Windmill Thoughts On Housing Out Back
Take a deep breath, Thanksgiving was over a week ago. Time is moving very quickly these days. And to dig really deep for philosophical windmill insights here: “Don’t let the shadows ever trip you up.”
People are hilarious… pic.twitter.com/XOHCv4G1fR— Rex Chapman???????? (@RexChapman) November 28, 2020
I wanted to give my shoutout to my excellent Columbia Grad students who participated in this week’s Zoom lecture on the nuances of market analysis. It was our final class and I very much enjoyed engaging in critical thinking and problem solving with you.
As a refresher, here was today’s first slide:
But I digress…
PODCAST INTERVIEW: Brick Underground’s 2020 NYC Real Estate By The Numbers
I had a fun 40-minute interview with Emily Myers of Brick Underground that goes into the whole urban to suburban thing, the “V” recovery (vaccines and vacancy), existing for sale and rental market dynamics, and lots of other market tidbits. This was one of my favorite recent interviews. Here’s the transcript.
Here’s the accompanying article for the podcast interview.
Elliman Reports: Condo Contracts Are Making A Comeback
Douglas Elliman published our research for new contracts signed in November across a number of regions in New York Metro, South/Gulf Coast Florida, Southern California, and Aspen/Snowmass Village. They are the most recent edition to the growing Elliman Report series we’ve been the author of since 1994.
At the outset of the pandemic and accompanying lockdowns, outbound migration from the cities to the suburbs became a thing with single family new signed contracts surging year over year as condos were avoided. In the past few months, we are beginning to see condo new signed contracts across the burbs keeping pace or exceeding single family gains on a year over year basis.
This Bloomberg piece NYC Suburbs See Condo-Buying Boom as Houses Get Too Pricey lays it out clearly, as does the accompanying chart infused with magenta and bright blue colors.
Apparently, the ±350K Bloomberg Terminal subscribers agreed, making the piece the 6th most read across all their terminals worldwide.
New York Report
Elliman Report: November 2020 New York New Signed Contracts
New signed contracts for co-ops and condos continued to remain short of year-ago levels while townhouses surged ahead of the prior year. New inventory for all property types fell well below year-ago levels and have been trending lower since the summer on a month over month basis.
New signed contracts for all three property types were well ahead of the same period last year. New inventory for all property types also remained above year-ago levels.
Long Island (excluding H/NF)
New signed contract activity for both property types continued to remain above year-ago levels. Single family new signed contracts showed substantial growth in the tranches above $400,000. New inventory for single families slipped, with most of the declines occurring below the $400,000 threshold.
Single family new signed contracts nearly doubled year-ago levels, but activity peaked in August. Single family new inventory was also nearly double the prior-year level and peaked in September.
Single family and condo new signed contracts remained well above year-ago levels. Single family activity peaked in July. New inventory for single families remained well above year-ago levels.
Single family and condo new signed contracts were higher than year-ago levels. Single family new signed contract activity peaked in July. New listings rose across both property types but were overpowered by new signed contract gains over the same period. The most pronounced growth in single family new signed contract was above the $600,000 threshold.
Single family and condo new signed contracts edged above year-ago levels. Single family new signed contract activity peaked in June and saw the highest gains above the $2,000,000 threshold. Single family new inventory fell sharply, keeping the pace of the market brisk.
Single family and condo new signed contracts showed gains of more than triple the totals in the same month last year. New listings for both property types were up sharply over the same period but well below the rate of new signed contract growth. Single family new listings have fallen by half in two months, maintaining brisk the market pace.
Elliman Report: November 2020 Florida New Signed Contracts
Palm Beach County
New signed contracts for single families and condos rose year over year across all price tranches. New inventory for both property types slipped, helping maintain a rapid market pace.
Condo’s new signed contract annual growth surged ahead of single families across all price tranches. New inventory for both property types slipped, helping to maintain a rapid market pace.
New signed contracts for single families and condos saw modest overall gains, keeping the market pace moving quickly. New inventory gains were concentrated above the $500,000 threshold for single families and above the $1,000,000 threshold for condos.
New signed contracts for single families and condos pressed higher year over year, keeping the market pace moving quickly. New inventory for single families saw only slight gains as new inventory for condos fell sharply, with much of the drop occurring below $400,000.
New signed contracts for single families and condos pressed higher year over year, keeping the market pace moving quickly. New inventory for condos jumped while new inventory for single families slipped, with much of the decline occurring below $300,000.
