The Shapes of Words In The Language of Housing
Linear regression to an economist pic.twitter.com/MSsSCBlFMp— Ryan Briggs (@ryancbriggs) January 2, 2021
But I digress…
Manhattan Apartment Nearly Double YOY
I’ve been the author of the expanding Douglas Elliman market report series since 1994. The December 2020 Elliman Report for Manhattan, Brooklyn & Queens Rentals was published yesterday. The key takeaway pertained to the continued sharp drop in rents creating more affordability, drawing in more demand as well as existing tenants playing musical chairs trying to get better deals.
The Bloomberg piece on the rental report was the fifth most-read article by the 350K Bloomberg Terminal subscribers at one point on Thursday despite the insane volume of non-housing market news.
Most importantly, the article contains the most whacked-out chart of new leasing activity will the plunge in rents (in two colors)!
Elliman Report: December 2020 Manhattan, Brooklyn & Queens Rentals
MANHATTAN RENTAL MARKET HIGHLIGHTS
“For the third straight month, new lease signings rose to their highest level for the current month since the financial crisis.”
- New leases rose sharply to the most signed for December in more than a dozen years
- The vacancy rate slipped from last month’s record to the third-highest on record
- The monthly concession rental equivalent slipped from last month’s record to the second-highest on record
- Net effective median rent fell year over year at the second-highest rate in at least nine years
- Smaller apartments sizes saw a larger percentage decline in median rent than larger apartment sizes
- The market share of landlord concessions was sharply lower for the luxury market than for the remainder of the market
BROOKLYN RENTAL MARKET HIGHLIGHTS
“For the second consecutive month, new lease signings rose to their highest level for the current month since the financial crisis.”
- New lease signings surged annually to the most signed for December in more than a dozen years
- The net effective median rent fell year over year at the highest rate in more than eight years and fell to its lowest level in nearly six years
- The market share of landlord concessions fell short of the prior month record but represented nearly half of all market activity
QUEENS RENTAL MARKET HIGHLIGHTS
“New lease signings showed significant growth as rental price trends continued to tumble.”
- Net effective median rent fell year over year for the eighth consecutive month
- New lease signings surged after sixteen months of annual declines
- The monthly concession rental equivalent rose to a new record
Westchester County Sees Sales Surge From City Demand and Record Low Mortgage Rates
Douglas Elliman published our research this week on the NYC suburban markets of Westchester and Putnam/Dutchess counties of New York.
Of course, there is the ever-important Bloomberg chart on Westchester’s price gains (in two colors)!
WESTCHESTER SALES MARKET HIGHLIGHTS
Elliman Report: Q4 2020 Westchester County Sales
“Prices and sales pressed higher as listing inventory continued to fall.”
- Median sales price surged annually to the second-highest level on record
- The number of sales in the fourth quarter was the most for a fourth-quarter on record
- Listing inventory fell year over year for the sixth straight quarter
- Single family median sales price across all bedroom categories posted large gains, with the highest in the larger sizes
- More than a third of single family sales that closed in the quarter went to a bidding war
- The highest number of condo sales of any quarter on record
- Condo sales surged after three consecutive quarters of significant declines
- Luxury listing inventory fell year over year at the highest rate in eight years
- Luxury months of supply showed the fastest market pace in eight years
PUTNAM SALES MARKET HIGHLIGHTS
Elliman Report: Q4 2020 Putnam County and Dutchess County Sales
“The market continued to show more strength with rising prices and year over year surge in sales.”
- The number of sales saw an annual surge at their highest rate in more than four years
- Largest annual increase in median sales price in twelve quarters
- Listing inventory fell year over year at the highest rate tracked in thirteen years
DUTCHESS SALES MARKET HIGHLIGHTS
Elliman Report: Q4 2020 Putnam County and Dutchess County Sales
“Price indicators continued to show significant gains as listing inventory fell sharply.”
- Median sales price jumped annually at the highest rate tracked in thirteen years
- Listing inventory fell year over year for the fifth consecutive quarter
- Months of supply fell to the fastest market pace in more than six years of tracking
A Photoshoot On A Terrace Overlooking Central Park
Crain’s New York asked me to do a photoshoot on the terrace of a spectacular apartment overlooking Central Park West to be used with a story on the housing market. I did just that and the photographer was the same person that photographed me for a Crain’s cover about two decades ago.
Here’s what the photoshoot looked while in progress and that amazing terrace:
And this was the photo used in the Crain’s New York piece. This appraisal work is fun!
A Homebuilder CEO Comment From 2007 That Didn’t Suck
This week I learned about this 2007 story about a publicly-traded U.S. homebuilder CEO comment in a public forum:
“Donald Tomnitz, CEO of D.R. Horton (DHI), flipped his lid speaking at a Citigroup investor conference. “I don’t want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year”
And all the business outlet headlines then screamed with glee on the ability to use language typically reserved from conversations among friends.
