Say “WUPPERTALER SCHWEBEBAHN” three times very fast to get you in the mood for the following issue of Housing Notes.
This photo was taken in 1913 and the railway is still in use.
This is tangible proof that we can solve problems if we actually try, even if we can’t say “WUPPERTALER SCHWEBEBAHN” very well.
Wonderful colourised film from 1902 of the WUPPERTALER SCHWEBEBAHN in Germany – still in use today and moving 25 million passengers every year.
— Michael Warburton (@MichaelWarbur17) August 5, 2022
The Final Shout Out To My Columbia Grad Students
My final class of the summer semester was held yesterday Columbia University campus this week, and my ±150 students learned an important lesson!
Best wishes to all – you’re participating in the terrific MRED program and I wish all of you success in your journey.
But I digress…
Despite The Slowdown In NYC Metro Sales Volume, New Listings Are Falling
I’ve been the author of an expanding series of market reports for Douglas Elliman since 1994. These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.
What is clear now is that the new signed contract volume peaked in March and has been falling ever since. However, what is NOT widely understood is that new listing (not cumulative) inventory peaked at about the same time and has also been falling ever since:
Elliman Report: July 2022 New York New Signed Contracts
Here are a set of Manhattan charts derived from report data – the other markets can be found in our chart gallery.
No Matter How Hard The Fed Pushes, Rates Drift Lower, Now Below 5%
Mortgage rates fall below levels seen in mid-April. Per Sam Khater, Freddie Mac’s chief economist:
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” said Sam Khater, Freddie Mac’s Chief Economist. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
The Wall Street Journal had a good take on the falling rate phenomenon: Mortgage Rates Drop Below 5% for First Time Since April
MBA: Mortgage Payment To Rent Ratio – Both Jumped
I’m unsure about the value of tracking these metrics together since the two indicators seem to move in lockstep – perhaps that’s the point? The spread between the two is probably defined by the tax breaks for homeownership to equalize costs.
While Florida Sales Volume Is Easing, New Listings Are Falling Too
These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.
What is clear now is that the new signed contract volume peaked in March and has been falling ever since. However, as I mentioned earlier and NOT widely understood that new listing (not cumulative) inventory peaked at about the same time and has also been falling ever since:
Elliman Report: July 2022 Florida New Signed Contracts
Here are a set of Miami-Dade charts derived from report data – the other markets can be found in our chart gallery.
The West Coast Seems To Be The Most Home Equity Rich
Statista has a great chart using ATTOM data via Bloomberg that illustrates how much home prices surged in the west and Florida to the point where homeowners have unusually high equity. One can argue that in many of these locations, especially Florida where housing economies have been restructured by remote work.
Rick Sharga, executive vice president of market intelligence at Attom, said in a statement: “After 124 consecutive months of home price increases, it’s no surprise that the percentage of equity rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the lowest. While home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022.”
Although Southern California Sales Are Falling, So Are New Listings
These New Signed Contracts reports present the reported supply and demand for the month. They contain only contracts signed in the month and only inventory that entered the market that month.
What is clear now is that the new signed contract volume peaked in the spring and new inventory has been falling:
Elliman Report: July 2022 California New Signed Contracts
Here are a set of LA charts derived from report data – the other markets can be found in our chart gallery.
Home Showings Declined From Record-Highs
ShowingTime, that little button inserted in seemingly every MLS system, is another useful way to track market momentum. Their regional reports can be found here. I’ve always had a fondness for new unique and credible ways to track housing, even more so because I got to keynote their first conference!
Getting Graphic
My favorite charts of the week of our own making
My favorite charts of the week made by others
Appraiserville
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
TAF Spent $1.4M Of Appraiser’s Hard-earned Money On Lobbying Fees!
To set the stage of the complete disdain for the appraisal industry and the public trust…
In the 2019 TAF 990 Filing, and based on the assumption their compensation has increased in the last three years, The two leaders of TAF Dave & Kelly, run a 12 employee entity and make a staggering ±$750,000 annually. No wonder they don’t want to accept grant money to enable oversight in a not-for-profit!
But it gets worse….
TAF spent $1.4 million dollars lobbying over the past four years using the revenue they take in from appraisers in what amounts to a bureaucratic money making institution that is supposed to be a not-for-profit.
What are they lobbying for? I can only assume it is to keep the status quo. I urge TAF to share with the world what they are spending all that money on. Perhaps I’ll get another chickenshit letter that I can frame in my office. Remember this is the leadership that thought sending this bat-shit crazy letter was a good idea.
Hat tip to commenter “Baggins” on my Appraiser Blogs post “TAF Charging for Misleading Classes” for sharing the links to the 990!
AI’s Sham Petition Process Wins The Second Time In Three Years, So JA Stays In Power Forever
I don’t know how good of an appraiser he was, but AI CEO Jim Amorin’s latest flavor of the sham petition process worked, proving he is a master of institutional takeovers. All the FOJs that feed at the trough must be thrilled. Paula Konikoff was announced as the winner. If you remember, she was the national nominating committee’s selection, likely because one of the regions was not included in the vote. Crazy, right?
I hear she is a very good commercial appraiser and authored a book on Arbitration that AI is marketing for her, but as an FOJ, has a significant lack of enthusiasm for residential appraisers as I’ve discussed before.