Elliman Report: November 2020 California New Signed Contracts
Los Angeles County
Year over year gains for condo new signed contracts continued to outperform the increases in single family new signed contracts. However, new inventory for single families plummeted, maintaining a brisk market pace. New signed contract growth was seen above the $600,000 threshold for single families and above the $300,000 threshold for condos.
New signed contracts for single families and condos slipped year over year. However, new inventory for both property types dropped sharply, keeping the market pace moving quickly. New signed contract growth was seen above the $800,000 threshold for single families with no distinct condos pattern.
San Diego County
New signed contracts for single families and condos slipped year over year. However, new inventory for both property types dropped sharply, keeping the market pace moving quickly. New signed contract growth was concentrated above the $600,000 threshold for single families and above the $500,000 threshold for condos.
Elliman Report: November 2020 Colorado New Signed Contracts
New signed contracts for single families more than doubled while condos rose five-fold from the same month a year ago. Single family new inventory fell sharply as condo new inventory moved higher.
New signed contracts for single families doubled as condos saw significant gains from the same month last year. Single family new inventory fell sharply as condo new inventory pressed higher.
Josh Brown on Instagram: No, they didn’t “democratize the stock market”, you’re just paying for stuff in a different way. Here’s the truth
The above quote from Josh Brown, CEO of Ritholtz Wealth Management topped a prior epiphany back when Mayor Bloomberg tried to make it illegal to sell 16oz sodas to which Josh quipped his exaspiration (paraphrased from memory): “Why 16 oz sodas? Our cupcake shops have cupcake shops!” – brilliant.
There is a lot of fintech hyperbole that surrounds real estate today. The Compass IPO comes to mind. So does the last question of my college macro econ class – it was a multiple choice of trite expressions:
What are the great truths of economics?
a) Look out or they’ll do it to you.
b) Them that has, gets.
c) There’s no such thing as a free lunch.
d) All of the above.
Obviously, the answer is “d.”
But there’s more to the hyperbole – someone once said “when a software app is free, then you are the product.”
I saw Josh Brown’s Instagram post come through my feed. So I stopped and listened to it. And then I listen to it again. He spoke with a clarity that made me envious.
I’m not a stock guy. It doesn’t matter. Just listen to his answer that sets him apart from most financial services talking heads. The real estate industry needs this type of transparency.
PODCAST INTERVIEW: Knight Frank Webinar on the Global Market Outlook for 2021
Liam Bailey, Global Head of Research for Knight Frank in London invited me to participate in a webinar to discuss the outlook for real estate around the globe. Liam brought people from his research team to speak about the UK, China, and the global luxury market. The information shared was quite informative.
If you’re interested in just the New York/U.S. perspective, I start speaking at about the 20:00 mark. The webinar is saved on Microsft Teams so just click here or on the image below to launch the webinar.
Housing Frenzy: Speed Is What We Got From Covid
This New York Times piece Explaining the Frenzy in the Housing Market is a spectacular piece. Should be required reading for anyone in the real estate industry. There are a lot of especially good reads in the links at the bottom of these housing notes that talk about the future of real estate this week.
After the pandemic, the home buying process may be a lot faster.
Our favorite charts of the week of our own making
Len Kiefer‘s Chart Handiwork
Click on the following two GIF files to see their movement.
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
The Sham 45-Day Bylaw Modification Process To Keep Jim Amorin’s Sham Petition Process Explained
After the outrage of the multiple sham petition process use by the Appraisal Insitute’s self-dealing efforts to keep Jim Amorin in power, we get another taste of the embedded corruption of AI leadership. If executives are aware of the corruption and do nothing, then they are corrupt as well.
After you read the following post, please contact Joan Barngrover, board secretary and special assistant to the CEO, Appraisal Institute at firstname.lastname@example.org and strongly present your opposition to this sham election maneuver known as the petition process.
Here are the two key documents to familiarize yourself with concerning the existing sham petition process in the bylaws and the proposed update to the sham petition process to give the appearance they did something to fix it. Remember this was the sham procedure to overturn the national nominating committees’ vetted choices. There are many things to be extracted from this 45-Day Notice but I focused on what appeared to be the most outrageous.
After Jim Amorin fought so hard to impede Craig Steinley’s election in the sham election process after being nominated for second vice president because he is not an apparent FOJ, Jim and the FOJs doubled down to continue the tradition of corruption of the past decade.
