The past year in housing has been one of tremendous change with challenges of limited supply, rising rates, the exit of the federal government from endorsing homeownership through incentives, overbuilding luxury, an affordability crisis, echoes of housing bubble regulatory behavior, and of course, not enough turrets (more on that further down the page). It’s almost as if we need to jump over housing and solve other issues first. And yes, you’re so vain.
Hold my beer while I jump this house. pic.twitter.com/vS99q58bwn
— Hold My Beer (@holdmyale) February 15, 2018
This Week in Aspirational Pricing
This has been a busy week in high-end Manhattan sales news. Kathy Clarke at Wall Street Journal Mansion broke the story on who paid $100,471,452 for the 90th-floor Penthouse at One57. The mystery buyer (Michael Dell) likely just needed to have a decent place to stay when he was in town.
We mere mortals also learned what it is like to sleep on a high floor in this building in a fun New York Times piece: Clouds in My Coffee! A Supertall Skyscraper Sleepover. Yes, we’re so vain. This was a really fun piece. And I asked myself, with the building largely dark at night suggesting it’s largely comprised of pieds-a-terre, how much candy can your kids get on Halloween?
Attention Real Estate Journalists: After “Turrets” There Are No Topics Left Uncovered
We all want to know about living in the turrets that grace the top of older buildings. Here’s a fun one shared in the New York Magazine piece.
I’ve been inside a few turrets during my Manhattan appraisal career and it was always pretty cool. Here is one of the Beresford penthouses (not the one I inspected for an appraisal) that has a turret.
Here’s the outside of the Beresford on Central Park West.
2017 Real Estate Brokerage Sales Rankings Are In
For those Housing Note readers not familiar with our Manhattan real estate market, the numbers are huge. I suspect a lot of them could be distorted by new development legacy contracts that closed in 2017 but were signed 2-3 years prior during the first wave of the luxury new development boom. But never the less, the numbers are still huge. While the rankings reflect closing volume (total dollars = units x price). Corcoran is the biggest by volume while Douglas Elliman is the largest by number of sales.
I think it is just as interesting to look at the average sales price of a transaction at each of the firms to get a sense of how expensive Manhattan really is. Here are the top five using TRD’s chart ranking for volume below:
Average sales price per deal by firm
– Corcoran Group – $3,209,184
– Douglas Elliman – $2,197,478
– Stribling & Associates – $4,040,921
– Compass – $2,035,661
– Sotheby’s International Realty – $3,479,381
When Your Home Is Featured In A Magazine, You’re Destined for Divorce
Recently I was reading a story in Architectural Digest about Jennifer Aniston’s home and saw that despite all the pictures of her, there were none taken of her husband. I thought to myself as a housing nerd and an appraiser that does a lot of divorce work: “this is odd, I wonder if they are getting a divorce.” I got this sense from observing my own appraisal work, where a large amount of the cases we appraise involve a recent or in process renovation.
This Slate piece on the Architectural Digest Curse resonated with me:
Call it the Architectural Digest curse.
This is not the first celebrity couple to appear in the magazine shortly before declaring their relationship kaput. Naomi Watts and Liev Schreiber showed off their Tribeca loft in the March 2016 issue, six months before they announced they had broken up. Marc Anthony and his model wife posed in their Dominican Republic getaway in the same issue and filed for divorce by the end of the year. Drew Barrymore’s art adviser husband talked up his in-home office in 2015, and they split early the next year.
I don’t know how recently their home was renovated but that was what crossed my mind. The thinking goes that these renovations are often done for the wrong reasons – to shift focus from the problem itself. Unfortunately renovating a home can be enormously stressful to the owners. I speak from my appraisal experience with all my interactions with property owners. Maybe that’s why I’ve been happily married for 34 years and my wife and I have never done a major renovation to any home we’ve owned?
Food for thought.
China’s 13-Year Housing Boom Showing Signs of Wear
In my couple of visits to Shanghai in the past two years, it seemed clear to me that the residents favored housing much more than the stock market. Yet it has been a 13-year run and all good things eventually come to an end before the next cycle can occur. I’ve always looked at housing as one of the vehicles the Chinese government used to placate the masses since Tiananmen Square in 2009.
Single Room Occupancy Disappears Despite Need for Affordable Housing
There is a spectacularly creative visual piece in City Lab that you need to read. The Rise and Fall of the American SRO is an artistic take on how important SROs used to be.
It gets even better…
Click here for the full story in graphics at Citylab.
BREAKING: David versus Goliath Redux: Skapinetz versus Coester – Case Direction Favors Underdog
Court Refuses to Dismiss Lawsuit That Coester and His AMC Hacked Appraiser Mark Skapinetz’s Emails
My colleague and friend, Georgia appraiser Mark Skapinetz, sued COESTERVMS.COM, INC. and BRIAN COESTER in the U.S. District Court for the District of Maryland last year for hacking his email account. Here is the evidence submitted. Coester subsequently filed a motion to dismiss. On February 9th, U.S. District Judge Paula Xinis Denied The Motion to Dismiss for 3 of the 5 claims and the lawsuit will move forward.
