The Housing Market Just Shipped Its Pants
Apparently, you can ship your pants for free…
If this clip sounds familiar, it’s because I used it more than six years ago here. I love staccato bursts of dry humor, and seeing it again on Instagram meant I had to use it again. Apparently there is no policy at Housing Notes that prevents me from reusing clips.
But I digress…
Manhattan Sales Over $50 Million Are Only Two Away From Tying The Record
While it’s an end-of-the-year thing, and I’ve long thrashed the relevance of super luxury sales, referring to them as a “circus-sideshow” for years, generally irrelevant to the local housing market, it’s fun to recap the year. Bloomberg just released a top 10 Manhattan list. And I found a dozen sales at or above the $50 million threshold. There are still two weeks to go; as of today, 2022 is the third-highest number of sales over $50 million. Only two more sales are needed to match the 14 unit records set in 2014 and 2019, and it’s plausible that the record will be broken in the next two weeks.
What started in 2014 as a once-in-a-blue-moon spreadsheet effort became a regular task as these sales continued to occur and the data is sloppy. This new market segment was created nearly a decade ago as the value of these super luxury market units was reset by the geo-political changes at the time.
Considering the sales dollars for each year, 2019 is the clear leader with over $1 billion in total. If we look at the average price per unit (no chart for this yet), 2021 was the winner at $80,752,100 per transaction.
And this is only Manhattan!
The Demand For Remote Jobs Far Exceeds Demand For Office Jobs
This LinkedIn take is fascinating and suggests that remote work is here to stay and isn’t a passing fad.
LinkedIn CEO Ryan Roslansky— Brian Brackeen (@BrianBrackeen) December 12, 2022
"Pre-pandemic,~1% of all jobs posted on LinkedIn were remote. As of today, that number is ~14%…but that's not the fascinating part. What's fascinating is north of 50% of all job applications on a daily basis on LinkedIn go to that 14% of remote jobs"
As Governor Hochul of New York State noted on Wednesday with the release of the “Making New York Work for Everyone” that the recovery has peaked and things like office occupancy and subway ridership are no longer expanding.
The sooner cities adjust to the realities of remote work, the better. Here’s the plan. I recommend reading it to anyone in New York City real estate. While it sounds encouraging, as it is designed to be, it’s important to remember that the prior administration struggled for eight years to reach 200,000 units. Fingers crossed.
Here are the macro goals.
1) Reimagine New York’s Commercial Districts as Vibrant 24/7 Destinations
2) Make It Easier for New Yorkers to Get to Work
3) Generate Inclusive, Future-Focused Growth
Inflation Expectations Are Deflating…Slowly
With lower inflation rates usually comes lower borrowing costs and higher home sales, something market participants hope comes soon. The fed raised rates 50 basis points, a step below the last four 75 basis point increases; even though the fed suggests more rates to come in 2023, the heavy lifting has been accomplished. The forecast seems to be 75 basis points more but spread over two to three announcements in 2023.
Here’s a recap of Wednesday’s release. The next announcement will come on February 1.
Fed Raises Rates at a Slower Pace: Live Updates [NYT]
I collected a slew of charts leading up to this moment.
Through 35 months, the 2020s decade has seen 15.52% inflation.— Lance Lambert (@NewsLambert) December 15, 2022
The entire 2010s decade saw 18.75%. pic.twitter.com/grvZjPTXpn
My USAToday Housing Market Prediction For 2023
This week I was asked by USA Today to predict an aspect of next year’s housing market. I focused on the lack of listing inventory since that’s a factor that has been noticeably absent from prior market downturns.
I shared this piece with a bunch of my colleagues, and the majority of the feedback centered on how good my headshot was. Sigh.
Housing market predictions: Six experts weigh in on the real estate outlook in 2023 [USAToday]
Here is a sampling of annual listing inventory tracked by year we’ve collected in LA and the NYC metro area.
This low listing inventory trend seems to be born out by Google Trends, no? Ha.
YoY change in "homes for sale" searches on Google Trends — @Redfin has cited this series, I've never looked at it myself, but looks like there might be something here: pic.twitter.com/fUaCCpKCXY— Conor Sen (@conorsen) December 9, 2022
NYC’s Roosevelt Island: Where Trash Sucks
After the US Postal System used a pneumatic system in NYC, Roosevelt Island got a pneumatic system for trash. I had no idea!
New Yorker: Weighing The Value Of Searching For Property Sales
My favorite housing market/economic charts of the week made by others
🌀Home Insurance Costs Rising in FL🌀— Nik Shah 🏡 (@NikhaarShah) December 14, 2022
Homeowners' insurance costs have risen 34.5% from 2016 to 2021, compared to 10.9% nationally. pic.twitter.com/4Hk4atH8Gm
Average U.S. gasoline prices are now the lowest since October 2021. pic.twitter.com/T3qK3Fh9Db— Lisa Abramowicz (@lisaabramowicz1) December 13, 2022
Chart here indicates that there's still around $1 trillion of the extraordinary stimulus "pig" still passing through the consumer "python"— Adam Taggart (@menlobear) December 14, 2022
Estimated to be exhausted by mid-2023 pic.twitter.com/C8NLVmglzF
My favorite random charts of the week made by others
[Source: The Economist (2021)]
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
ASC Hearing On Appraisal Bias January 24, 2023
All appraisers should get this hearing on their schedule and check back in later for the link. The registration link will be available soon.