President Jeff Sherman – someone who I thought I had accurately gauged his high integrity when we met in person last year based on what he told me in person – appointed the Vice President Election Process Project Team (VPEPPT):
Rick Borges, Ken Wilson, Jim Murrett, Heather Places, Lindel Schulze. Interesting that Rick (2013), Ken (2014), Jim (2018) were national presidents and all FOJs, Heather is a third director for Region V (now the vice-chair of Region V was part of the petition process to not have Craig as VP so she is an FOJ), and Lindel Schulze (Region II third director) who no one I know has any idea who he is.
Here’s the plan not having learned from the recently discovered sham election processes against Craig Steinley and for Jim Amorin well chronicled here in Appraiserville.
The proposed bylaw changes regarding the petition process (sham election maneuver to keep Jim Amorin in power) by the VPEPPT recommended:
They recommended 35-40% approval by the Board of Directors and then mysteriously, the official number was changed to 30%. That 10% increase from the current 20% is only a 2 person increase by my calculations to get enough BOD members’ votes to overturn NNC. In other words, to override the thoroughly vetted candidate sent by the membership to the national nominating committee, only 30% of the BOD needs to vote for the insertion of an FOJ candidate in their place. For what it’s worth, when the Appraisal Institute chooses to recall a regional chair or vice-chair, two/thirds of the BOD need to approve. This is not even a one-third requirement to randomly overturn a thoroughly vetted NNC selection. How arrogant. Increasing the threshold by 10% is insignificant for the chaos that it projects to damage the Appraisal Institute brand. This tool can also be and has been used to publically punish a candidate who is not an FOJ. This despicably unethical technique was done to Craig Steinley and Jennifer Marshall who were publically named and promoted by AI after the NNC decision and then publically embarrassed when FOJs sought to get their own guy in there. Why have an NNC then? This makes the Appraisal Institute a monarchy. The petition process is a sham and is an insult to the members of the Appraisal Institute and designed purely to keep Jim Amorin and FOJs in power. All Appraisal Institute members that collaborated on this effort are a disgrace and should step down or be removed from the organization. At the very minimum, every member of the Appraisal Institute should shame these people publically while they are part of this organization.
the revised sham petition process will not allow input from chapters or outside coalitions. This continues the pattern of isolating the Appraisal Institute from the rest of the world. The NNC should decide if the letters are pertinent and if they should be considered not our Bylaws, policies, or procedures. In a normal political process, the corrupt FOJs would just ignore incoming recommendations outside of AI like the significant number submitted by Craig Steinley for his nomination vetting. No, Jim Amorin and/or his team doubled down in arrogance and said they won’t even accept outside input on nominees brought forth by the membership. This is unbelievable and one of the most evident signs of the corruption of this leadership.
At some point, DOJ needs to delve into this institutional takeover. The arrogance of the FOJ regime is simply over the top as they work hard to preserve their organizational control lead by the current FOJ.
As I said earlier, all members need to contact Joan Barngrover, the board secretary and special assistant to the CEO, Appraisal Institute at email@example.com and strongly present your opposition to this sham election maneuver known as the petition process.
TAF Rumor Mill: Someone Will Be Named TAF ‘Acting President’ in 2021
This gossip item has been circulating appraiser industry water coolers during 2020:
Someone will be named ‘Acting President’ of The Appraisal Foundation in 2021. Who are we kidding? That person has been widely assumed to be Kelly Davids for years, the worst kept secret in D.C. And this also assures us that we will see more bat-shit crazy letters going forward. The diabolical bureaucratic strategy enables Dave Bunton to go on auto-pilot for the remaining three years of his contract. Dave effectively denied this to me directly when he criticized me for saying that he only had two years left on his contract last summer. But no one I know actually believes he will be active for four more years.
NAR Begins To Teach Its Members The Role Of Appraisers In A Home Sale
NAR just released a proactive document that teaches their membership and the consumers they interact with about the various valuation approaches that may be taken by the lender on a transaction.
This was my favorite text excerpt from the document:
An appraisal ordered by a lender is for the benefit of the lender to ensure that the collateral they are using to securitize the loan is sufficient. An appraisal is not a home inspection. While all appraisals are valuation services, not all valuation services are appraisals.
After my 34 years of appraisal experience, I continued to be amazed how few if any consumers are aware the appraisal is not being done for the buyer. The clarity provided in the document and places more responsibility on real estate agents and brokers not to misrepresent the role of the person providing a valuation opinion as collateral for the mortgage.
This document is a great step forward for NAR through the efforts of appraisal industry stalwarts like Peter Gallo, Becky Jones, Frank Gregoire, and others on the Real Property Valuation Committee. The quality of appraisal input is excellent in the document, especially the table on the second page. Thank you NAR!
