- Miller Samuel Real Estate Appraisers & Consultants - https://millersamuel.com -

January 7, 2022

Will 2022 Have A Psycho Killer Housing Market?

During the year before the Omicron surge, I saw David Byrne’s Broadway show Utopia [1] three times! I became a big Talking Heads fan in the late seventies when I was in college and the music continues to hold up.

The popularity of the song Psycho Killer from their debut album Talking Heads: 77 [2], which was originally written as a joke, continues to puzzle David Byrne.

And now this!


But I digress…

The Booming Manhattan Housing Market Plays Catchup With Region

I’ve been the author of the expanding series [5] of Douglas Elliman [6] market reports for 27 years starting with Manhattan. The release of this report [7] marks the start of the big quarterly gauntlet of releases.

Bloomberg presented a two-charter article and who doesn’t love a cool Manhattan chart?

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And CNBC provides additional insights on the record-setting results our report showed:

Douglas Elliman Chairman Howard Lorber also spoke about the condition of their U.S. market footprint.

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MANHATTAN SALES MARKET HIGHLIGHTS

Elliman Report: Q4 2021 Manhattan Sales [7]

Co-ops & Condos

“Despite the year-end acceleration of the latest COVID variant, the market rushed to catch up with the surrounding region and then some.”

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______________________________________________________
NORTHERN MANHATTAN SALES MARKET HIGHLIGHTS

Elliman Report: Q4 2021 Northern Manhattan Sales [13]

“Sales and price trend indicators closed out 2021 with annual gains.”

Co-ops & Condos
– All price trend indicators rose year over year and were above the same period in 2019
– Sales nearly doubled from the prior-year quarter and were up sharply from the same period two years ago

Townhouses
– All price trend indicators were above both prior-year levels and levels in 2019
– Listing inventory surged annually yet remained well below levels seen before the pandemic

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Analyzing The Massive Distortion In Average Sales Size During the Pandemic Era

After the lockdown ended, the economic damage was pointed largely at lower-wage earners, causing average sales size to skew larger. One of the exaggerated narratives that emerged was that consumers were purchasing larger homes. That might be true on the margin but last time I checked, a larger home is more expensive. The drop in mortgage rates did allow consumers to buy more house initially but a large part of that market distortion is starting to dissipate.

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New Signed Contracts Across The U.S. Continued To Be Restrained By Lack Of Listing Inventory Coming To Market

We just released our December New Signed Contract Reports for Douglas Elliman. While we are more than a year past the maximum sales distortion of 2020, demand continues to overpower listing inventory.

Elliman Report: December 2021 New York New Signed Contracts [19]

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Elliman Report: December 2021 Florida New Signed Contracts [22]

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Elliman Report: December 2021 Colorado New Signed Contracts [25]

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Elliman Report: December 2021 California New Signed Contracts [28]

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Boomers Are Finally Handing The Housing Baton To Millennials

This Bloomberg Opinion piece lays out the generation patterns for us: Millennials Are Finally Spending Like Grown-Ups [31]

The key factor that could affect inflation isn’t just demand but the size of the millennial population, which outpaced baby boomers in 2019 to become the largest U.S. generation.


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This Week in Aspirational Pricing

The high-end of the housing market is getting most of the attention during the pandemic era. Back in 2014, I started to observe the birth of a new super-luxury segment that was largely detached from the local housing market. Here are some great reads about the top of the top.

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Home Sales Over $100 Million Exploded in 2021 [WSJ [35]]

The 10 most expensive homes sold on Long Island in 2021 [Newsday [36]]

Luxury Home Sales Grew by 35% This Year [Robb Report [37]]

The eight priciest US homes each sold for at least US$100 million in 2021 as cheap money piled into fixed assets [SCMP [38]]

And while we’re at it, that LA spec home is known as “The One” and is on the auction block for $295,000,000 after asking $500,000,000. I know I’ve written about this listing quite a bit, but I’m fascinated with the narcissism of the developer on a scale that’s hard to match. That guy was able to keep this construction project going for years and always seemed to find the money to push on.

