Matrix Blog

Here is an interview I recently did for Bloomberg Television’s In The Loop on the first phase of the long awaited and sorely needed Second Avenue subway line. I had also looked at this data about two years ago.

For the show I crunched closed sales data for the 4th Quarter of 2013 versus the same period in 2009 and provided a similar time frame for the rental market. I defined the impacted subway zone as the Upper East Side neighborhood between Third Avenue and First Avenue extending from 96th Street to 59th Street. Areas out side the zone were simply those to the east and west of it but within the neighborhood. I realize that simply taking the average price of all transactions in each of the zones are subject to skew. However given the large size of the zones, I think it is a reasonable way to extract some sort of impact.

Based on the results, the subway zone fell behind the areas outside the zone during the 4 year time span.

West of Zone
Sales Prices +14.7%
Rental Prices +7.7%

East of Zone
Sales Prices +12.2%
Rental Prices +9.1%

Tags: Bloomberg TV, Second Avenue Subway

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I’m headed to Miami this week to speak at the Urban Land Institute’s Miami Condo Market Symposium: Embracing Boom & Bust Cycles. Based on the speaker list, it promises to be an informative event.

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On Friday I taped an interview with Christine Romans, host of CNN’s Your Money on the housing recovery and why rising mortgage rates aren’t necessarily a bad thing. She’s a very engaging interviewer – plus it’s always fun to visit the studio.

This clip captures a large part of the interview – there were three more Q&A volleys on the televised broadcast omitted in this clip – they’ll be airing them in other segments.

Tags: CNN, Christine Romans, CNN/Money, Television

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Yesterday’s release of the Case Shiller Index prompted a flurry of coverage given the 20-cities’ highest YoY increase in 7-years. I did a three way split interview from a remote location in CT (see studio set up below). I was a guest along with Vincent Reinhart, chief US economist at Morgan Stanley and Stan Humphries, chief economist at Zillow Inc. Betty Liu and Adam Johnson kept the conversation going.

I especially liked Stan’s modification of the Case Shiller Index results which excluded foreclosures and his research on low and negative equity (my explanation for low inventory right now). The drop in foreclosure activity over the past year caused significant skew to the mix. According to Stan the index would show roughly a 5% increase YoY rather than an 10.9% increase. A huge difference and yet another reason why this index does more harm than good to our understanding of the housing market.

Vincent’s observation that seasonality is considered in Case Shiller is basically wrong – not technically wrong because the data is seasonally adjusted. However the methodology of a repeat sales index washes out seasonality. If you look at the Case Shiller chart, there hasn’t been “seasons” in housing since 1987. That’s simply not true. The Case Shiller Index does not reflect annual housing cycles.

Since Case Shiller Index lags the signing of contracts by 5-7 months, expect to see much higher YoY results this summer.

How the sausage is made

Bloomberg TV is always great to work with – they arranged for me to use a remote studio in CT through a third party. Here is what the studio looks like. Amazingly primitive but it works!

Tags: Case-Shiller, Stan Humphries, Bloomberg TV, Zillow, Seasonal Adjustment

Comments Off on Talking Case Shiller on Bloomberg TV’s ‘Street Smart” with Betty Liu/Adam Johnson

Had a fun interview with Tom and Sara this morning on the always MUST watch/listen Bloomberg Surveillance. We talked housing, rentals, vacancy and inventory. An added bonus was the addition of Adam Davidson – co-founder and co-host of Planet Money as guest anchor. I’m a huge fan of his show. Even bought their t-shirt last week through Kickstarter.

More importantly, I’m still the mayor of the Bloomberg Cafeteria on FourSquare.

Tags: Tom Keene, Sara Eisen, Bloomberg TV, Bloomberg Surveillance

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Mary Thompson of CNBC did a nice job capturing the state of the Manhattan housing market using the release of our Douglas Elliman Manhattan Sales Report for 1Q 13. I spoke to her and also ran over to 30 Rock and provided some commentary to producer Stephanie Dhue on camera. The differing results between our report and a competitor were handled perfectly.

In addition to the Sqwawkbox on the Street clip above, here’s a different clip that ran on Power Lunch. Good stuff.

Tags: CNBC, Mary Thompson

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Should be fun.

