Dog-Paddling While Sheltering in Place: Housing Edition

Because we all need a little joy in our house-bound lives, especially now.

But I digress…

The Elliman Report for Manhattan Sales Q1-2020 presents the market before and after the virus

As my readers know, I’ve been writing the expanding Douglas Elliman report series since 1994. One of the challenges of presenting this particular first-quarter report is that most of the metrics represent sales that closed in the quarter, which meant that their contracts were likely not signed in the last two weeks of March.

But the problem with over-relying on contract data is that contracts blow up in times of duress. During the financial crisis, NAR indicated that blown contracts accounted for as much as 40% of pending sales at one point. The other challenge with contract data is that most assume it is real-time, but it actually lags the “meeting of the minds” between buyers and sellers on price and terms by two to three weeks. Once the terms are agreed to in principle by the buyers and sellers through their real estate agents, the attorneys hash out the details, and then the documents are signed.

The only data that reflects the last two weeks of the month was reflected in the following chart on Bloomberg, and we all know my affinity for charts. This one was in the top twenty most-read articles by the 350K Bloomberg Terminal subscribers.

Manhattan listing inventory generally rises from year-end to the end of March (quarter over quarter). For the first time since 2007, listing inventory declined during this period.


Elliman Report: Manhattan Sales Q1-2020

Final two weeks of March 2020
– Awareness of the global pandemic known as COVID-19 cooled conditions after two significant rate cuts by the Federal Reserve and the statewide shutdown of non-essential businesses.
– Current sales contract activity does not account for the market impact of the coronavirus yet since it lags the “meeting of the minds” by 2-3 weeks
– Listing inventory fell quarter over quarter in the first quarter for the first time since 2007
– If the outbreak is not prolonged, there is still potential for a release of pent-up demand, but this depends on the extent of damage done to the economy.

New Year 2020 through mid-March 2020
– The number of sales jumped year over year after two straight quarterly declines
– All three overall price trend indicators declined annually for the third straight quarter
– Re-sale listing inventory fell year over year for the first time in ten quarters
– All luxury price trend price indicators declined year over year for the second straight quarter
– Largest year over year increase in new development closings in two and a half years


Elliman Report: Northern Manhattan Sales Q1-2020

Co-ops & Condos
– The number of sales surged, rising year over year for the third time in four quarters
– Median sales price jumped year over year for the first gain in three quarters

– Median sales price declined annually for the third straight quarter
– Listing inventory declined for the first time in two years

Bloomberg Radio MIB: Jonathan Miller on Real Estate After the Coronavirus

I joined my friend and Bloomberg Radio host Barry Ritholtz to talk about the housing market before and after the Coronavirus crisis on his must-listen radio and podcast show Masters in Business. This has been my third time on the show since 2014, and its always fun to do.

[click on image to play]

Shelter in Place Is The Fastest Way To Help The Economy/Housing Market Recover

One of the biggest mistakes many Americans are making is to assume high-density locations will be where the bulk of the damage is done by the virus. A friend of mine and appraiser in rural Montana is running into situations with infected homeowners. There are houses in the middle of nowhere that have occupants with an infection. The following map uses cell phone data, presumably the same data that powers traffic feedback on Google Maps, to show how many parts of the country are not changing their daily routines.

I’d suggest those reluctant to change their routines or to believe there is a crisis, look at it another way (setting aside those that have no choice, obviously). If you are in a rural location and think you are safe, you might want to look at NYC right now as a preview of what you will see in a few weeks. Home sales may be going gangbusters right now where you live/work but that may stop as the virus will be much more widespread, low mortgage rates or not.

Here’s a map of where consumers are staying at home.

[Click on image from NYTimes to explore the visualization]


And another take on social distancing – a spectacular visualization from Reuters that shows correlations with household income and age. Not everyone is able (or willing) to social-distance.

Click on the image and scroll through all the content – it is incredibly well done.


Here’s a good article from the Economist: Lessons from the Spanish flu: social distancing can be good for the economy

Data from the 1918 pandemic in America suggest that places with the tightest restrictions fared best

Incidentally…a little trivia

The Allies of World War I came to call it the Spanish flu, primarily because the pandemic received greater press attention after it moved from France to Spain in November 1918. Spain was not involved in the war and had not imposed wartime censorship.

Bloomberg Radio: Surveillance – ‘Jonathan Miller…details how the housing market is dealing with fallout from the coronavirus.’

I spoke with Tom Keene and Lisa Abramowicz on Bloomberg Radio’s morning show “Surveillance” on the state of the housing market.

The full segment is a great listen. My interview starts at 21:33.

[click image to play]

Bloomberg TV: Markets – ‘Manhattan Home Sellers Hold Back Listings During Coronavirus’

I joined network Vonnie Quinn in New York to talk about the state of the market since the coronavirus hit. She is always wonderful to speak with. The stock photo they used for me was taken about 15 years ago (when I was 15, obviously). At the last second, they had me speak through their London bureau for technical reasons, so each question and answer saw a small delay. The interview was based on this Bloomberg article: Manhattan Home Sellers Hold Back Listings in Coronavirus Retreat:

From The Matrix Blog: Elliman Magazine: 8 Regional Housing Market Charts

Before the virus outbreak, I whipped up eight charts for Elliman Magazine using data from our expanding Douglas Elliman Market Report Series to touch base on a wide array of U.S. housing markets. These charts appeared on pages 280-282 in the 2020 Spring/Summer edition of Elliman Magazine. Click on each graphic to expand.

From The Matrix Blog: Staying Put Locally = Saving Lives Globally

Visual Capitalist created a terrific infographic of 41 cities around the globe, comparing the outbreak trend against the commuter activity trend. Incredible


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

After last week’s blowout record amount of content, I’ve focused on the world outside of Appraiserville this week, and a lot of is still relevant to appraisers.

Back next week.

OFT (One Final Thought)

NSFW This clip is a reminder for all of us on how to be safe and prevent the spread of the coronavirus. Although it is NSFW, I would think many of our readers are actually at home, so lets rate it NSFH and keep the kids out of earshot:

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 better at social-distancing;
– You’ll wash your hands for 20-seconds many times;
– And I’ll continue to stand in front of my refrigerator.

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
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog

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