CNBC gives us info about the auction [39] and a new video tour…

The LA Times [40] wrote about the auction last month and Niami’s desperate attempt to find a cryptocurrency buyer.

It’s the latest chapter in an increasingly dramatic feud over the largest modern home in America, which has seen Niami hatch wild schemes in an attempt to keep his lenders from selling the place to recoup their losses.


Getting Graphic


My favorite charts of the week of our own making

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My favorite charts of the week made by others

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Len Kiefer [52]‘s Chart Handiwork

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Upcoming Speaking Events

Thursday, January 13th, 12 Noon – 1:00 PM

Our prep call for this event was lively and full of helpful insights to help you understand and navigate the market! You can register for free by clicking on the image below.

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[click on image to register]

Appraiserville

(For earlier appraisal industry commentary, visit my old clunky REIC [55] site.)

Selling Access To The West Virginia RE Appraisal Board?

The West Virginia Association of Real Estate Appraisers website [56] seems to be selling access the state’s real estate appraisal board. I am told it was started by someone trained by real estate appraisal board head and that founder is related to a registered lobbyist in West Virginia.

[57]

One of the membership benefits touted is “A personal connection with the WV State Real Estate Appraisal Board.” And then its just a hop, skip, and a jump from there to ask for money to join to which they go into great detail.

[58]

What’s disturbing about this association, is that seems to be no purpose for it other than selling access. There are no resources and no events provided on their official website…just access?

Isn’t this presentation the very definition of selling access to a state government agency?

The Cosmic Cobra Guy Takes Aim At West Virginia RE Appraiser Board Self-Dealing

Here’s Jeremy’s press release:


Contact: Jeremy Bagott, MAI, AI-GRS Tel: 805-794-0555 jbagott@gmail.com

*** FOR IMMEDIATE RELEASE ***

WEST VIRGINIA REGULATORS RECEIVED FREE TRIPS FROM PUBLISHER WHOSE CAUSE THEY FAVORED

(December 30, 2021) – Quid pro quo is hard to prove, but state regulators accepting all-expense-paid trips from a Beltway publisher whose copyrighted standards the regulators were found to have unlawfully adopted and enforced, creating a benefit for the gift-giver, must come close.

From 2010 to 2019, a tiny Washington, D.C., publisher known as the Appraisal Foundation [59] provided tens of thousands of dollars in free airfares, hotel rooms, meals, course materials and other things of value to seven West Virginia state workers and political appointees associated with the West Virginia Real Estate Appraiser Licensing and Certification Board. During that time, the same personnel, according to a state legislative auditor’s report [60], violated state law in a way that benefitted the publisher by streamlining use of the publisher’s standards at the expense of state licensees. In addition, four of the regulators – current and former appointees to the board – failed to disclose the gifts in required filings with the West Virginia Ethics Commission.

More concerning, federal grant money earmarked for the states was diverted to the publisher, which used the money to fund the all-expense-paid travel lavished on state workers. The practice has now been stopped, but no one has yet been held accountable for approximately $2.7 million that was spent to promote the publisher’s copyrighted standards among state workers. A federal statute required this money to be sent directly to the states. Instead, it was diverted to the publisher ostensibly on behalf of the states.

The free travel, to places like Tampa, Florida; Chicago; San Diego; San Antonio; Raleigh, North Carolina; and Scottsdale, Arizona, promoted the publisher’s products. Seven West Virginia state employees and appointees received more than $25,000 in all-expense-paid travel and other things of value from the publisher. During this time, the board enforced the publisher’s continually changing code of conduct known as the “Uniform Standards of Professional Appraisal Practice [61]” on licensees without a notice-and-comment rulemaking for each new version as state law requires.

The publisher, which maintains corporate partners and members of lobbying groups sit on its board, sells copies of its fluid code of conduct to about 80,000 captive real estate appraisers in all 50 states. The appraisers must purchase, at monopoly pricing, new versions of the standards, along with proprietary courses and course materials, to retain their licenses.

