Housing Enters Its “Bad Movie” Era

Please define “bad movie” for me because the following is great – a precursor to Sharknado.

But I digress…

Bloomberg’s Masters In Business Podcast: Jonathan Miller on Urban Real Estate

My Bloomberg Radio interview with Barry Ritholtz came out shortly after last week’s issue of Housing Notes. Apparently I am tied with Scott Galloway for most appearances (5) on this show. Master in Business is always a great show to listen to and Barry does a lot of reasearch on his guests.


Here’s the transcript.

Rising NYC Wages Seem To Support NYC Rent Growth

One of the problems with looking too narrowly at a housing market record, such as record rental price growth in NYC, is that you can miss the reason why and the understanding there is more room for more records.

Last month Douglas Elliman published our rental price research for The Elliman Report: May 2022 Manhattan, Brooklyn & Queens Rentals. It showed that the median rental price reached the $4,000 threshold for the first time, an all-time record. And I suggested there was more room for gains since new leasing doesn’t peak until August and therefore more opportunities for upward pressure exist.

But what about wages? Going to FRED, I compared NYC annual wages over the past decade against median rent and indexed Manhattan and Brooklyn to January 2008. For NW Queens I indexed to December 2011 because that was the extent of our data.

The following charts by borough show that there is more room for gains since wage gains remain higher than rent gains with Brooklyn seeing the least wiggle room. This doesn’t mean that rents are “affordable” but provides an argument that the market can probably absorb more rental increases. Any thoughts on this would be appreciated.

Visual Capitalist: Mapping Price Growth By State

Visual Capitalist always puts out some amazing infographics. Click to expand:


MARKET PROOF PODCAST WITH ARPIT GUPTA “Work From Home and the Office Real Estate Apocalypse”

Kael Goodman, founder/CEO of Marketproof interviews NYU Professor Arpit Gupta over his white paper: Work From Home and the Office Real Estate Apocalypse

Arpit’s white paper is a must-read for all real estate appraisers and brokers, especially those focused on commercial valuation. Kael does a great job on the interview.


EXPLAINER Rent Guidelines Board Increases

Natalie Sachmechi, a real estate reporter for Crain’s New York, is always good to follow on Instagram for bringing clarity to complex New York City real estate issues.

I meant to post this last week but was not very organized when we were away on vacation!


Sean Osher of Core Real Estate On Measuring Trends (Why I Was Right)

Recently I was a panelist for a REBNY virtual event with a bunch of other people I respect who track the state of the housing market and I remember thinking to myself: “real estate agents will get it but this conversation has to be very confusing to the consumer.” One of the items that always comes up by authors of contract reports is that closing data lags contracts therefore contract trends are the gold standard. The problem with this presumption is that there are many market periods where as many as 40% of contracts fall apart before they can close. That’s a tough sell as a full-proof market benchmark.

Former top-producing Douglas Elliman agent Sean Osher publishes Padkos: Food for Thought in Real Estate and Life, a weekly newsletter that was recently shared with me so I of course, subcribed. Sean left Douglas Elliman in 2005 to form Core Real Estate.

At that time, the company I was with had the only legitimate market report in the business, which was created by Jonathan Miller. Jonathan was the only legitimate analyst in the city and was (and still is) rightfully well respected and revered.

Of course, he’s obviously brilliant for saying that about me (ok, ok), but he also has a lot of thoughts about market analysis in his post “Data Dump!” specifically why “tracking transactions in real-time is impossible:”

A real estate trade is impossible to track in real-time because of the way deals happen. First, a home has an asking price, then there is a negotiation between the buyer and the seller, then there is a meeting of the minds, then a contract is signed, and then there is a closing. Months later, the transaction is made public on ACRIS.

My take: Ultimately closing price trends contain both sales levels and price levels because they represent a “successful” transaction.

Data Dump! [Padkos]

Rural Housing Markets Are Booming

The Wall Street put out a fascinating piece on the rural boom and wonders whether it will last:

Rural Counties Are Booming, but Can It Last? The pandemic and the work-from-home movement sparked an economic resurgence in sparsely populated areas as workers fled big cities

Such rural gains are in their early stages and could be vulnerable to a national economic downturn. They also depend on how far the back-to-the-office movement goes. In recent months, office reopenings and waning pandemic disruptions have drawn some workers back to urban life, a trend that is manifested in the rising rental prices of places such as New York City.

There’s a good piece by FreddieMac on the related urban phenomenon:

In Pursuit of Affordable Housing: The Migration of Homebuyers within the U.S.—Before and After the Pandemic

Please study this chart:


CoreLogic’s 2022 Hurricane Report

CoreLogic just published a 2022 Hurrican report that correlates housing stock to storm damage. Its a free download and its full of charts and maps. Of special note, Corelogic’s Chief Economist Frank Nothaft, whose work I respect, unexpectedly passed away this weekend.


JP Morgan on the Fed: One More Big One, Then A Bunch Of Small Ones To 3.5%

The Fed has chosen to front-end load rate increases in order to better clobber the economy with a baseball bat. This is probably better for the housing market than a tortuous slog of 25 basis point increases from day 1.

This JP Morgan research piece Market Outlook: Stocks, Inflation And Commodities In Focus At Mid-Year was insightful on rates.

NTD TV Interview (From My Hotel Room) On Weakening Market Conditions

I’ve been doing interviews for NTD for quite a while. This time I was in a hotel room on vacation and got an interview request – I grabbed a collared shirt while still in my shorts and tennis shoes and sat in my poorly lit hotel room. Still, it was a good interview.

Getting Graphic


My favorite charts of the week made by others

Appraiserville

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

I’m still not ready to dive back into appraisal commentary – too much going on right now as proud owner of two homes and two mortgage payments for the next 30 days (2x the American Dream!) and moving our office two blocks in Manhattan.

OFT (One Final Thought)


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 be in the bat cave;
  • You’ll buy shark repellent;
  • And I’ll continue to skip most good movies.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller

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