In other words, because there are no apparent public efforts to pull in more residential appraisers, AI will continue to ignore them as part of the institutional zeitgeist. Just think about the residential committee formed in 2017 by JA to offset the ire he caused from taking all local chapter funds. JA loaded the panel with several residential people I respect and several I think are poison for the residential appraiser profession; the committee did nothing tangible, reported nothing, and communicated nothing to the membership and the public. It was simply a stunt to quell the membership outrage at the time.
AI’s treatment of designations is embedded with an inflationary effort that continues to devalue the SRA to the point where it means nearly nothing to anyone outside of AI. Of course, through inaction, the MAI brand is already deteriorating.
OFT (One Final Thought)
Karen Chesleigh, a friend of mine for twenty years, a senior executive at Douglas Elliman, and the wife of one of our appraisers passed unexpectedly this week. The Go Fund Me page A Legacy of Love: Honoring Karen Chesleigh whose title always makes me tear up, says it all. It has been wonderful to see the outpouring of support. Please visit:
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 pronounceable;
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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 following 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
Reads, Listens and Visuals I Enjoyed
- Once Asking $63.75 Million, a Billionaires’ Row Condo Sells for 30% Less
- Housing Inventory Growth Has Slowed in Recent Weeks
- New York by the Numbers: Monthly Economic and Fiscal Outlook No. 68 – August 8th, 2022
- 2022 U.S. Houzz & Home Study: Renovation Trends
- Consumers’ US Inflation Expectations Drop Across All Time Horizons
- VC Billionaire Marc Andreessen and Ultra-Wealthy Neighbors Thwart Housing in California Town
- Geopolitical Risk: Political, Capital Markets and Real Estate Uncertainty [Counselors of Real Estate]
- Mortgage Rates Drop Below 5% for First Time Since April [Wall Street Journal]
- WeWork’s Losses Rise as Occupancy Hits 2019 Levels [Commercial Observer]
- Thousands of Formerly Flooded Homes Sold Last Year in New York: Report [City Limits]
- They Wanted a Place Where Friends and Family Could Stay. So They Bought the House Next Door. [Wall Street Journal]
- Home Sellers Cut Prices as Housing Market Cools [Wall Street Journal]
- Days on Market Rises for U.S. Homes for First Time Since 2020 [Mansion Global]
- Almost Half of U.S. Mortgaged Homes Now Considered Equity-Rich [Bloomberg]
- Will 5% Mortgage Rates Cushion the Housing Market? [Calculated Risk]
- CoStar Comes For Zillow With Citysnap New York City MLS [The Real Deal]
- June 2022 Showing Index Results: Buyer Demand Cools as Showings Decline from Record-Breaking Highs [ShowingTime]
- Renters Finally See Market Starting to Cool After Record Growth [Wall Street Journal]
- What's next for the US housing market [CNN Business]
- The global housing boom is running out of steam [Economist]
- Inflation and Interest Rates: Some Clarity To Mixed Macroeconomic Signals [Counselors of Real Estate]
- Black Knight’s June 2022 Mortgage Monitor [Black Night]
- A Chic Swimming Pool Alternative for Small Backyards [Wall Street Journal]
- A Town’s Housing Crisis Exposes a ‘House of Cards’ [NY Times]
- Which City Is Most Expensive for Renters? You Might Be Surprised. [NY Times]
My New Content, Research and Mentions
- Beach house in Malibu’s Colony neighborhood lists at $34.5M [The Real Deal]
- TROPICAL HOUSING DEPRESSION? New Listings Up, Sales Down In Palm Beach County [Boca News Now]
- New York City Home Sales Continued To Decline in July [Mansion Global]
- Deals for New York Homes Drop, Yet Inventory Stays Low [The Real Deal]
- LA area housing prices continue to be high as sales volume slows in June [The Real Deal]
- Rents Have Soared Up to 30% Over Last Year in These 12 Cities [CNET]
Recently Published Elliman Market Reports
- Elliman Report: California New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 7-2022 [Miller Samuel]
- Elliman Report: San Diego County Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Orange County Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Malibu + Malibu Beach Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Los Angeles Sales 2Q 2022 [Miller Samuel]
- Elliman Report: Long Island Sales 2Q 2022 [Miller Samuel]
- Elliman Report: North Fork Sales 2Q 2022 [Miller Samuel]
Appraisal Related Reads
- Trump real estate appraiser hands over thousands of documents to N.Y. AG in civil probe
- TAF is Making Appraisers Pay to be Misleading [Jonathan Miller/Appraisers Blogs]
- Bulletin 2022-6: Automated Collateral Evaluation (ACE) Eligibility – CRC – Single Family [Freddie Mac]
- Class Valuation acquires AMC AppraisalTek [Housingwire]
- Buyers are making less aggressive offers [Ryan Lundquist/Sacramento Appraisal Blog]
- 6 Ways Agents Can Use Their MLS Listings To Help Appraisers [Tom Horn/Birmingham Appraisal Blog]
Extra Curricular Reads
- Can a Neighborhood Be Instagrammed to Death?
- VR Still Stinks Because It Doesn’t Smell
- How a Phoenix record store owner set the audiophile world on fire
- Why So Many Cars Have Rats in Them Now [NY Times]
- Aw Shucks: The Tragic History of New York City Oysters [Untapped New York]
- America’s Love Affair With Iced Drinks [Wall Street Journal]
- Window heat pumps will help electrify New York City's apartments [Canary Media]
- Amtrak Explorer [Amtrak Explorer]
- The Cousin of Vampire Weekend’s Chris Baio Is Now on the New York Yankees [Pitchfork]
- Wikipedia launching new restrictions for users editing ‘recession’ page [Yahoo News]