A recent Freedom of Information Act request to the federal agency that diverted federal grant money to the 501(c)(3) publisher over a nine-year period showed that state workers in West Virginia, Texas and California took advantage of the free travel. California’s top ethics watchdog has now opened an investigation into that state’s Bureau of Real Estate Appraisers for the agency’s failure to retain its employees’ financial disclosures for the required seven years. California state employees also failed to disclose the free travel.

In West Virginia, the rogue board’s activities muzzled all citizens of the state. By neglecting its statutory obligations, the board effectively made the Washington, D.C., publisher a fourth branch of government in the Mountain State.

Below is a round-up of who benefited from the free travel, by how much and where they went:

Dean Dawson, Board Member
Dawson accepted an all-expense-paid trip to Tampa to attend a course June 4-6, 2018, offered by the publisher, records show. For that trip, he received an estimated $1,323 in airfare, course fees, lodging, food and other things of value from the 501(c)(3) publisher.

The following year, he accepted another free trip to Tampa to attend a course July 15-17, 2019. For that trip, he received an estimated $1,854 in airfare, course fees, lodging, food and other things of value from the publisher, records show.

All told, he received an estimated $3,177 in cash, travel and things of value from the publisher during a period in which the board was found to have acted unlawfully in a way that championed the cause of the publisher. In his Financial Disclosure Statements filed with the West Virginia Ethics Commission, Dawson declared having received no reportable gifts in calendar years 2018 and 2019. His disclosure statements, and those of the following three board members, can be viewed here.

Patricia Pope, Board Member
Pope accepted an all-expense-paid trip to Kansas City to attend a course April 15-18, 2019, offered by the publisher, records show. For that trip, she received an estimated $2,163 in airfare, course fees, lodging, food and other things of value from the 501(c)(3).

Several months later, she accepted another free trip to Tampa, to attend a course July 15-17, 2019. For that trip, she received an estimated $2,008 in airfare, course fees, lodging, food and other things of value from the publisher, records show.

Again that year, she accepted free travel to Portland, Oregon, to attend a course September 16-18, 2019. For that trip, she received an estimated $2,537 in airfare, course fees, lodging, food and other things of value from the publisher, records show.

All told, she received an estimated $6,708 in cash, travel and things of value during a period in which the board was found to have acted unlawfully in a way that benefitted the publisher. In her Financial Disclosure Statement filed with the West Virginia Ethics Commission, Pope declared having received no reportable gifts in calendar year 2019.

Rachel Phillips, Board Member
Phillips accepted an all-expense-paid trip to Tampa, May 8-10, 2017, to attend a course offered by the publisher, records show. For that trip, she received an estimated $1,225 in airfare, course fees, lodging, food and other things of value.

She later accepted more free travel to Tampa to attend a course July 10-12, 2017. For that trip, she received an estimated $1,600 in airfare, course fees, lodging, food and other things of value from the publisher.

She accepted additional free travel to Tampa to attend a course December 4-6, 2017. For that trip, she received an estimated $1,619 in airfare, course fees, lodging, food and other things of value from the Beltway publisher.

All told, she received an estimated $4,444 in cash, travel and other things of value from the publisher during a period in which the board was found to have acted unlawfully in a way that championed the cause of the publisher. In her Financial Disclosure Statement filed with the West Virginia Ethics Commission, Phillips declared having received no relevant gifts in calendar year 2017.

Nathan Nibert, Board Member
Nibert accepted an all-expense-paid trip to Tampa to attend a course June 4-6, 2018, offered by the publisher, records show. For that trip, he received an estimated $1,298 in airfare, course fees, lodging, food and other things of value from the 501(c)(3). In his Financial Disclosure Statement filed with the West Virginia Ethics Commission, Nibert declared having received no reportable gifts in calendar year 2018.

