At Some Point, Housing Will Be Brought Back From The Edge
Here is a remarkable story of someone being brought back from the edge. I loved this so much that I’ve listened to it multiple times – what a story!!!
But I digress…
The NYC Rental Market Sets A “Record Number Of Records”
I’ve been the author of an expanding series of market studies for Douglas Elliman Real Estate since 1994. This week Douglas Elliman released our July research on the New York City rental market, which was loaded with new records.
Bloomberg captures the moment in a chart (remember that “charts=life”).
To give you a sense of the intense interest in this story, here is a partial list of coverage on the report results.
Elliman Report: July 2022 Manhattan, Brooklyn & Queens Rentals
MANHATTAN RENTAL MARKET HIGHLIGHTS
“Net effective average rent exceeded $5,000, and net effective median rent exceeded $4,000 respectively for the first time.”
- Median rent reached a new high for the sixth straight month as average rent rose to a new record for the third
- New leases expanded month over month for the fifth straight time
- The market share for two-year leases reached its highest level since last November
- Doorman’s median rent reached a new high for the seven consecutive month
- Non-doorman median rent rose to a new record for the fourth consecutive month
- Luxury net effective median rent increased year over year for the fifteenth consecutive month
- Luxury net effective median rent surged year over year to the second-highest on record
- The market share of bidding wars accounted for one out of four new luxury leases
BROOKLYN RENTAL MARKET HIGHLIGHTS
“Net effective median rent reached a new high for the third consecutive month.”
- Net effective median rent reached a new record for the third consecutive month
- Landlord concession market share fell to its lowest level in five and a half years
- Bidding war market share occurred in nearly one out of four leases for the fourth straight month
QUEENS RENTAL MARKET HIGHLIGHTS
“Net effective median rent reached a new high for the second time in four months.”
- Both average and median rent, as well as net effective average and net effective median rent, set new records
- The market share of landlord concessions fell to its lowest level in seven years
- New development market share of leasing activity fell to its lowest level in seventeen months
A Spectacular Explanation Of The State Of Real Estate Tech Space
This is mandatory viewing for my Housing Notes readers, even more so than this. Mike DelPrete burst upon the scene a few years ago as a provider of clarity in the crowded real estate tech space. Admittedly my first impression a while back was that he was shilling for tech titans like Opendoor, but I was very wrong about that.
Seriously, please watch the entire clip for the proper context on the topic of real estate tech.
The Comparison Story Of Manhattan’s Faster Recovery Than San Francisco Went Viral
There was a San Francisco Chronicle article that went viral on Twitter yesterday: New York is roaring back from the worst of the pandemic. Why isn’t San Francisco?
I shared some of our research results for the piece, and some of the charts were amazing, especially this one. Wow – Manhattan!!!
And these commercial market comparison charts…
With our expanding west coast emphasis, this article compelled me to finally subscribe to the San Francisco Chronicle.
Long Island Prices Continued To Rise Despite Fewer Sales
Newsday, the Long Island flagship newspaper, looked at the lack of listing inventory and how it seems to provide a firm underpinning for market pricing. Even more importantly, I get a picture of me with a brilliant quote in addition to a chart in their Long Island home prices aren’t dropping as the real estate market slows. Here’s why.
Fewer sales helped the supply of available homes grow but also showed the extreme depth of the Island’s shortfall, which has contributed to appreciation of home prices. The number of single-family houses and condos for sale increased to 6,407 by the end of June, according to data from real estate brokerage Douglas Elliman and appraisal firm Miller Samuel. That inventory figure was up nearly 48% compared with the end of March, more than three times the usual seasonal increase of 14% in the past decade. Still, it was the fourth-lowest it has been at the end of a quarter in the past 20 years.
Bloomberg Radio – LA Housing Prices Remain Elevated Despite Drop In Sales
Here’s a little drive-time radio clip covering the results of our Douglas Elliman New Signed Contract Report for the three most southern oceanfront counties in California.
HOUZZ – Much More Renovation Spending in 2021 & 2022
Since this is a relatively new entity and only has about four years of data, I focused on how renovation patterns broke out this year:
Bankruptcies Have Collapsed This Year
This is a bit random, but I found this astonishing.
Was playing around with Google Trends data and was surprised by this huge level shift…remember before COVID when Bankruptcy was a thing? pic.twitter.com/dxcrdTavQh— Fernando Vidal (@fernavid) March 24, 2022
S&P Global Market Intelligence: No uptick in US bankruptcy filings this year pic.twitter.com/BsCm2NAAst— Brian Cheung (@bcheungz) August 4, 2022
And the snarkiness of FT Alphaville’s response post to (the guy I used to share a dentist with) Jim Cramer’s demand for an apology was also deliciously, awesomely astonishing. Click on the tweet to see the amazing FT response.
