Rocky Raccoon Houses A Strong Desire For Stuff

August 9, 2019

Sometimes people want what they want, no matter what the risk is. There is a lot of that same sentiment coming from regulators and policy administrators in the federal government these days. More on that in future editions of these Housing Notes, but until then, we’ll fight for our jackets.

On an unrelated note, here’s a shoutout to my excellent summer semester Columbia grad students in the GSAPP program who took their final exam yesterday. I really enjoyed the class interaction and wish them well in their careers. When turning in their completed exam, one of the students commented that they specifically enjoyed my discussion on pie versus cake…

Oh, the satisfaction of teaching can not be put into words!

But I digress…

Rate Talk: Business versus Consumer Sentiment Is Like Apples versus Oranges

As I’ve mentioned before in these housing notes, the bond market seems terrified of current U.S. economic policies while the stock market seems euphoric (even though the stock market is not the economy.

Sam Khater, Freddie Mac’s chief economist, and aficionado of the only band that matters says, “There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment. Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”

I loved this observation about sentiment (and The Clash, obviously).

Chart-Nirvana Market Update In Elliman Magazine

As regular readers of my Housing Notes have noticed, I create a full-page spread for Douglas Elliman Real Estate’s quarterly magazine using the results of my U.S. market research. I’m no Len Keifer but still, the visuals are pretty cool.

A Potential Spike In Refi’s, Illustrated

Here’s a good look at the refinance situation via The Basis Point, always a good read. The one point not made here is that falling rates raise prices which is not good for housing in the long term when matched against tepid wage growth. The drop in rates is a short term win for consumers, not a long term win.

Vox: Where Manhattan’s Street Grids Came From

It wasn’t by accident.

Spurious Housing Correlations: Grocery Stores

Here’s one from ATTOM.

1. Take a ton of housing data and geotag it for its proximity to a grocery store like Whole Foods (a.k.a. Whole Paycheck) or Trader Joes.
2. Then measure the value of a neighborhood against those farther away or before and after the store was built.
3. Base the analysis on zip codes even thought zip codes don’t represent neighborhoods or like housing stock.
4. And you get…voila…junkstats.

There are so many other factors to be considered that this type of analysis is way too simplistic to be credible. An example of spurious correlations in my housing market of Manhattan would be to compare the average or median sales price of an apartment with or without a fireplace. Homes with fireplaces tend to be “pre-war” (built prior to WWII) or penthouses which sell for a premium above the remainder of the housing stock. My own fireplace amenity analysis was not some sort of boolean logic exercise found in the ATTOM analysis.

Bloomberg Terminals: Miller Samuel Luxury Housing Index

We power 6 different price indices for Manhattan luxury housing on the Bloomberg Terminals. This luxury median sales price chart shows how the market has slid from recent highs and how much prices have surged after the financial crisis.

Downtown Alliance: Q2-2019 Lower Manhattan Market Overview

For many years I’ve been crunching residential housing data for the Downtown Alliance for use in their quarterly reports. Here are the residential pages of their latest report:


Appraiserville

(For earlier appraisal industry commentary, visit my old clunky REIC site.) As I said last week, I’m taking a bit of a summer hiatus from appraisal policy discussions, but there is always time for this:

Appraising Unique Properties Like Attached RV Garages

I’ve been at this appraisal thing for 33 years and I’ve never seen or heard of this amenity or the targeted demo it appeals to. My friend and appraiser colleague Ryan Lundquist is the undisputed leader of wacky amenity observations.

OFT (One Final Thought)

Aside from his dirty hands, this would be a typical experience in my kitchen. The skills demonstrated here are strangely satisfying and are required viewing.

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 replay the Beatle’s ‘White Album” for that ‘Rocky Raccoon’ song;
– You’ll learn to love my charts;
– And I’ll go to the grocery store.

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

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Appraisal Related Reads

Extra Curricular Reads