Rising Waters: Realtor Signs, Cockroach Milk and Plastic Straws
We’re flooded (save that term for later in these notes) with new insights:
- The little sign that could: New Jersey Realtor sign thinks globally and never gave up looking for land.
- Vanity has no bounds: Is Cockroach Milk is the new thing?
- The last straw: Apparently, plastic straws are really bad for the planet. Since I was little, I’ve always avoided using straws, thinking that my sense of smell helps make a chilled glass (the heavy kind from a diner) filled with chopped ice and Cherry Coke tastes better without using one.
So it’s sometimes better to focus what’s immediately in front of you for your own survival as you navigate your way down the path (this is deep).
WATCH: Mountain biker races to victory in downhill race in Chile https://t.co/3DZMTkf2GE pic.twitter.com/yJTrqs66NL— Reuters Top News (@Reuters) March 31, 2018
But I digress…
Flooding the Housing Market
For some reason, this week seemed to see a lot of coverage on the impact of climate change on the housing market and that the Northeastern U.S. was the most vulnerable. We seem to be lousy with water.
- Rising Risks: Waterfront real estate in Boston rises in the face of stronger storms [CNBC]
“In Boston, we’ve spent a lot of time thinking that these impacts are 20, 30 years down the road,” said Deanna Moran, director of environmental planning at Boston’s Conservation Law Foundation. “The last couple of nor’easters that we’ve had have made it very clear that these storms are here now. They’re happening more frequently. They’re more severe.”
- Underestimated Flood Risk Could Crash the American Housing Market [Citylab]
The two economists undertook a door-to-door survey of properties throughout Rhode Island and found that 40 percent of flood zone respondents were “not at all” worried about flooding in the next 10 years, even though the average property in their sample has a one-in-seven chance of flooding annually after just one foot of sea level rise.
- Miami’s condo king breaks silence on sea level rise comment: ‘Maybe I had too many drinks’ [Miami Herald]
When author Jeff Goodell approached developer Jorge Pérez during a party at the Pérez Art Museum to ask him if sea level rise had changed his approach to building, the chairman and CEO of The Related Group replied: “In 20 or 30 years, someone is going to find a solution for this. Besides, by that time, I’ll be dead, so what does it matter?” A few years ago I moderated the main panel at ULI Miami and asked about the impact of climate change and got a similar shrug. It looks like awareness of the adverse impact of it on the U.S. housing stock has only recently become a front-burner concern.
For the 1/3 of Americans that don’t believe in climate change, consider going on vacation to South Beach in Miami or Norfolk, VA at high tide when it is raining. You’d be surprised how much flooding is occurring on a daily basis that wasn’t happening a decade ago. Whatever the cause, housing development has to consider it as the consumer becomes more and more aware of it.
Walkup Apartments Have Built-in Health Clubs
There was a good Wall Street Journal piece this week: Step by Step, New York City Walk-Ups Climb the Price Ladder. In the appraisal of walk-up apartments throughout my career, I have always marveled at those who live on the fifth floor (and a few 6th floors) of a building without an elevator. Just imagine the scenario where you bought groceries for dinner and forgot the avocados (this is a hipster tale) so you trudged downstairs to the corner store to retrieve the avocados. When you arrive back to the apartment, a little out of breath, you realize you don’t have enough wine so you turn around and trudge back downstairs….
On the bright side, you will become super organized and heavily dependent on “to do” lists. I suspect you’ll love the solitude and the greater natural light that a lower floor apartment might not enjoy.
If the above photo looks familiar, its because these twin tenements located at 96 and 98 St. Mark’s Place between First Avenue and Avenue A in Manhattan graced the cover of Led Zeppelin’s Physical Graffiti album in 1975 (the first record I ever purchased).
In our research, we find that a lowrise building with an elevator sees roughly a 1% or possibly 2% rise in value per floor above the second floor with a much large jump from the first floor to the second floor. However, the floor level premium is reversed in a walk-up building and the per floor level adjustment is much larger than in an elevator building. We generally see value changes as much as 5% to 10% per floor in a walk-up. There are a number of types of walk-ups. Here are some blog posts I wrote about floor levels a while ago that were turned into infographics by various publications – click on the graphics for the posts and more links.
The Term “Appraisals” Bleeds Into The Term “Evaluations”
One of the reasons the appraisal industry has been so upset with our former industry leader, The Appraisal Institute, is that they don’t realize that they are destroying the meaning of the word “appraisal” by championing lower cost alternatives to appraisals, that actually are appraisals. It’s the organization’s tragic flaw and why they are now essentially irrelevant. Hopefully, that will change but its really up to the residential and commercial membership to champion new leadership.
But I digress…
This is why:
Here’s an “evaluation” product that is ordered as a “new appraisal assignment” for a lowball fee. The appraiser had two hours to respond and then it rolls over to the next appraiser on their list. Robo-ordering these evaluations to hundreds on an approved list is what the Appraisal Institute has helped make possible. Think about that.
Then think about your time. If the going rate for an appraisal in your area is $450 and you are willing to do an evaluation that perhaps takes half the time (just guessing and assume you are ethical) yet retains all the liability, is a fee reduced by 83.33% worthy of your hard earned years of expertise? Are you really just a form filler or are you a valuation expert?
It’s Been More Than 9 Months: How Is The Search For New Appraisal Institute CEO Going?