NBC: D.R. Horton CEO: 2007 will ‘suck’
Fox/AP: CEO of Nation’s Largest Homebuilder: 2007 Is Going to ‘Suck’
CNBC: What’s ‘Tough’ for One CEO ‘Sucks’ for Another
While some outlets couldn’t handle it:
LA Times: Frankly, builder sees slump in ’07
BBC Bleak housing outlook for US firm
Orange County Register Housing slump will linger, D.R. Horton exec says
But this sarcastic WSJ headline response was the best:
WSJ: An Eloquent Oration on the Condition of the Manufacture of Domiciles
Inspired, I did the same thing today and it was fun and efficient but not something I plan to incorporate into all my presentations.
At the close of a presentation to a large audience of real estate agents today, I was asked to succinctly compare the Manhattan sales market of 2020 to the potential for 2021. Upon reflection, I said that 2021 had the potential to suck less.— Jonathan Miller (@jonathanmiller) January 14, 2021
The Best Manhattan Real Estate Dad Joke Ever
Based on the Bloomberg story regarding a 51% discounted resale at supertall One57 that I shared here last week on housing notes, economist/writer Daniel Gross lays this Manhattan-specific humor on us.
so, more like OneHalf57 https://t.co/n6IzuTx7De— Daniel Gross (@grossdm) January 14, 2021
Our favorite charts of the week of our own making
Our favorite charts of the week
[NYT – click on image for supporting article]
[NYT – click on image for supporting article]
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
In The Aftermath of the AI Board Meeting, FOJs Double Down On Their Corruption With Another 45-Day Notice
Lots of stuff to discuss here but not enough time to make a living – so I will be posting extensively about the BOD meeting and this new 45-Notice on my Matrix Blog this weekend. I will link back here as well as provide the link in next week’s Housing Notes.
NREP’s Take On FHFA Modernization Efforts And The Public Comment Period
I’ve often said that Appraisal “Modernization” is a codeword for “AVM.”
Some of the coalitions are drafting a response:
Dale Bailey of the South Carolina Professional Appraisers Coalition [SCPAC] said this:
Several Coalitions are drafting a response, for the record, about the change in the process and how we feel about some of those changes. We are hoping to have each Coalition be represented in the final paper. Please send any contributions of issues you may have with these changes to us for incorporating into the paper. It would help a great deal to have input from as many of you as possible.
USPAP Doesn’t Require An Inspection So Why Is It Trying To Determine What An Inspection Is 30 Years Later?
The ASB is struggling with the 4th Exposure Draft and issues of clarifying significant professional assistance and what an inspection means? Why? USPAP doesn’t require an inspection – never has. And good grief…a FOURTH exposure draft in an already over-analyzed two-year USPAP cycle?
The reason why Dave Bunton & Co. (TAF) has been emphasizing the Supervisor position is they are trying to retrofit USPAP back into the position. This is the same institution that felt it was appropriate to send this bat-shit crazy letter to their regulator.
Think about what has been said at every AQB meeting since Plymouth Rock – “trainees” are unable to find supervisors to mentor them to get their experience credits or banks won’t accept their reports and therefore they can’t get work to make a living. This is one of the biggest problems with the lack of diversity in the appraisal profession and it starts with the lack of diversity at TAF. This non-diversified institution, despite perhaps, the best intentions of those that are active are trying to solve the problem of getting more diversity into the profession. Yet the industry is aging and not diverse because the bureaucratic largess that TAF has created in the merry-go-round USPAP cycle gradually made it nearly impossible to join.
Incidentally, Title XI doesn’t require experience! Take a step back and look at other professionals like lawyers and accountants – they are required to take a comprehensive (hard) exam and do not have to have thousands of hours of experience. The public trust of these professions is not damaged by this practice. As a good friend of mine in Oklahoma has told me many times “appraising isn’t rocket science.”
Why is experience a unique requirement by the appraisal industry? TAF has constructed a gatekeeper mentality to the profession, that is manned by appraisers who are not largely diversified either. This is an epic fail and largely has resulted in a lack of diversity and an aging appraisal population.
And by the way, “experience” is always ongoing and appraisers must always continue to learn. The market will decide the value of your experience as an appraiser. Tagging an appraiser as a “trainee” is essentially tagging them as a liability and then artificially derived a number of required hours magically makes them a non-liability. I’ve known residential trainees in my market who were far more competent than experienced MAIs.
Incomes of supervisory appraisers have been squeezed by the AMC mentality of the mortgage industry and therefore most don’t want to take on a “trainee” and dedicate two years of training to someone who can’t sign a report for most clients, provides additional liability, and may leave to go on their own after certification.
Let’s try to focus on the bigger issues that impact the everyday lives of appraisers than on this insane &^&^%$#%^** busywork minutia that does nothing but reduce the wide-scale entry to all into the profession.
Let’s up the industry’s game to be at least as competent as other professional services. After all, the current gatekeeper mentality pushed by TAF on the backs of the supervisors is damaging the public trust. My goodness.
