burg Prices Up [Brownstoner]

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[In The Media] The Real Deal Interview For 7-7-2008

July 7, 2008 | 11:53 am | | Public |

To view clip

Always a pleasure. At least I put away my books.


[Party Like Its 2009] 2Q 2008 Manhattan Market Overview Available For Download

July 2, 2008 | 11:58 am | | Public |

The 2Q 2008 Manhattan Market Overview that I author for Prudential Douglas Elliman was released today. Other reports we prepare can be found here.

The [data]( and a series of [charts]( are also available

An excerpt

…Like the prior quarter, fewer sales occurred compared to the prior year quarter, but more than the corresponding quarter two years prior. There were 3,081 co-op and condo sales collected at the close of the quarter, down 21.8% from the prior year quarter. The decline in activity was evenly spread across coop and condo property types with the lower level of demand related to tighter credit and a weaker economy. With tighter credit conditions for market participants existing today as compared to last year, it is reasonable to expect a lower level of activity relative to 2007 for the remainder of 2008. In fact, there were more co-op and condo sales in 2007 than in any other year over the past 20 years…

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting way to look at how this information is interpreted and presented.

The media coverage of the report will be provided here as they are released over the week (in no particular order).

Manhattan Second-Quarter Apartment Sales Fall by 22% (Update1) [Bloomberg]
Manhattan apartment prices zoom but more on market [Reuters]
Wall Street’s ills weaken Manhattan apartment sales [NY Daily News]
Curbed Roundtable: July State O’ the Market Report [Curbed]
Manhattan housing prices edge up, but sales slow [The Real Deal]
The High-End End? [New York Observer]
Manhattan apartment sales drop, but prices climb [Associated Press/Businessweek]
Manhattan housing market slows [Crains New York Business]
Manhattan real estate starts to soften [CNN/Money]
Apartment Sales Remain Vigorous in Manhattan [New York Times]
City Housing Slump May Hit In 2009 [New York Sun]
Sales still falling in Manhattan [Inman News]

[July 2, 2008] [Bloomberg TV](

[July 2, 2008] [NY1 TV](


[Transition Report] 1Q 2008 Manhattan Market Overview Available For Download

April 2, 2008 | 12:02 am | | Public |

The 1Q 2008 Manhattan Market Overview that I author for Prudential Douglas Elliman was released today. Other reports we prepare can be found here.

The [data]( and a series of [charts]( will be uploaded today as well.

An excerpt

…The elevated pace of sales from the past 5 quarters cools as the volatility in the financial markets begins to touch Manhattan. Based on activity in the first quarter it is likely that the record number of sales in 2007 will not be repeated in 2008. Sales in the current quarter declined to levels seen two years ago. The reduction of available credit, less favorable mortgage terms, the national economy moving towards a recession and the specter of additional layoffs in the financial services sector over the next two years has begun to restrain the demand for Manhattan residential real estate. Still, the regional economy is performing well, tourism and hotel occupancy rates are at or near record levels and the New York City government is financially well positioned for the next two years. The US dollar has set new lows against several currencies, which continues to bring new sources of demand, with specific emphasis on condo new development projects….

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting experience.

The media coverage of the report will be provided here as they are released over the week.

Manhattan Apartment Prices Hit Record High Despite Slump [NYT]
Housing Slump — in New York ? [WSJ]
Manhattan Condo, Co-op Sales Decline Most in 18 Years (Update2) [Bloomberg]
Trouble in the sky-rise? [The Economist]
Co-op, condo sales dive in Manhattan [NY Daily News]
Manhattan apartment prices increase [The Real Deal]
Manhattan Home Sales Slow, Prices Rise [AP]
Manhattan apartment prices rise but sales fall [Reuters]
First Quarter Reports: Real Estate Cooling [New York Sun]
Average Manhattan home hits record $1.6 million [CNN/Money]
Manhattan apartments: prices up, sales down [Crain’s]
First Quarter Market Reports: Prices Up, Sales Down [Curbed]
Condos Ascendant! But What Price Victory? [New York Observer]
Manhattan Apartments Remain Pricey, Slowdown Ahead [Gothamist]
NYC home sales drop [Times Leader (PA)]
Housing Market Tracker – It’s About Affordability, Stupid.[Seeking Alpha]
Manhattan Home Sales Slow, Prices Rise [Huffington Post]
Manhattan apartment sales drop off in 1st quarter, but prices still climb due to luxury sales [MN Star Tribune]
Real estate data show market cooling [Metro.US]
Property in Manhattan at an 18 year Low [Investment Markets]
What Slump? Manhattan Housing Prices Hit Record High [NY1]

Radio and TV clips

[April 2, 2008] [CNN en Espanol](
[April 2, 2008] [Bloomberg TV](BLOOM_04-02-2008_05.24.29.wmv)
[April 2, 2008] [NY 1](NY1_04-02-2008_07.14.06.wmv)
April 2, 2008] [Bloomberg Radio](

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[Miller Samuel Love] Miller Samuel And Radar Logic Part Ways For Now

March 7, 2008 | 5:54 pm | | Public |

Last September I announced in my “Radar Love” post that our Miller Samuel firm was being acquired by Radar Logic. It was an exciting time for my family, my company and of course, me.

I was so confident in the deal being completed by year end that I agreed to assume the role of Executive Vice President and Director of Research before the deal closed. I created the RPX Monthly Housing Market Report, provided my expertise, spoke on behalf of the company on real estate matters and made presentations at conferences.

The end of the year came and went.

I have decided it was best for Miller Samuel to move on.

Our parting with Radar Logic is amicable and I wish them great success. The firm is comprised of brilliant, innovative, hard-working people and I am glad that I had the experience of working with them.

It is a tumultuous time for residential real estate. It is a watershed moment for the appraisal industry, the economy is moving towards recession, the credit markets are in disarray, foreclosures are rising, there is a presidential election that promises much change and most importantly, the iPhone is going to get a lot of cool applications.

In other words, the real estate market actually needs neutral valuation experts more than ever.

Miller Samuel will continue to be an appraisal and consulting firm that many consider the best in the business. We will explore new opportunities, continue to prepare and expand our series of market reports on the New York region and provide housing commentary in a local, national and international context.

More to come and thanks for listening.

Ok, back to work.

Jonathan Miller
Miller Samuel Inc.
Real Estate Appraisers & Consultants

UPDATE (Mar 07, 2008 7:00PM ET): Press release placed on MarketWire by Radar Logic.

UPDATE 2: News coverage:
Miller Samuel, Radar Logic Break Off Engagement [New York Observer]
Miller Samuel backed out of merger with Radar Logic [Crains New York]
Miller Samuel parts ways with Radar Logic [Inman News]
Miller Samuel backed out of merger with Radar Logic [The Real Deal]


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