Actually Pronouncing Specific Challenges In The Housing Market Can Be Hard To Do

August 5, 2022

Say “WUPPERTALER SCHWEBEBAHN” three times very fast to get you in the mood for the following issue of Housing Notes.

This photo was taken in 1913 and the railway is still in use.


[Wikipedia]

This is tangible proof that we can solve problems if we actually try, even if we can’t say “WUPPERTALER SCHWEBEBAHN” very well.

The Final Shout Out To My Columbia Grad Students

My final class of the summer semester was held yesterday Columbia University campus this week, and my ±150 students learned an important lesson!

Best wishes to all – you’re participating in the terrific MRED program and I wish all of you success in your journey.

But I digress…

Despite The Slowdown In NYC Metro Sales Volume, New Listings Are Falling

I’ve been the author of an expanding series of market reports for Douglas Elliman since 1994. These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.

What is clear now is that the new signed contract volume peaked in March and has been falling ever since. However, what is NOT widely understood is that new listing (not cumulative) inventory peaked at about the same time and has also been falling ever since:

Elliman Report: July 2022 New York New Signed Contracts

Here are a set of Manhattan charts derived from report data – the other markets can be found in our chart gallery.

No Matter How Hard The Fed Pushes, Rates Drift Lower, Now Below 5%

Mortgage rates fall below levels seen in mid-April. Per Sam Khater, Freddie Mac’s chief economist:

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” said Sam Khater, Freddie Mac’s Chief Economist. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”

The Wall Street Journal had a good take on the falling rate phenomenon: Mortgage Rates Drop Below 5% for First Time Since April

MBA: Mortgage Payment To Rent Ratio – Both Jumped

I’m unsure about the value of tracking these metrics together since the two indicators seem to move in lockstep – perhaps that’s the point? The spread between the two is probably defined by the tax breaks for homeownership to equalize costs.

While Florida Sales Volume Is Easing, New Listings Are Falling Too

These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.

What is clear now is that the new signed contract volume peaked in March and has been falling ever since. However, as I mentioned earlier and NOT widely understood that new listing (not cumulative) inventory peaked at about the same time and has also been falling ever since:

Elliman Report: July 2022 Florida New Signed Contracts

Here are a set of Miami-Dade charts derived from report data – the other markets can be found in our chart gallery.

The West Coast Seems To Be The Most Home Equity Rich

Statista has a great chart using ATTOM data via Bloomberg that illustrates how much home prices surged in the west and Florida to the point where homeowners have unusually high equity. One can argue that in many of these locations, especially Florida where housing economies have been restructured by remote work.

Rick Sharga, executive vice president of market intelligence at Attom, said in a statement: “After 124 consecutive months of home price increases, it’s no surprise that the percentage of equity rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the lowest. While home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022.”

Although Southern California Sales Are Falling, So Are New Listings

These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.

What is clear now is that the new signed contract volume peaked in the spring and new inventory has been falling:

Elliman Report: July 2022 California New Signed Contracts

Here are a set of LA charts derived from report data – the other markets can be found in our chart gallery.

Home Showings Declined From Record-Highs

ShowingTime, that little button inserted in seemingly every MLS system, is another useful way to track market momentum. Their regional reports can be found here. I’ve always had a fondness for new unique and credible ways to track housing, even more so because I got to keynote their first conference!

Getting Graphic

My favorite charts of the week of our own making

My favorite charts of the week made by others

Appraiserville

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

TAF Spent $1.4M Of Appraiser’s Hard-earned Money On Lobbying Fees!

To set the stage of the complete disdain for the appraisal industry and the public trust…

In the 2019 TAF 990 Filing, and based on the assumption their compensation has increased in the last three years, The two leaders of TAF Dave & Kelly, run a 12 employee entity and make a staggering ±$750,000 annually. No wonder they don’t want to accept grant money to enable oversight in a not-for-profit!

But it gets worse….

TAF spent $1.4 million dollars lobbying over the past four years using the revenue they take in from appraisers in what amounts to a bureaucratic money making institution that is supposed to be a not-for-profit.

What are they lobbying for? I can only assume it is to keep the status quo. I urge TAF to share with the world what they are spending all that money on. Perhaps I’ll get another chickenshit letter that I can frame in my office. Remember this is the leadership that thought sending this bat-shit crazy letter was a good idea.

Hat tip to commenter “Baggins” on my Appraiser Blogs post “TAF Charging for Misleading Classes” for sharing the links to the 990!

AI’s Sham Petition Process Wins The Second Time In Three Years, So JA Stays In Power Forever

I don’t know how good of an appraiser he was, but AI CEO Jim Amorin’s latest flavor of the sham petition process worked, proving he is a master of institutional takeovers. All the FOJs that feed at the trough must be thrilled. Paula Konikoff was announced as the winner. If you remember, she was the national nominating committee’s selection, likely because one of the regions was not included in the vote. Crazy, right?

I hear she is a very good commercial appraiser and authored a book on Arbitration that AI is marketing for her, but as an FOJ, has a significant lack of enthusiasm for residential appraisers as I’ve discussed before.

In other words, because there are no apparent public efforts to pull in more residential appraisers, AI will continue to ignore them as part of the institutional zeitgeist. Just think about the residential committee formed in 2017 by JA to offset the ire he caused from taking all local chapter funds. JA loaded the panel with several residential people I respect and several I think are poison for the residential appraiser profession; the committee did nothing tangible, reported nothing, and communicated nothing to the membership and the public. It was simply a stunt to quell the membership outrage at the time.

AI’s treatment of designations is embedded with an inflationary effort that continues to devalue the SRA to the point where it means nearly nothing to anyone outside of AI. Of course, through inaction, the MAI brand is already deteriorating.

OFT (One Final Thought)

Karen Chesleigh, a friend of mine for twenty years, a senior executive at Douglas Elliman, and the wife of one of our appraisers passed unexpectedly this week. The Go Fund Me page A Legacy of Love: Honoring Karen Chesleigh whose title always makes me tear up, says it all. It has been wonderful to see the outpouring of support. Please visit:

Brilliant Idea #1

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– They’ll be pronounceable;
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– And I’ll make more pronounced decisions.

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 following 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

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