Grocery and House Shopping Hasn’t Changed Dramatically Since The Eighties
When you realize that grocery shopping during your college years is today’s archival study which automatically makes you a relic.
But I digress…
Context: Manhattan Rental Vacancy Rate Versus Listing Inventory
A diligent regular reader of our rental market report asked this:
This month your vacancy rate decreased and inventory increase[d]. The reports for the last 3 months suggest that they are negatively [correlated]. Thank you for the clarification:
While “three data points make a trend” is an often-used rationale, sometimes it’s not that simple. Below, the two metrics appear strongly correlated, but I favor the vacancy rate because it tends to be slightly ahead of listing inventory as a trend.
NYC Rental Market Trend Reporting & Affordability: Is $4000+ Here to Stay?
Kael Goodman of Marketproof and I discussed the challenges of reporting market trends of rentals – it was a great conversation for those who want to comprehend the process better and understand what the opposite of rising rents is.
Relevant charts on rental trends…
U.S. Luxury Housing Is Shifting To Florida
This Bloomberg analysis: America’s Priciest Neighborhoods Are Changing as the Ultra-Rich Move to Florida shows how the pandemic pivoted activity to luxury.
Miami region saw its number of million-dollar ZIP codes more than double from the end of 2019 through 2022. It’s a similar story in places such as Park City, Utah, or Flagstaff, Arizona, with house-price gains of more than 90% in some wealthy neighborhoods.
Thoughtpiece: WFH vs RTO
My friend Barry Ritholtz wrote a great primer for how to think about working from home versus returning to the office:
My favorite part:
Intuitively, removing commuting from one’s daily schedule seemed so right. it’s why the reluctance to go back to the 9 to 5 grind has grown so large. Millennials who had yet to embrace this absurd lifestyle recoiled; those of us who have grown used to it had the scales fall from our eyes.
WFH vs RTO [The Big Picture]
NYC Can’t Fill Government Job Openings, Consistent With U.S. Trends
My theory on government job openings is that they generally pay less than the private sector but are more secure. Thus, the way the tradeoff used to work. We’ve seen a big increase in wage gains as the private sector struggles to fill open positions. I suspect it is much more difficult for the government sector to respond quickly to needed wage increases to stay competitive with the private sector.
Perhaps a more widely available WFH baseline will help attract more government workers as a perk. It will certainly save office leasing costs. And NYC is facing significant future revenue shortfalls due to the slowdown in residential sales and a sharp drop in office leasing activity—just a thought.
NYC mayor, in turnaround, will consider remote work for city employees [Axios]
A Visualization On Buses That Shows NYC Is Always Moving
The buses of New York City pic.twitter.com/2m4MDkwQRd— Hayden Clarkin (@the_transit_guy) February 11, 2023
My favorite housing market/economic charts of the week made by others
Interesting tidbit: if you look at smoothed m/m CPI prints, >80% of inflation is coming from Shelter. That will likely fall later in the year, but big for now. The Fed is watching core services ex-shelter, so the disconnect between what might affect markets and what might affect… https://t.co/Kysq3V0Oo7 pic.twitter.com/oepSHBp3bo— Liz Young (@LizYoungStrat) February 14, 2023
The current housing market is based on the land banks and farm mortgage system that preceded it. The history is very clear and has already been written with only subtle differences.@texasrunnerDFW— New Low Observer (@NewLowObserver) February 11, 2023
Before the Fed in red.👇🏽👇🏽 https://t.co/EFK4F97nyS pic.twitter.com/7VV9MKw0eK
Len Kiefer‘s Chart Handiwork
My favorite random charts of the week made by others
Good #SuperBowl Sunday!— Mohamed A. El-Erian (@elerianm) February 12, 2023
Per the @nytimes, it's "akin to a national holiday, one of the few times of year that tens of millions of Americans do the same activity at the same time"
"[It} is reliably the year’s most-watched broadcast, a status that reflects football’s dominant role" pic.twitter.com/Q3qAzAD4XY
Upcoming Speaking Events
Thursday, February 23 at 12PM “Housing Analytics: How the Sausage is Made” with my friends Kael Goodman at Marketproof and Noah Rosenblatt at UrbanDigs
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
TAF Proposes That Appraisers Can Engage In “Ethical” discrimination
This CFPB post lays out the absurdity of TAF wordsmithing. As a reminder, TAF is the organization that wrote the bat-shit crazy letter, the chickenshit letter and is the subject of an active investigation by HUD on whether USPAP promotes a lack of diversity in the appraisal profession (BLS: 97.7% of appraisers are white). I wonder if EY is aware that one of its partners is the current Chairman of TAF’s Board of Trustees?