I find this whole matter very compelling – especially with Brian Coester & Co. representing the most prevalent and controversial AMC model – begins to crack. You know, the one where the mortgage applicant pays an “appraisal fee” at time of application, not knowing that the actual appraiser gets 50% or less than that market-rate fee. Brian Coester – with a trail of bad press, pushing the false narrative of an appraisal shortage and good PR as a charitable fundraiser protected by industry media gets “caught” by an independent fee appraiser for hacking the appraiser’s email. You get a better gauge of the Coester legacy when you read this Appraiserblogs post: Scheer Motion to Dismiss Coester vs Scheer Lawsuit
Why does this process of outing the bad AMC players take so long? Al Capone was brought down for tax evasion rather than what he actually did for a living. Is this situation, aside from the gambling, prostitution, bootlegging, bribery, narcotics trafficking, robbery, “protection” rackets, and murder part, any different?
Based on Skapinetz’s success in convincing the court to proceed on the meat of the lawsuit, I suspect this is going to result in a substantial settlement that CoesterVMS may or may not have the funds to pay. To all appraiser vendors of CoesterVMS: you may want to take a look at your accounts receivables for this client and start calling today.
Here are some documents in the Skapinetz v. Coester matter. They are all fascinating reads.
MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [Original 2017 Complaint] MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [Evidence in 2017 Complaint] MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [2018 Denial of Motion to Dismiss]
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- We ranked the top Manhattan residential firms by closed sales in 2017 [The Real Deal NY]
- Did the NYC multifamily market almost die in 2017? [The Real Deal New York]
- Tight supply, rising prices undercut on U.S. home sales [Reuters]
- The Rise and Fall of the American SRO [The Atlantic]
- Silicon Valley tech hiring outpaces rivals, but woes worsen [Mercury News]
- St. Patrick's Cathedral prepares for air-rights sale [Crains New York]
- Fake News: 'We Can't Build for Entry-Level Home Buyers' [Builder Online]
- Nota bene: The death and life of great American skyscrapers [Felix Salmon]
- Sky-high Hong Kong: can anything stop the boom in property prices? [Financial Times]
- Singapore Is Creating a Subterranean Master Plan [Next City]
- Nearly half of New Yorkers think the city is unaffordable – [Curbed NY]
- City Noise Might Be Making You Sick [The Atlantic]
- 21st Century SROs: Can Small Housing Units Help Meet the Need for Affordable Housing in New York City? [Furman Center]
- A Guide to the 100 Stunning Architectural Gems of L.A. [LA Mag]
- LA’s infusion of multifamily development in 2018 will drive up rents, vacancy: report [The Real Deal LA]
- I Knew Jennifer Aniston and Justin Theroux Were Divorcing Before They Announced It and Here’s How [Slate]
- Jennifer Aniston Takes AD Inside Her Dreamy California Home [Architectural Digest]
- The Big Risk in China Isn't Stocks [Bloomberg]
My New Content, Research and Mentions
- We finally know who overpaid for the $100-million apartment in NYC
- Manhattan Home Values Crawled Upward During Past Decade [Habitat Magazine]
- New tax law could slow high-end home sales on LI [Newsday]
- Clouds in My Coffee! A Supertall Skyscraper Sleepover [New York Times]
- The Turrets of New York — and the People Who Inhabit Them [NY Mag]
- Amenities War Breaks Out in Long Island City Rentals [Wall Street Journal]
- Manhattan apartments haven't been a great investment over the last decade [The Real Deal NY]
- Surprise: Manhattan homes were poor investments during past decade [Crains New York]
- I'm in a bidding war for an apartment. What should I write to the seller? [Brick Underground]
Appraisal Related Reads
- MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER – Evidence in 2017 Complaint
- MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER – 2018 Denial of Motion to Dismiss
- MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER – Original 2017 Complaint
- CVMS Fraud & Scheer Motion to Dismiss Coester vs Scheer Lawsuit [Appraisersblogs]
- Slumping volume, too many million dollar listings, & rising rates [Sacramento Appraisal Blog]
- JUST…. I Am Not "JUST" a Residential Appraiser – [Appraisers Blogs]
- Monday Morning Cup of Coffee: Countrywide, LandSafe accused of fraudulent appraisals during housing boom [Housing Wire]
- FFIEC Finalizes Regulations for the Payment of AMC Registry Fees | [Consumer Financial Services Review]
- Collection and Transmission of Annual AMC Registry Fees [Federal Register]
- My Business is Expanding to Include Commercial Appraisal Services! [Birmingham Appraisal Blog]
- Moving from R to Excel-What Do I Need To Replicate in R? [Joseph Lynch Appraisal]
- Appraiser Retiree Generously Shares His Excel Handiwork [Dons Appraisals]
- Appraisal Management Companies (AMCs) Have Failed – [AppraisersBlogs]
Extra Curricular Reads
- A brief history of credit cards [The Week]
- Opinion | What’s the Right Age to Read a Book? [New York Times]
- Matthew McConaughey Keeps His Customized Airstream Trailer in Malibu | [Architectural Digest]
- The Podcasting Boom Explained in One Infographic [Visual Capitalist]
- Norway's curlers and their incredible Winter Olympic trousers – ranked [The Guardian]