In The Housing Maze, The Shortest Distance Between Two Points Wins

When I think of the complexity of the real estate industry, sometimes breaking conventional rules can get you there faster.

But I digress…

Elliman Report Released: November 2019 – Manhattan, Brooklyn & Queens Rentals

High-end rental market strengthened by weakening high-end sales market

I’ve been the author of the expanding Elliman Report series for Douglas Elliman Real Estate since 1994. To they released our research for the rental market in three boroughs of New York City.

First of all, there is nothing better than a good chart provided by Bloomberg from their coverage of our research:

And a video, making it a two-fer!

Here are some borough specific key trends and charts:


“Median rental price rose to its second-highest level recorded.”

– Net effective median rent hasn’t seen a year over year decline in 2019
– Median rent reached its highest level in more than a decade
– New leases fell as landlords were more successful retaining tenants at renewal
– Landlord concession market share fell annually for the eighth straight month
– Non-doorman median rent surged at highest rate in more than seven years of tracking
– Highest median rent for 1-bedrooms reached in nearly twelve years of recording
– Median rental price moved higher at all price strata presented and by all bedroom sizes
– Share of new leases at or above $10,000 reached its highest level in more than eight years of tracking
– Super luxury rent representing the top 5% of the market, showed the highest annual gain


“High-end of the market saw the largest price growth.”

– Year over year median rental price trends rose more in higher-end markets
– Net effective median rent rose year over year for twelve consecutive months
– New leases fell as landlords were more successful retaining tenants at renewal
– Land concession market share fell year over year during every month of 2019


[Northwest Region] “The largest areas of price growth occurred at the high-end.”

– Landlord concession market share was significantly lower for larger apartments
– Net effective median rent hasn’t declined year over year in three months
– Concession market share for new development was nearly double that of existing rentals
– New leases fell as landlords were more successful retaining tenants at renewal

This Week in Aspirational Pricing: The Beverly Hillbillies’ Place

I spent a lot of time in my youth watching that show after school – what are the odds that Lachlan Murdoch of News Corp., the buyer and Ruppert’s son, has ever seen an episode?

The Wall Street Journal got the scoop on another 9-digit US sale: $150 million for the mansion used as background in the Beverly Hillbillies 1960s TV show. Asking $350 million since 2017, the estate was able to let it go for a 57% discount. The price cut shows how far off the asking price was in 2017, not some sort of firesale discount.

According to my records, it is the second-highest residential home sale in U.S. history. I began tracking this market as a hobby since 2014.

This Week in Aspirational Pricing: 3rd $100+ Million Manhattan Sale

The closings at 220 Central Park South are starting to accelerate with 7 sales to close above/above $50 million.

The year 2019 is starting to approach sales levels seen in 2014. Please remember, this is a rarify market niche and the Manhattan luxury market remains unusually weak.

Bloomberg Podcast: Manhattan Luxury Market Is Challenged

[click on image to play]

NPR Planet Money’s The Indicator “New York City’s Luxury Condo Hangover”

As a matter of fact, I’ve long declared that our economy and the housing market remains in the hangover phase of the financial crisis. Credit hasn’t normalized and falling mortgage rates haven’t had the expected impact on the housing market.

Hint #1: Low mortgage rates make housing prices higher
Hint #2: Global investors chasing higher returns over-invested in luxury condo development

NPR interviewed Grant Long, a sharp data scientist I know at Streeteasy.

New in the Real Estate Lexicon: Peak Uncertainty

I officially dub this housing era “Peak Uncertainty” for the large numbers of variables that consumer face in high cost, high tax markets like New York:

– 2019 NYS Mansion tax
– 2018 Federal SALT deduction cap
– 2019 Rent Law
– Retreat of foreign buyer and investors
– Affordability challenge

The Real Deal Magazine shows a great reason why recent closing in a building often doesn’t represent the current market. The new building 220 Central Park South has 2 sales above the $100 million threshold and the units actually went to contract several years ago.

Curbed: Will The Role Of Realtors Change Even More

There was an especially great read in Curbed: The 2010s changed how you shop for homes. Will the 2020s change the way you buy them?

There has been an incredible volume of venture capital entering the real estate space with the singular mission of simplifying the home buying process.

Wagging The Dog With Questonable Due Diligence

I’ve been giving national real estate brokerage Compass a lot of grief in recent months after the meltdown of WeWork – which exposed Softbank’s lack of due diligence when they were awarded significant funding. The specific reason I bring this topic up here was that Compass pushed their Softbank fundraising quite hard as a confirmation of their business model. After one of the Compass reported raises, I remember reading an article shortly after about Softbank’s $300 million dog-walking app-maker called Wag. Two years later Softbank appears to have given up on their investment.

$300 million for a dog-walking app maker? Really?

There was a lot made about Softbank’s unicorns as being disrupters by capital but it sure looks like many of them have no clear path to revenue. Expect more problems in the unicorn space to come. Disrupters by capital might be turning out to be unsustainable as a concept and have already experienced their moment in the sun.


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

Pizza Deliverance

My friend and leading Chicago appraiser has stepped up his game to pizza and is now my hero: Chip Wagner has won $100 of pizza every month for 5 years.

OFT (One Final Thought)

This is unreal. The Ramones could never have imagined this. Check out the other songs in that link.

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 sedated;
– You’ll be more like the Beverly Hillbillies;
– And I’ll pay more for a rental.

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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