Appraisal standards must include federal prohibitions against discrimination [CFPB]
Appraisers cannot discriminate. Yet look at TAF wording on this noted in the CFPB post:
the draft Ethics Rule emphasizes that “[a]n appraiser must not engage in unethical discrimination,” implying that appraisers may engage in “ethical” discrimination, a concept foreign to current law and practice.
TAF: Cranking Out PR Pieces On An Event Before The Event Happened
The Appraisal Foundation’s Appraisal Standards Board held a public meeting yesterday and here are some observations:
TAF PR Release at 2:47 PM ET. Appraisal Standards Board Responds to Public Feedback The public meeting was scheduled from 1 PM to 3 PM and as I recall, didn’t run the full 2 hours. Working for decades in the public relations process, I can only deduce that this release was written before the webinar occurred. This process is merely a chess match between FODs and the rest of the world.
And this email from the TAF site:
How hard is this to fix? This release pretty much sums everything up. TAF has known the ethics rule was problematic for years and is acting as though this is a brand new thing. I’ve written about the Ethics Rule for years, and yet TAF keeps kicking the can down the road indefinitely. Think about it. This announcement for a fifth draft of USPAP means they never considered fixing the Ethics Rule in the first four drafts, let alone the prior version of USPAP, when this issue came up originally. They had feedback for years on this issue. How hard is this to fix?
Here’s my key gripe with the existing Ethics Rule (pre-drafts) that has been in place for years. And remember that no legal counsel reviewed the existing Ethics Rule embedded into law in 55 states and territories during this period.
Bold my emphasis on this current portion of the text of the approved Ethics Rule in public view:
must not use or rely on unsupported conclusions relating to characteristics such as race, color, religion, national origin, gender, marital status, familial status, age, receipt of public assistance income, handicap, or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value;
The writing here is abhorrent. This highlighted text means that it is ok for appraisers to use or rely on supported conclusions about race, color, religion, national origin, etc. This is fifth-grade grammar stuff, and it’s the same issue in the CFPB post discussed earlier on “ethical versus unethical” nomenclature.
As a reminder, here is the definition of “misleading” that is still on the books (bold my emphasis):
Intentionally or unintentionally misrepresenting, misstating, or concealing relevant facts or conclusions.
There are about 800 fields in a typical appraisal form. The idea that a typo is a violation of USPAP is absurd. This is how TAF damages the public trust and places appraisers in legal jeopardy through this irresponsible process of updating USPAP every two years for the sake of updating USPAP to generate revenue.
Missing The Appraisal Forest For The Appraisal Trees
Here’s a thoughtful piece by an appraiser after the ASC hearing in January that likely sums up how the majority of appraisers feel. I get it.
But the driving issue is that the industry is dead last in diversity by occupations tracked by BLS. 400th of 400. Less diverse than farmers and ranchers (at 399). The issue right now is that appraisers are 98% white and don’t have a credible leg to stand on to make any argument that we have no racial bias as an industry. Of course, we do have bias – I can see it in comments appraisers make during public hearings online. So does every industry. The effort here is to fix that, not defend 98% white as okay. It’s not.
Buzzcast: Lender Perspective on Appraisal Values, Plus A White Paper
The Buzzcast The Lender Perspective on Appraisal Values – I appreciated the perspective that Melissa Sanchez Malpass of Alston & Bird provided in her (with Nanci Weissgold) white paper “Appraisal Values and Lender Liability: Art, Science or Gamble?“
And once again, appraisers are their own worst enemies, taking a defensive posture and not trying to understand the perspective of other parties and the complete lack of awareness of unconscious bias. I see comments from practicing appraisers that are cringeworthy from their lack of awareness, and they remain clueless. At least half of the comments in the Appraisal Buzz piece are angry denials. This challenge to resolve is present in all industries, but appraisers feel they are being singled out as the only ones subject to this scrutiny.
And from the Youtube page…
Appraisers feel under represented and alone in this fight. A 98% white ratio makes this a problem for all appraisers, which is officially the Appraisal Foundation’s legacy.
Lets replace leadership at TAF and fix this awful, 5th grade USPAP editing process for once and for all.
OFT (One Final Thought)
Take the plunge…er.