Sandra Kerns, former Executive Director
Kerns accepted an all-expense-paid trip to Chicago, September 29 – October 1, 2011, to attend a free course provided by the publisher, records show. For that trip, she received an estimated $1,642 in airfare, course fees, lodging, food and other things of value from the publisher.

Also, during the board’s period of noncompliance with West Virginia administrative law, she accepted a free trip to Salt Lake City to attend a course from April 20-22, 2015, put on by the publisher. Records show she received an estimated $1,778 in airfare, course fees, lodging, food, course materials and other things of value for the second trip.

Altogether, she received an estimated $3,420 in cash, travel, food, lodging and other things of value. Her LinkedIn page indicates she is no longer with the West Virginia Appraiser Licensing and Certification Board.

Mary Downey, Legal Counsel
Records show Downey accepted an all-expense-paid trip to Chicago to attend a free course offered by the publisher August 27-29, 2018. The course promoted the publisher’s copyrighted standards, which, according to the state’s Legislative Auditor, was unlawfully enforced. For that trip, she received an estimated $1,651 in airfare, course fees, lodging, food and other things of value from the Beltway 501(c)(3) publisher.

Darlene Washington, Legal Counsel
Washington accepted an all-expense-paid trip to San Antonio, Texas, March 9-11, 2015, to attend a course offered by the 501(c)(3) publisher, records show. For that trip, Washington received an estimated $1,627 in airfare, course fees, lodging, food and other things of value from the publisher.

The following month, Washington accepted free travel to Salt Lake City to attend a course April 20-22, 2015, put on by the publisher. For that trip, she received an estimated $1,612 in airfare, course fees, lodging, food and other things of value.

Less than a year later, she accepted a free trip to Raleigh to attend a course September 28 – 30, 2015, put on by the publisher. Records show she received an estimated $1,263 in airfare, course fees, lodging, food, course materials and other things of value from the Washington, D.C., publisher.

All told, she received an estimated $4,502 in cash, travel and things of value during a period in which the board was found to have acted unlawfully in a way that benefitted the publisher.

During the spring of 2021, Legislative Auditor John Sylvia directed the West Virginia Legislative Performance Evaluation and Research Division [62], more commonly known as “PERD,” to investigate the occupational licensing board for possible noncompliance with West Virginia Code §30-38-17 [63], which requires a state-prescribed public hearing or public comment period be held in order to adopt new editions of the copyrighted “Uniform Standards of Professional Appraisal Practice.”

A legal opinion sought by Sylvia determined that a state notice-and-comment process is required prior to the adoption of each amended version of the privately held code of conduct. PERD found that public hearings were once held but that the board has not complied with West Virginia state law since 2009. State workers began accepting the free travel from the code’s private publisher in 2011. That continued through 2019. Sylvia’s findings on the board’s failure to comply with West Virginia Code §30-38-17 were published in the recent report.

Then there is the failure to disclose the gifts. Members of West Virginia state boards, commissions, and agencies who are appointed by the governor must file a Financial Disclosure Statement reporting gifts, including meals and beverages, or anything with $100 or more in monetary value, from a person, business or organization that has a direct and immediate interest in governmental activity over which the board member has control. Any person who knowingly fails or refuses to file a required Financial Disclosure Statement is guilty of a misdemeanor pursuant to West Virginia Code §6B-2-10(c) [64].

The board has been violating West Virginia law in other ways, as well. In 2017, it was discovered the board had hired unauthorized individuals as de facto board members. Board members were believed to have effectively delegated their duties to doppelgängers.

Wrote state Delegate Gary G. Howell, chair of the Joint Committee on Government Operations: “The West Virginia Real Estate Appraiser Licensing & Certification Board [has] violated the law by hiring persons specifically barred from being employed by the board, because it created a conflict of interest. It was suggested this violated the state constitution, as [only] the governor is tasked with appointing board members with the approval of the Senate.”