Voice of Appraisal Podcast: Phil Crawford Explains The Impact of the NAR Appraiser Role Letter
This is a great day for Appraisers, The Voice of Appraisal Podcast and FindMyAppraiser.com!!! We thank the Real Property Valuation Committee at the National Association of Realtors for following our lead over the past two years and creating the “Know Before Your Own” property disclosure brochure! Appraisers can now move forward in creating new “Consumer Protection” valuation products and regulators can finally move forward with new protocols for non-client “complaints”! This changes EVERYTHING! Thank you N.A.R.!!!
OFT (One Final Thought)
I lost track of where I found this while rummaging through my weekly trash heap of images, but this is a keeper…and quite deep if you let it take over your mind…outback.
OFT (One Final Thought)<AFT (Another Final Thought)
I took stock of all the apps I use for daily communication with others – and this is not ALL of them. I was really surprised by how quickly the amount had expanded.
Brilliant Idea #1
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Reads, Listens and Visuals I Enjoyed
- Explaining the Frenzy in the Housing Market [NY Times]
- Family Offices Hone Their Real Estate Investment Strategies [The Real Deal]
- Why Your House Price Might Keep Going Up [Bloomberg]
- The death and rebirth of America’s department stores, in charts [VOX]
- Homebuyers Brace for Pain in a Post-Pandemic Market [Bloomberg]
- Killin’ the dream [1000watt]
- The Regional Economy during the Pandemic [Liberty Street Economics]
- The death of the department store and the American middle class [VOX]
- The Art of Building the Impossible [New Yorker]
- I have seen the future of housing [noahpinion.substack.com]
- Home Page [NYC Homeowners Coalition]
- How climate change could spark the next home mortgage disaster [Politico]
- Most Expensive U.S. Zip Codes in 2020: Medians on the Rise in Country’s 100 Priciest Zips [Property Shark]
- Young Homebuyers Are Vanishing From the U.S. [Bloomberg]
My New Content, Research and Mentions
- New York Suburbs Sees Increased Interest in Condos [The Real Deal]
- New signed contracts for Manhattan co-ops dropped in November following October uptick [Brick Underground]
- Brooklyn townhouses close in head-spinning time, number of signed contracts up over last year [amNewYork]
- Condo-buying boom in New York suburbs [The Star]
- New signed contracts for LA condos surge 47% in November [Livabl]
- SELLER’S MARKET! Palm Beach County House Sales Soar, Inventory Drops [Boca News Now]
- As suburban home prices go through the roof, buyers reconsider condos [Crain's NY]
- Brooklyn Townhouses Close in Head-Spinning Time, Signed Contracts Up Over Last Year [Brownstoner]
- Manhattan Sales Contracts Remain Down But Improving [The Real Deal]
- New York Suburbs See Condo-Buying Boom as Houses Get Too Pricey [Newsmax]
- South Florida Resi Contracts Grow In November 2020 [The Real Deal]
- LI housing market 'very active' — in $800,000 to $1 million range [Newsday]
- New York suburbs see condo-buying boom as houses get too pricey [Business Times]
- How a Current NY Loan Still Wound Up in Hot Water [GlobeSt]
- New York Suburbs See Condo-Buying Boom as Houses Get Too Pricey [Bloomberg]
- The downside of the hot 2020 housing market: rapid home-price growth [Housingwire]
- NYC Falls From Top 10 List of Nation’s Most Expensive Zip Codes
- Are these the cheapest apartments for sale in NYC? [NY Post]
- Median Home Price Sets New Record in California [NY Times]
Recently Published Elliman Market Reports
- Elliman Report: Florida New Signed Contracts 11-2020 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 11-2020 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 11-2020 [Miller Samuel]
- Elliman Report: California New Signed Contracts 11-2020 [Miller Samuel]
Appraisal Related Reads
- How Vaccines & Value Development Have Sped Up [Cleveland Appraisal Blog]
- TAF Turns Down Free Grant Money, Counts on Appraisers to Foot the Bill [Jonathan Miller/Appraiser Blogs]
- How AVMetrics Tests AVMs [AVMetrics]
- How much are buyers paying above the list price? [Ryan Lundquist/Sacramento Appraisal Blog]
Extra Curricular Reads
- Invasive Wasps Are Posing a 'Serious Threat' to Passenger Planes, Study Says [Vice]
- COVID-19 Indoor Safety Guideline [Kasim Khan, John W. M. Bush, and Martin Z. Bazant]
- 6 Steps to a Great Thanksgiving Nap [NY Times]
- Notable Deaths 2020 [NY Times]