Such a life lesson. Wait for it…
Has success spoiled the Dead?
Footage from a February 1987 press conference for the release of their video, “So Far.” pic.twitter.com/LpFkjyqenc
— Grateful Dead (@GratefulDead) February 18, 2023
But I digress…
Marry The House, Date The Rate
Blecch, I can’t stand old-timey housing market sayings like this. This Bloomberg piece chronicles the woes of the lending industry – how they need to be creative to talk borrowers back into the market now that rates have more than doubled in one year.
The Home Lenders Hunt for Ways to Make 6% Mortgages More Attractive [Bloomberg]
This Len Kiefer mortgage rate illustration shows what lenders are up against. It’s been more than a decade of much lower mortgage rates.
Housing Analytics: How the Sausage is Made 2-23-23
I enjoyed this conversation with my friends Noah Rosenblatt of Urban Digs and Kael Goodman of Marketproof, a down-in-the-trenches discussion on housing data challenges we see in the NYC metro area. It was well-attended (and really fun to kibitz with people I highly respect), so we plan to do these talks on an ongoing basis.
Pricing Climate Risk Into The Housing Market
Appraisers and brokers adjust for measurable amenity differences to arrive at a value opinion. How do you adjust for something expected to happen 30 years out?
Climate change impacts threaten the stability of the US housing market. In response to growing concerns that increasing costs of flooding are not fully captured in property values, we quantify the magnitude of unpriced flood risk in the housing market by comparing the empirical and economically efficient prices for properties at risk.
Turkey’s Construction Corruption Proves The Absolute Necessity Of Enforced Building Codes
As it turns out – exemptions from following building codes were a way of life for builders and public officials in Turkey, and the earthquake aftermath shows us how cavalier these practices were with peoples’ lives. This is a fascinating story via the Vox podcast, Today Explained. Here’s a good NYT piece on it: Turkish Builders Come Under Intense Scrutiny Over Shoddy Construction
Searching For The Perfect Oven Hood
Wow, the 60s interior design trends gave off a counterculture vibe that disagreed sharply with the more staid standards of prior decades. Now, this…is a hood.
The vent hood we were promised (1969) pic.twitter.com/5vEiOHR40I
— Wendy O'Rourke (@wendyOrourke) February 23, 2023
Kastle Data Shows Us The Moat Around The Office Market
A pandemic metric has become a stalwart of feedback for the commercial office industry to understand the pace of recovery. Kastle data came out of nowhere by measuring card swipes (usage) in the buildings they manage. I have many private discussions in which those in the industry can’t say with certainty whether they belive the market will return to its former glory or it won’t. It all seems up in the air.
Last summer, a grad student in my Columbia MRED class pointed out that Kastle occupancy results probably weren’t as high as assumed. I agree that 100% occupancy on March 20 makes no sense in any market. Look ar a market with a ~10% vacancy rate. I assume that the 100% number for March 2020 was simply the baseline for the index. So if we say the actual occupancy baseline was 90% in a market with 10% vacancy, a 50% occupancy on their chart is really 45% (50% of 90%).
Also, Kastle seems to be using card swipes as a direct proxy for occupancy. So when people look at the following chart, the chart conveys that occupancy is 50% in the Dallas metro area, when it’s probably really less than that when you ask this question: “What was the occupancy in March 2020 that was made into the 100% level for this chart?” In my scenario, the index is not a direct translation for occupancy, right?
And I don’t have a firm understanding of the types of buildings that are being tracked in each market and their relationship to the overall market. Still, it’s an incredibly useful tool to get some sense of the change in trends given all the issues I have pointed out – plus, we have nothing else to gauge occupancy at this level and shared at this frequency.
And the usual weekly stats…
My favorite charts of the week of our own making
I shared this last week. I really love this chart.
My favorite housing market/economic charts of the week made by others
— LongConvexity (@LONGCONVEXITY) February 22, 2023
My favorite random charts of the week made by others
Debated posting it here, but…https://t.co/IxePjTlpRx
This is a problem for short fiction submissions and it's not just going to go away. The link goes into details, but this is a graph of submission bans since 2019. Plagiarism and bot-written spam. pic.twitter.com/pRSVX4mpKt
— clarkesworld (@clarkesworld) February 15, 2023
Upcoming Speaking Events
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
TAF Writes A Brilliant Bureaucratic Letter Of Nothingness
Take a few minutes and read through this recent letter by TAF to PAVE. As a reminder, TAF is the organization that wrote the bat-shit crazy letter, the chickenshit letter and is the subject of an active investigation by HUD on whether USPAP promotes a lack of diversity in the appraisal profession (BLS: 97.7% of appraisers are white). I wonder if EY is aware that one of its partners is the current Chairman of TAF’s Board of Trustees?
The letter says nothing, but it includes words that sound like action. This is a bureaucratic masterclass in oozing nothingness. They continue to take no tangible action to promote real change in the Bunton monarchy’s operations. Highly frustrating and an embarrassment to our appraisal profession.
The Righteous Indignation By Outspoken Appraisers Denying Racial Bias Are Missing The Point
One thing appraisers are widely known for is righteous indignation. I’m certainly known for that on occasion.
In my view, about 99% of the appraiser’s hot takes on the battle between ASC and TAF over racial bias are about exclaiming, “we’re not biased!” Their emotional effort is to defend themselves and the industry, to provide evidence and logic that all appraisers aren’t racists. I get it. Government officials have made insensitive comments with racist inferences against appraisers. And I don’t like being swept into the same group as that Appraisal Institute member in South Carolina that hurled racist tropes at a researcher/author via email a while back.