TAF Still Focuses On Money Over Diversity, For BOT Positions
From Dave Bunton’s recent TAF announcement:
TAF’s own press release is seeking candidates that will be FODs (Friends of Dave), they show that financial prowess takes precedence over the appraisal profession. It’s just baked into a non-profit institution with $8 million in reserve.
Our annual call for applicants is a real opportunity to cast a wide net for candidates that bring leadership and non-profit management experience who also have a deep interest in advancing the appraisal profession
Diversity would be great to emphasize given the total lack of it, of course. But considering that their announcement lists serving the profession AFTER non-profit management experience shows their priority remains finances over the profession. The fact that the announcement doesn’t even talk about some of the things facing the profession (e.g., bias, waivers) shows how detached they are from actual appraisers.
OFT (One Final Thought)
Thinking about that Steve Miller song and where that word Pompatus came from…
Then stroll through this list.
The pompatus of love.— The '60s at 60 (@the_60s_at_60) January 12, 2021
– U.S. top 20 for January 12, 1974 pic.twitter.com/mAYdxJ19gj
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Jonathan J. Miller, CRP, CRE, Member of RAC
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller
Reads, Listens and Visuals I Enjoyed
- Fleeing the City? You’ll Be Back [Bloomberg]
- The Work-From-Home Boom Is Here to Stay. Get Ready for Pay Cuts [Bloomberg]
- City Council Hosts Hearing on Racial Disparity Bill [The Real Deal]
- Compass poached brokers with bait-and-switch, ex-agent alleges [The Real Deal]
- Compass Files Confidentially for IPO [The Real Deal]
- Are Americans Really Fleeing Big Cities? Study Says No [Realtor Magazine]
- Why Doesn’t New York Construct the World’s Tallest Building Anymore? – Skynomics Blog [Building the Skyline]
- Post-Pandemic Housing Reality, Alt Cities to CA-NYC Housing Boom [Newgeography.com]
- How New Shell Company Disclosure Law Impacts Real Estate [The Real Deal]
My New Content, Research and Mentions
- Westchester County Home Sales Highest Since 1996 [The Real Deal]
- Brooklyn sale prices, volume skyrocket to close out 2020 [Crain's NY]
- Signs Of A Rebound? Renters Are Coming Back To New York City [Forbes]
- Manhattan apartment rentals nearly doubled in December [CNBC]
- Manhattan Rental Leasing Jumped 94% in December 2020 [The Real Deal]
- Like New York’s Suburbs, Brooklyn and Queens Markets Are Seeing Strong Gains [Mansion Global]
- New York Exodus Gives Westchester Most Home Sales in 24 Years [Bloomberg]
- Manhattan Bargain-Hunters Drive a 94% Jump in Apartment Leases [Bloomberg]
- Cheap rents, lots of sales should define city's residential market this year [Crain's NY]
- Billionaires' Row Condo Sells After 50% Price Chop [Habitat Magazine]
- As Wall Street Heads South, Florida Braces for a Gold-Plated Makeover [Bloomberg]
- High-End Condo Buyers Just Took Another Hit [Habitat Magazine]
- The Pandemic Made WD-40 Bigger Than Macy's [Bloomberg]
- Future of Gowanus rezoning hanging on NYCHA commitment [Politico]
- Condos vs. townhouses: Which is a better investment in New York City? [Brick Underground]
- Manhattan co-op and condo sales ‘surged’ in fourth quarter [Brick Underground]
- NYC commercial real estate market recovery partly depends on speedy distribution of COVID-19 vaccine: experts [NY Daily News]
- Long A New York Real Estate Mainstay, LLCs Lose Their Anonymity [Gothamist]
- Billionaires’ Row Condo Records 51% Resale Loss in Luxury Glut [Bloomberg]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 12-2020 [Miller Samuel]
- Elliman Report: Putnam & Dutchess Sales 4Q 2020 [Miller Samuel]
- Elliman Report: Westchester Sales 4Q 2020 [Miller Samuel]
- Elliman Report: California New Signed Contracts 12-2020 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 12-2020 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 12-2020 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 12-2020 [Miller Samuel]
- Elliman Report: Northern Manhattan Sales 4Q 2020 [Miller Samuel]
- Elliman Report: Manhattan Sales 4Q 2020 [Miller Samuel]
Appraisal Related Reads
- The housing market nobody predicted [Sacramento Appraisal Blog]
- FHFA to Screw Up Appraisals – Creating More Loopholes to Be Exploited [FRANK GARAY & BRIAN STEVENS]
- A Case of COVID, 2020, and Birmingham Real Estate [Tom Horn/Birmingham Appraisal Blog]
- Seattle Housing: A Case Study in Crisis Creation [CRE]
Extra Curricular Reads
- Quant Fund or Metal Band? [QuantFundorMetalBand.com]
- Grubhub Will Deliver Girl Scout Cookies Amid the Pandemic [NY Times]
- Report: Nation's Gentrified Neighborhoods Threatened By Aristocratization [The Onion]
- The devil and the crossroads: The legend of Robert Johnson [Farout Magazine]
- The Origins of Video-Chat Voice [New Yorker]