Brilliant Idea #1
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Brilliant Idea #2
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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
- State of the market: At height of the season, how is Palm Beach real estate faring? [Palm Beach Daily News]
- Blackstone’s $271M Multifamily Portfolio Loan Hits Special Servicing [Commercial Observer]
- Trump’s 40 Wall St. Put on Lender Watch as Vacancies, Costs Rise [Bloomberg]
- The Rise of the Millionaire Renters [Bloomberg]
- America's Priciest Neighborhoods Are Changing as the Ultra-Rich Move to Florida [Bloomberg]
- By Adding Apartments, Malls Seek to Bring Shopping Closer to Home [NY Times]
- WFH vs RTO – The Big Picture [Ritholtz]
- NYC Mayor Adams will consider remote work options for city employees [Axios]
- New Skyscraper, Built to Be an Environmental Marvel, Is Already Dated [NY Times]
- California's population has dropped by more than half a million in about two years. Why? [LA Times]
- Starwood Single-Family Rental Firm Stung by Housing Market Slump [Bloomberg]
- Are Suburbs a Ponzi Scheme? [Dror Poleg]
- Where home prices in your local housing market are headed in 2023, according to Zillow's revised forecast [FORTUNE]
- ‘Lake Tahoe has a people problem’: how a resort town became unlivable [The Guardian]
- Is $200k a Year a Good Income? [Of Dollars and Data]
- New bill would require NYC co-op boards to give reasons for rejecting a buyer [Brick Underground]
- Related to Hand Over Empty Long Island City Office Campus [The Real Deal]
My New Content, Research and Mentions
- New York City’s borough presidents are ready to build [City & State NY]
- Crunching the Numbers: 2022 NY Real Estate Market Predictions [Accesswire]
- Crunching the Numbers: 2022 NY Real Estate Market Predictions [Patch]
- Hollywood Hills Home Once Owned by Madonna Lists for $21 Million [Mansion Global]
- ‘Year Of Disappointment’ In Store For NYC’s Condo Market [Bisnow]
- WSJ News Exclusive | Hollywood Hills Home Once Owned by Madonna Lists for $21 Million [Wall Street Journal]
- Jonathan Miller on What To Expect From the Hamptons Real Estate Market in 2023 [27 East]
- Brooklyn sees a bevy of luxury rentals hit the market at record prices [NY Post]
- New York City rents hit record highs in January [6sqft]
- The City With The Nation's Highest Apartment Prices Just Jumped Again, While Vacancies Hit Unprecedented Lows [Yahoo Finance]
- Manhattan median rent climbed to record high in January [Brick Underground]
- Manhattan rents nearing record highs [CBS News]
- Manhattan monthly rents top $5,000 [Fox 5 NY]
- 米家賃上昇、高まる負担感 NY市は平均収入の7割に（写真=ロイター）[Nikkei]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 1-2023 [Miller Samuel]
- Elliman Report: Hamptons/North Fork Decade 2013-2022 [Miller Samuel]
- Elliman Report: Long Island Decade 2013-2022 [Miller Samuel]
- Elliman Report: Manhattan Townhouse 2013-2022 [Miller Samuel]
- Elliman Report: Manhattan Decade 2013-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: California New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 1-2023 [Miller Samuel]
Appraisal Related Reads
- Appraisal standards must include federal prohibitions against discrimination | Consumer Financial Protection Bureau
- The Real Cause of the Home Value Gap Is the Income Gap [Appraisers Blogs]
- The Lender Perspective on Appraisal Values [The Appraisal Buzzcast]
- 2023 Economic Forecast Series featuring Doug Duncan [The Title Report]
- The Lender Perspective on Appraisal Values [Appraisal Buzz]
- Appraisal Performance Index: 2022 Insights [Reggora]
- Leading Civil Rights and Consumer Advocates Press for Urgently Needed Reform of Appraisal System for Fairness [NFHA]
- Working from an Airstream [Ernest W. Durbin II]
- In Nearly Every State, People of Color Are Less Likely to Own Homes Compared to White Households [JCHS Harvard]
Extra Curricular Reads
- Record-breaking temperatures citywide: 'The most boring winter in NYC history' [Gothamist]
- A Spy Turned Up Dead in Ukraine. Who Was He Working For? [Wall Street Journal]
- Yes, Elon Musk created a special system for showing you all his tweets first [The Verge]
- How Gen Z and the Great Resignation created a wave of overinflated job titles [Business Insider]
- Why It Costs So Much to Build Our Subways [Curbed]
- The Coronation Emblem [Royal UK]
- How a shipping error 100 years ago launched the $30 billion chicken industry [Vox]