I think all professions have embedded racial bias, but that’s no reason not to try to eradicate it.
How can anyone look at our industry’s dead last, 400th out of 400 occupations BLS ranking with a 97.7% white metric, and not think there isn’t some racial issue within the industry? It’s tangible. It’s empirical.
It is critical to protect public trust. That’s the greater economic force behind the valuation occupation. If we get to the point where no one trusts us, we will be replaced somehow; like it or not, no amount of righteous indignation will change that 97.7% metric. We should all think about improving that 97.7% ratio. It’s tangible and damaging to our industry’s brand in the eyes of the public.
It starts with reforming The Appraisal Foundation by ousting the problematic leadership, whose bureaucratic ineptness has fostered that 97.7%. As a reminder, only one person of color has been on the two technical boards in more than three decades of existence. And that glass ceiling was only broken in 2020 because of significant external pressure. And nothing further has been done since 2020. Incredible.
How do we get more people of color into the least diverse industry in the United States? Keeping the status quo isn’t something we can lean into. Not being able to solve that problem will prove the critics right. Do we want that as an industry?
OFT (One Final Thought)
Once you get this stripped-down ’85 Minutemen tune in your head, it’s hard to shake.
“#PunkRock changed our lives”
History Lesson Part 2
The Stone, San Francisco 1985 pic.twitter.com/B0EIZzGEaH
— Surfinskatinthrashin (@Surfinskatin) February 19, 2023
Brilliant Idea #1
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Reads, Listens and Visuals I Enjoyed
- The Furniture Hustlers of Silicon Valley
- Miami Dev Site Prices Nosedive At End Of 2022
- 'A Million Things Can Go Wrong': City, Developers Outline Challenges In Office-To-Resi Conversions [Bisnow]
- Opendoor Plans to Accelerate Selling in Recovering Home Market [Bloomberg]
- Home Lenders Hunt for Ways to Make 6% Mortgages More Attractive [Bloomberg]
- CoStar's Bid To Buy Realtor.com From News Corp Ends With No Deal [Bisnow]
- Office Buildings Could Evade Energy Upgrades Via ‘Giant Loophole’ in NYC’s Climate Law, Environmentalists Warn [City Limits]
- Infrastructure spending has a bigger effect on jobs when we're in an economic recession [CNBC]
- Cities Are at a Turning Point on Taxing Employers for Remote Work [Bloomberg]
- The State of US Housing: A Roller Coaster Ride [JCHS Harvard]
- Why WFH Will Not Doom Cities [Corner Side Yard]
- Unpriced climate risk and the potential consequences of overvaluation in US housing markets – Nature Climate Change [Nature]
- Turkey’s man-made catastrophe — Today, Explained — Overcast [Vox]
- Hundreds of teens break into Texas family’s home, throw ‘mansion rager’ [NY Post]
- By Adding Apartments, Malls Seek to Bring Shopping Closer to Home [NY Times]
- Mark Wahlberg Gets $55 Million for Massive Los Angeles Mansion [Mansion Global]
My New Content, Research and Mentions
- $35M Wells Fargo Loan for New York Apartments Refinanced By Solly Assa [Investor Telegraph]
- New York City’s Priciest Rental Rankings [The Real Deal]
- Midtown Owners Hedge on Costly Office-to-Home Conversions [W42ST]
- NYC Rental Market Reporting: A Conversation with Jonathan Miller [Marketproof]
- WSJ News Exclusive | A $32 Million Home Sets Price Record for Miami Beach’s Palm Island [Wall Street Journal]
- A $32 Million Home Sets Price Record for Miami Beach’s Palm Island [Mansion Global]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 1-2023 [Miller Samuel]
- Elliman Report: Hamptons/North Fork Decade 2013-2022 [Miller Samuel]
- Elliman Report: Long Island Decade 2013-2022 [Miller Samuel]
- Elliman Report: Manhattan Townhouse 2013-2022 [Miller Samuel]
- Elliman Report: Manhattan Decade 2013-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: California New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 1-2023 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 1-2023 [Miller Samuel]
Appraisal Related Reads
- Ban Multiple Regression? – George Dell, SRA, MAI, ASA, CRE [George Dell]
- Measure Credibility? – George Dell, SRA, MAI, ASA, CRE [George Dell]
- Active Versus Passive Real Estate Appreciation in Real Estate Litigation [Counselors of Real Estate]
- The housing market is heating up & still frozen [Sacramento Appraisal Blog]
- Maryland Appraiser Says Racism Suit Ruined His Reputation [Law360]
- Looking out for two housing market bottoms [Sacramento Appraisal Blog]
- Appraisal standards must include federal prohibitions against discrimination [Consumer Financial Protection Bureau]
- The Real Cause of the Home Value Gap Is the Income Gap [Appraisers Blogs]
Extra Curricular Reads
- Modular Portland Loo Toilets Will Be Tried in NYC Parks Lacking Bathrooms
- Essay | How the Allman Brothers Band Helped Make Jimmy Carter President
- The East Village Shop That’s Been the Magic Weapon of Chefs for Nearly 30 Years [Eater]
- These Masks Brought Shame to Gossips, Drunks, and Narcissists [Atlas Obscura]
- A nuclear reactor was melting down. Jimmy Carter came to the rescue. [Washington Post]
- Meet the Original Voice of Your GPS System [Neatorama]