OFT (One Final Thought)
I know the following is a bit morbid but still fascinating. What happens when a large plane falls into a high-density residential neighborhood? I think about that every time I land at LaGuardia. Here’s a short segment of the news coverage of the December 16, 1960 event, 62 years ago today, from the NYPR Archive Collection. I was just a few months old! Here’s a recent look at the site by Untapped Cities.
[Source: WNYC, Caption: The tail section of United Airlines airliner, which crashed in a heavily populated section of Brooklyn, New York, December 16, 1960, rests at the intersection of Sterling Place and 7th Avenue. ( AP Photo/stf )]
To avoid ending on a bad note, here’s the first recorded snowball fight (1897)!!!
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 ship their pants;
- You’ll ship your pants;
- And I’ll try to find a K-Mart.
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, CRE, Member of RAC
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller
Reads, Listens and Visuals I Enjoyed
- Here Are This Year’s 10 Most Expensive NYC Residential Sales [Bloomberg]
- The Long Island estate of John Philip Sousa lands a buyer [NY Post]
- Study: Miami Is America’s Most Competitive Rental Market [DS News]
- Mayor Adams Takes on the Housing Crisis | The Brian Lehrer Show [WNYC]
- Mayor Adams, Governor Hochul Release [NYC.gov]
- ‘Proud to be geeky and nerdy,’ BHS and Metaverse Institute partner [Inman]
- What Happened When the Bay Area Rejected Growth [Bloomberg]
- NYC’s Mercedes House Rental Apartments Sell for $100 Million [Bloomberg]
- TRD Pro: Historical Look at Manhattan Condo and Co-op Prices [The Real Deal]
- To combat illegal short-term rentals, NYC tries a new registration system for hosts. Here's how it works [Brick Underground]
- What are the latest trends in modular construction? [RICS]
- Airbnb cuts 4,000 hosts for violating nondiscrimination policy, including racial bias [Market Watch]
- Corcoran Ends Franchise Deal With Corcoran Global Living SoCal [The Real Deal]
- Bye, 2022. Here’s What to Expect in Investment Sales in 2023 [Commercial Observer]
- San Francisco Fed [Federal Reserve Board San Francisco]
- LA agents advise clients to sell homes as mansion tax looms [The Real Deal]
- How Did the Housing Market Get So Unaffordable for So Many? [Wall Street Journal]
- Co-Housing Startups Fly in the Face of Old-School NYC Housing Law [Bloomberg]
- Will a lawsuit over a Malibu mansion derail a top L.A. real estate broker? [LA Times]
My New Content, Research and Mentions
- Housing market predictions: Six experts weigh in on the real estate outlook in 2023 [USA Today]
- TRD Pro: 12 Years of Manhattan Condo and Co-op Sales Inventory [The Real Deal]
- Northwest Queens sees 2.4% monthly rental price increase from October to November: report [QNS.com]
- NYC’s Mercedes House Rental Apartments Sell for $100 Million [MSN]
- TRD Pro: Historical Look at Manhattan Rental Vacancy Rates [The Real Deal]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 11-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: California New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 10-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 10-2022 [Miller Samuel]
- Elliman Report: California New Signed Contracts 10-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 10-2022 [Miller Samuel]
Appraisal Related Reads
- 5 Ways Homeowners Can Save Money [Birmingham Appraisal Blog]
- How to Reduce Appraisal Revision Requests [Appraisal Today]
- Surprising Things That Can Decrease Property Value [Cleveland Appraisal Blog]
- Smartphone Measuring Technology [Dave Towne-Appraisers Blogs]
- How much have home prices gone down? [Sacramento Appraisal Blog]
Extra Curricular Reads
- Remnants of a 1960 Park Slope Plane Crash Hidden in Plain Sight in Brooklyn [Untapped New York]
- The Pneumatic Tube Mail System in New York City [Untapped New York]
- Brooklyn Plane Crash | WNYC | New York Public Radio, Podcasts, Live Streaming Radio, News [WNYC]
- ChatGPT: Smart, but Not Smart Enough [The New Stack]
- To save whales, should we stop eating lobster? [Mother Jones]
- Molly Ringwald on Starring in One of Jean-Luc Godard’s Most Unconventional Films [New Yorker]
- What bodybuilders do to their bodies — and brains [Washington Post]
- How “The Daily Show” Squandered the Opportunity That Was Trevor Noah [New Yorker]
- NYC Tree Map [NYC Parks]
- Unicorns Grew by Leaps and Bounds. Now They’re an Endangered Species. [Barrons]
- It’s Time to End Our ‘Rat Nutrition’ Program [Curbed]
- Major Fusion Energy Breakthrough to Be Announced by Scientists [NY Times]
- Disrupting Porta Potties—The New Must-Use Tourist Toilets [Forbes]
- Your Co-Investors in BREIT – The Big Picture [Ritholtz]