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Here is something you can do (you need not be a licensed appraiser in West Virginia to take action):

Complaint Contact #1: Contact John Sylvia, West Virginia’s Legislative Auditor, at 304-347-4890, or email him at john.sylvia@wvlegislature.gov. Please be courteous to Mr. Sylvia. He is one of the good guys in this saga. If you email him, you can use the following suggested text. Also, forward the entirety of this press release with the email.

Title: Please Investigate Free Trips for West Virginia Appraiser Licensing and Certification Board Workers

Message: I would like the West Virginia Legislative Performance Evaluation and Research Division to open a new investigation into the way a Washington, D.C., publisher purchased trips for West Virginia state workers and political appointees to promote the use of the publisher’s continually changing copyrighted standards that were then sold to a captive group of West Virginia citizens at monopoly pricing and enforced without a legal adoption from 2009 to the present. This practice violates the will of the West Virginia Legislature by subverting a statute. It also violates the nondelegation doctrine in the state’s constitution.

Please focus on new information indicating a potential quid pro quo between state personnel and the Washington, D.C., publisher. Your office recently found the state board failed to comply with West Virginia Code §30-38-17, which requires a state-prescribed public hearing or public comment period be held in order to adopt each new version of the publisher’s copyrighted “Uniform Standards of Professional Appraisal Practice.” Meanwhile, the same state personnel accepted free trips provided by the publisher, which derived a benefit from the board’s unlawful adoption of the code in the state. The privately owned and continually changing code was sold to captive state licensees at monopoly pricing during the time that board members and executive leadership received free travel from the publisher.

Complaint Contact #2: Contact the West Virginia Ethics Commission, at 304-558-0664, or email the commission at ethics@wv.gov. If you email them, please forward the entirety of this press release.

Title: Please Investigate Unreported Travel Provided to State Board Members

Message: I urge the West Virginia Ethics Commission to initiate a complaint under its own power to do so in cases in which it receives credible evidence of a material violation of the West Virginia Ethics Act. I ask you to investigate whether four current and former members of the West Virginia Appraiser Licensing and Certification Board have committed a material violation pursuant to the statute in failing to disclose free airfares, lodging, meals and other things of value from a Washington, D.C. 501(c)(3) publisher known as the Appraisal Foundation. Any person who knowingly fails or refuses to file a required Financial Disclosure Statement is guilty of a misdemeanor pursuant to West Virginia Code §6B-2-10(c).

This request builds upon a recent finding by the West Virginia Legislative Auditor’s Office that West Virginia Appraiser Licensing and Certification Board workers and political appointees have unlawfully adopted and enforced the publisher’s copyrighted code of conduct since 2009. This provided a benefit to the publisher by excluding citizens of the state from a required notice-and-comment process and streamlined use of the privately owned and continually changing code, which were sold to captive state licensees at monopoly pricing.

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Jeremy Bagott, a licensed appraiser and former newspaperman, sends up a warning flare in his 2019 book [65] “Dispatches from the Cosmic Cobra Breeding Farm.” He takes the reader deep inside a tiny Washington, D.C., foundation that has managed to have its copyrighted code of conduct enshrined in federal and state law. All 50 states, even the U.S. territories of Guam and the Northern Mariana Islands, now enforce it. The nonprofit, known as the Appraisal Foundation, has parlayed the arrangement into a lucrative publishing cartel. In his journey, the author uncovers a troubling trend deep in the plumbing of government.

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-END-


OFT (One Final Thought)

I stumbled on this nugget and wondered how many takes were needed because the gestures and mannerisms were absolutely perfect.


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 [72]. And be sure to share with a friend or colleague if you enjoy them because:

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 next week’s Housing Note.

See you next week.

Jonathan J. Miller, CRP, CRE, Member of RAC [73]
President/CEO
Miller Samuel Inc. [74]
Real Estate Appraisers & Consultants
Matrix Blog [75] @jonathanmiller [76]

Reads, Listens and Visuals I Enjoyed

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Recently Published Elliman Market Reports

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