On August 24th, AI’s CEO Frank Grubbe resigned overnight without warning. It was announced then that second-time AI president Jim Amorin was to fill in as acting CEO until December 31, 2017. That date has come and gone without any notice to members as to the status of the search through their newsletters, website or emails that I am aware of. So much for transparency. It was widely held that once Grubbe had left the organization, the toxic culture he had either caused, enabled or allowed would subside.
No evidence yet.
AI used the executive search firm Tryon & Heideman LLC to find a replacement. At no time was an application filing deadline shared with the public on either the executive search site or the AI site that I can find.
I’m not a member of the Appraisal Institute but a few members I asked have reached out to have scoured the site and don’t see any information about it, not even a landing page. A little over a week ago, the Appraisal Institute removed mention of the search for the position from the home page. Since no deadline date was presented on the AI site, I can only assume that removal of the announcement from their home page was an indication that the search has ended.
- Pervasive toxic political culture still dominates the organization
- August 2018 CEO resigns overnight without warning after 11 years
- Two-time AI president fills interim CEO position
- Interim CEO position expires December 31, 2017, without discussion
- Announcement of CEO search removed from AI Home Page in May 2018
- Description of CEO position remains on executive search site without application deadline date
(Hey, how’s that residential committee doing?)
It is time for the AI membership to hold leadership accountable (you know, the group I’m told that regularly flies first class with their wives all over the world to attend valuation conferences and don’t share what they learn with the membership).
You need to contact your local chapters and put pressure on Chicago leadership to actually attempt to be transparent. If you don’t this organization will never recover, let alone survive, from its current state of irrelevance.
Appraiser “Accounts Receivables” Alert: CoesterVMS One Step Closer to Death?
Coester Chronicles Continued…
On May 25, 2018, Myriddian LLC filed a “Confessed Judgement” request against CoesterVMS.com Inc. Yesterday (May 31, 2018) the Baltimore County Circuit Court granted the “Order of Confessed Judgement.” Myriddian LLC is owned as a sole proprietorship and functions as a government contractor. The owner is Merlynn Carson, daugher-in-law of Ben Carson, current HUD secretary. This action, based on the earlier legal link, might be interpreted to mean that the creditor filed on behalf of the debtor to shortcut a lengthy litigation process.
Here’s a screenshot of the details.
And an explanation found on AppraisersForum.com:
This series of actions does make me wonder if CoesterVMS borrowed a lot of money from the Carson family and then defaulted. Given Carson’s proximity to the HUD cabinet secretary, this seems big league and ominous for the future of CoesterVMS, a notorious AMC. Appraisers who continue to work for them, despite all the available information about this AMC, that remain insistent on working for them: You’ve been warned.
Note: It’s not how much revenue you make as an appraiser that counts, it is how much you get paid. Over my career, I’ve always been amazed at how many in our profession seem to forget this basic rule of survival.
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 more accounts receivable orientated;
- You’ll drink more cockroach milk;
- And I’ll walk up more stairs.
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 Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog @jonathanmiller
Reads, Listens and Visuals I Enjoyed
- Miami's condo king breaks silence on sea level rise comment: 'Maybe I had too many drinks' [Miami Herald]
- Pending home sales fall more than expected as costs for buyers rise [CNBC]
- Rising Risks: Waterfront real estate in Boston rises in the face of stronger storms [CNBC]
- To buy an average home in San Francisco, you need 9-plus year’s of income [Curbed SF]
- Jerome Powell drops a major hint into the true state of the job market — and it suggests the Fed is making a big mistake [Business Insider]
- State Economic Monitor [State Economic Monitor]
- Underestimated Flood Risk Could Crash the American Housing Market [City Lab]
- White Flight Returns, This Time From the Suburbs [Governing]
- 62% Of Homeowners Don't Plan To Ever Move [Bankrate.com]
My New Content, Research and Mentions
- To Gauge Long-Term Health of a Real Estate Market, Look Beyond Sales Prices [Mansion Global]
- Golden era over for London property and things could get worse [The National]
- Real Estate Sales Smash Records On Nantucket As Wealthy Americans Buy Beach Houses [Forbes]
- Step by Step, New York City Walk-Ups Climb the Price Ladder [Wall Street Journal]
- Here's Why City Dwellers Have to Visit the Rockaways This Summer [Cottages/Gardens]
Appraisal Related Reads
- May Newsletter [DW Slater Company Appraisal Blog]
- Are Investor Flips Good Appraisal Comps? [Birmingham Appraisal Blog]
- Yes, appraisers do notice a lack of quality [Sacramento Appraisal Blog]
Extra Curricular Reads
- New York Today: The Scourge of Plastic Straws [NY Times]
- Why Cockroach Milk Is the New Health Obsession [Marie Claire]
- Yes, Cars Still Come With Stick—Here Are a Few New Favorites [Wall Street Journal]
- Sign Washed Away in Hurricane Sandy Lands on Beach in France [NY Times]
- Charlotte Fox, climber of the tallest peaks, survivor of 1996 Everest disaster, dies after an apparent fall at home [Washington Post]
- Why No One Answers Their Phone Anymore [The Atlantic]
- Counting the times Kevin Durant’s shoe came off during games [Flowing Data]
- 13 of the Craziest/Coolest Public Bathrooms [Architectural Digest]
- The Reporter Who Took Down a Unicorn [NY Mag]