My favorite charts of the week of our own making
My favorite charts of the week made by others
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
USPAP Extended To December 2023 But TAF Is Unable To Explain Why Appraisers Are Still Forced To Take The USPAP Update Course
The Appraisal Foundation, the organization that brought you the bat-shit crazy letter and the chickenshit letter announced that they were extending USPAP but no credible reason was given just like there is no credible reason why USPAP needs to be updated every two years.
In many ways, the following made-up delay has already set a four-year precedent that TAF doesn’t need to update USPAP every two years because the glacial-changing appraisal industry doesn’t need it, and in fact, the rapid frequency of change TAF has demanded has damaged the public trust, hurt the industry and wasted appraisers’ hard-earned money.
“After careful consideration, the Appraisal Standards Board has voted to extend the current edition of USPAP through December 31, 2023,” said ASB Chair Michelle Czekalski Bradley. “The ASB launched a comprehensive review of the ETHICS RULE in February and just released the resulting Third Exposure Draft in July. As USPAP matures, revisions such as this will take more time to conduct the requisite research to ensure changes continue to uphold the public trust. I am proud of the work we have done, in conjunction with the preeminent fair housing law firm Relman Colfax, to develop the proposed changes to the ETHICS RULE in the Third Exposure Draft, and the Board looks forward to receiving public comment on this proposed change.”
First of all, I’d like to point out that TAF continues to insist on inserting the word “preeminent” in front of the law firm name Relman Colfax whom they have engaged to navigate fair housing issues. For clarification purposes, in these writings, I hereby dub this law firm Preeminent, Relman & Colfax. Prior to developing the fair housing module, and even after TAF was told by fair housing experts in a formal report how inaccurate the course was and could place appraisers in legal jeopardy, TAF had not relied on legal counsel for nearly all USPAP changes for decades. At least TAF now has this preeminant firm as advisors on fair housing issues. That’s probably a win for appraisers.
I wonder whether there will be a new 7-hour course very soon since the current course was deemed flawed by fair housing experts, and there is no new USPAP to update. I’ll answer my own question: Nope, they need to keep the USPAP 7-hour course going so TAF can continue to grift appraisers to maintain TAF’s financial independence despite what Congress intended when it was set up. Ask yourself why TAF needs to maintain its financial independence and have no oversight. TAF found a loophole by avoiding Congress’s grant process, creating oversight. This is not-for-profit with many, many millions in the bank and literally has no oversight. What could go wrong? You’re seeing it unfold in real-time right now.
Since TAF has told us the ethics rule is flawed, why would they wait another year to give us a revised ethics rule? And good grief, “ASB launched a comprehensive review of the ETHICS RULE in February and just released the resulting Third Exposure Draft in July.” Really? It has taken six months to review the ethics rule, and now they will have an additional eighteen months before anything changes in public view. So much for having any concern about the “public trust.”
And while they are at it, that flawed “misleading” definition will have placed appraisers in legal jeopardy for four years. It would take 5 minutes to fix. This isn’t rocket science.
And my last comment on this topic addresses the additional BS from ASB within this announcement that it would take too long to produce the book by the end of the year. Really? Change publishers.
Translation: We concede our ethics rule is inherently flawed but because our book publisher for USPAP will not be able to publish by the end of the year, we’ve decided to leave the admittedly flawed ethics rule to sit in the public domain for another year. Hey TAF and ASB: No one believes your BS anymore.
Don’t get me wrong here. Pushing out USPAP to the end of 2023 is an excellent idea if other modifications were fixed in the interim, like the ethics rule and the definition of misleading. But my issue with TAF is that they are misleading the appraisers and the public about why they are delaying USPAP. The reality is that USPAP could be pushed out five more years, and it wouldn’t impact the profession and the public trust. The rapid frequency of USPAP changes and their amateur review and update process is precisely what is causing damage to the appraisal profession and the public trust.
Appraiser, Astronomer & Spreadsheet Guru Don Machholz Passed From Covid Complications
I didn’t know Don, but from the outpouring of support, especially from the REAA, he must have been quite a person. From his Go Fund Me page:
The family of Don Machholz aka The Comet Hunter, needs your help. Don was born in Portsmouth, Virginia in 1952 and passed away on August 9. 2022 at his home in Wikieup, AZ due to complications with Covid-19.
Please consider a donation to help his family.