They tell me it is sold out and there is a waiting list, but just in case…

Tags: Recovery, REBNY

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Had a great visit with Tom Keene this morning on Bloomberg TV’s Surveillance along with Scarlet Fu and Sara Eisen. It was simulcast on Bloomberg Radio.

Also in studio was James Lockhart, vice chairman of WL Ross & Co., formerly the head of GSE regulator FHFA. We were also joined by Nicolas Retsinas, a senior lecturer in real estate at Harvard Business School who called in – he has been on my old podcast a few times. Both provided great insight to the housing narrative.

Here’s the second clip from the same session. My basic premise is that while new home sales are rising, it will not be enough to address the collapse of listing inventory which will drive housing prices higher in the US. Hint: It’s mostly about tight credit. Housing is local and credit is national.

Tags: Tom Keene, Sara Eisen, Scarlet Fu, Bloomberg Surveillance, FHFA, Nicolas Retsinas, James Lockhart, GSE, Radio

Comments Off on On Bloomberg TV, Surveillance w/Tom Keene 3-11-13: Housing, Mortgages, Rising Prices

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For Jhoanna Robledo’s story: “Splitting the Rent, Fair and Square: Appraiser Jonathan Miller calculates how to divvy up the bill based on a typical two-bedroom, $3,200-a-month apartment.” in this week’s real estate feature piece in New York Magazine The Art of Roommating, I attempt to give some logic on how to fairly allocate the rent to 2 people sharing a 2-bedroom, 2-bath Brooklyn apartment.

Gotta love the first comment made on the web site:

…or if you’re friends you could split it evenly. just saying.

Splitting the Rent, Fair and Square [New York Magazine]

Tags: New York Magazine, Jhoanna Robledo, Floor Plan

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Andrew Siff, a reporter for WNBC Channel 4 in New York did a great job articulating the tight inventory phenomenon we are seeing in both the region and nationally.

Tri-State Real Estate Market Under Tightest Squeeze in Years [WNBC Channel 4]
Listing Inventory Is, Well, Listing [Matrix]

Tags: Andrew Siff, WNBC, Television

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The New York Times Real Estate goes gonzo this weekend with a nice write-up AND a large color artwork on perhaps the least understood part of the home buying process.

No not the radon test…

The appraisal. Can’t live with them, can’t live without them.

Here’s my stream of consciousness on the topics brought up in the article:

• “Sale and “Comparable” are not interchangeable terms. Really.
• There is no ratings category for (like totally) “super excellent.” The checkboxes provide good average fair poor with “good” at top end (but fear not, “super excellent” is marked “good” and like total adjusted for).
• Not all amenity nuances that are important to you as a seller (ie chrome plated doorknobs), are important to the buyer.
• Not all amenity nuances that are important to you as a seller, are measurable in the market given the limited precision that may exist.
• Not all appraisers have actually been anywhere near your market before they were asked to appraise your home, so technically they shouldn’t be called appraisers. Since their clients don’t seem too concerned about this, something like “form-filler” seems more appropriate.
• Most appraisers who work for appraisal management companies are not very good, but some actually are.
• When an appraiser makes a time-adjustment for a rising market, understanding whether a bank will accept that adjustment or not is (should be) completely irrelevant and quite ridiculous (unless they are “form-fillers” and not actual appraisers). I have always believed that the appraiser’s role is to provide an opinion of the value and that occurs in either flat, rising or falling markets.
• HVCC was a created with best intentions by former NY AG Cuomo by attempting to protect the appraiser from lender pressure, but it has literally destroyed the credibility of the appraisal profession by enabling the AMC Industry.
• The 12% deal kill average of an AMC an arm’s length sale properly exposed to the market is absolutely an unacceptably high amount and a major red flag for appraiser cluelessness about local markets.
• I’ve never heard of a major bank since the credit crunch began who would throw out the original appraisal found to have glaring errors that would severely impact the result. My quote on this nailed that sentiment with brutal precision, if I do say so:

“You have a better chance of winning Powerball than getting a lender to abandon the first appraisal.”

Understanding the Home Appraisal Process [NY Times]

Tags: New York Times, Appraisal Management Companies, HVCC, AMC, Pizza

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I joined Dan Gross for my monthly visit on his “The Number” segment talking about the general improvement in the US housing market, FHA’s possible pending implosion and what’s in store for the market in 2013.

Always fun.

Tags: Dan Gross, BeastTV, FHA, Television

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