OFT (One Final Thought)
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- How Remote Work is Shifting Population Growth Across the U.S. [Economic Innovation Group]
- At Last, Congestion Pricing Fee Previews [Curbed]
- Naftali Takes Hit in Battle With UWS Holdout [The Real Deal]
- Current State of the Housing Market [Calculated Risk]
- These Nantucket Cottages Are as Small as 350 Square Feet. They Sell for Millions. [Wall Street Journal]
- Chinese Student Visas to U.S. Tumble From Prepandemic Levels [Wall Street Journal]
- The Snowballing US Rental Crisis Is Sparing Nowhere and No One [Bloomberg]
- Prime London sales market gains momentum as overseas travel returns [Knight Frank]
- Supply Chain Disruption [Counselors of Real Estate]
- The Tech That Tries to Tackle NIMBYs [Bloomberg]
- Builders Are Stuck With Too Many Houses as US Buyers Pull Back [Bloomberg]
- Why the Rent Is So High [NY Times]
- Opinion | We Will All End Up Paying for Someone Else’s Beach House [NY Times]
- Once Asking $63.75 Million, a Billionaires’ Row Condo Sells for 30% Less [Wall Street Journal]
- Housing Inventory Growth Has Slowed in Recent Weeks [Calculated Risk]
- New York by the Numbers: Monthly Economic and Fiscal Outlook No. 68 – August 8th, 2022 [Comptroller.nyc.gov]
- 2022 U.S. Houzz & Home Study: Renovation Trends [Houzz]
- Consumers’ US Inflation Expectations Drop Across All Time Horizons [Bloomberg]
- VC Billionaire Marc Andreessen and Ultra-Wealthy Neighbors Thwart Housing in California Town [Bloomberg]
My New Content, Research and Mentions
- Rate hikes and recession are still in the cards [KaKe News]
- Rate hikes and recession are still in the cards [ABC17NEWS]
- Southern California Home Prices Remain High [Bloomberg]
- Manhattan rents hit record high for 6th straight month [Morning Brew]
- Manhattan Rents Hit New Record High As Peak Season Could Lead To Cooling In Fall [ZeroHedge]
- Manhattan rents hit record high for the sixth month in a row [KRDO]
- Rate hikes and recession are still in the cards [CNN]
- What it takes to buy and renovate a fixer-upper house [Newsday]
- Los alquileres de Manhattan saltan a un récord en julio en la temporada más activa [La Republica]
- Manhattan rents hit record high for the sixth month in a row [CBS News]
- It’s Official—the Average Rent in Manhattan is $5,000 a Month, a New Record [The Daily Beast]
- Manhattan Rents Broke Another Record [Curbed]
- Manhattan’s average monthly rent tops $5,000 again [Yahoo Money]
- Dominicans in NY keep the cry to the sky over high rents [Dominican Today]
- The average rent for a Manhattan apartment keeps climbing above $5,000. What happens when demand falls? [Brick Underground]
- NYC rent hits a new record, no break for New Yorkers in sight [NY Post]
- In Brooklyn, a European-Inspired Penthouse With Panoramic Views of New York Lists for $8.5 Million [Wall Street Journal]
- In Brooklyn, a European-Inspired Penthouse With Panoramic Views of New York Lists for $8.5 Million [Mansion Global]
- NYC Apartment Rents Break Records Again As Housing Crisis Deepens [Bisnow]
- Long Island home prices aren't dropping as the real estate market slows. Here's why. [Newsday]
- New York City Rents Smash Record for Sixth Straight Month [The Real Deal]
- New York is roaring back from the worst of the pandemic. Why isn’t San Francisco? [San Francisco Chronicle]
- Manhattan Rents Jump to a Record as Hot Market Hits Peak Season [Bloomberg]
- Manhattan rents hit record high for the sixth month in a row [CNN]
- Luxury Hamptons Brokerage Hedgerow Faces Its Toughest Test Yet [The Real Deal]
- An Oceanfront Compound on Southampton’s Gin Lane Relists for $150 Million [Wall Street Journal]
- An Oceanfront Compound on Southampton’s Gin Lane Relists for $150 Million [Mansion Global]
- Rent Increase: These Cities Had the Biggest Rent Hikes in the US [CNET]
- Beach house in Malibu’s Colony neighborhood lists at $34.5M [The Real Deal]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 7-2022 [Miller Samuel]
- Elliman Report: California New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: San Diego County Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Orange County Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Malibu + Malibu Beach Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Los Angeles Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Long Island Sales 2Q 2022 [Miller Samuel]
Appraisal Related Reads
- Advice for buyers & sellers in today’s housing market [Ryan Lundquist/Sacramento Appraisal Blog]
- THE CON: The American Dream Dies Where Power Lies [Bill Moyers]
- Creating Diversity in the Appraisal Profession: RICS Aims to Ensure Diversity Strategies for the Long-Term [Real Estate Weekly]
- Trump real estate appraiser hands over thousands of documents to N.Y. AG in civil probe [NBC News]
Extra Curricular Reads
- General Mills' classic Monster Cereals are back with a reimagined look [NPR]
- Pink Floyd Guitarist David Gilmour and Writer Polly Samson Set to List U.K. Mansion for £15 Million [Mansion Global]
- Great American Road Trips Are Impossible for Most Electric Cars [Bloomberg]
- The Hacking of Starlink Terminals Has Begun [Wired]
- Can a Neighborhood Be Instagrammed to Death? [NY Times]
- VR Still Stinks Because It Doesn’t Smell [Wired]
- How a Phoenix record store owner set the audiophile world on fire [Washington Post]