The Narrative Is Slowly Shifting For Manhattan Housing And What's Old Is New

February 5, 2021

The Narrative Is Slowly Shifting For Manhattan Housing And What’s Old Is New

Although I believe I’ve shared other iterations of these, they never get old (pun intended) and they remind me of how rich in character New York City is.

But I digress…

Manhattan New Signed Contracts For January 2021 Double YOY

I’ve been the author of the expanding Elliman market report series for Douglas Elliman Real Estate since 1994 and the most recent report additions, which began during the pandemic are the New Signed Contract reports for regions in New York, Florida, Colorado, and California. I’ve always been so grateful that a large national firm like this enables me to produce neutral market insights because they want to enable the consumer to make more informed decisions.

All of the U.S. regions we cover have shown phenomenal growth after their respective regional lockdowns ended but Manhattan has been the laggard until now.

Here’s a cool chart by Bloomberg on the contract surge (in two color versions!):

And most importantly, interest in this story made it the most emailed article of the day by the ±350K Bloomberg Terminal subscribers who love their Manhattan real estate.

______________________________________________________

New York New Signed Contracts Report

The New York report attached covers Manhattan, Brooklyn, Long Island, Hamptons, North Fork, Westchester County, Fairfield County, and Greenwich, CT.

Elliman Report: January 2001 New York New Signed Contracts

Manhattan
“New signed contracts for co-ops, condos, and 1-3 families combined had doubled year over year for the second annual increase since the lockdown ended. New listing inventory fell sharply year over year for the fourth straight month.”

Brooklyn
“New signed contracts for all three property types combined rose sharply from the same period last year for the fourth straight month of increases. Market-wide new signed contracts for January nearly tripled from the prior year. New listing inventory has continued to expand each month annually since last June, keeping up with demand.”

Long Island (excluding H/NF)
“New signed contract activity for all property types combined increased each month annually since last July. New inventory declined year over year for the second time in three months.”

Hamptons
“New signed contract activity for single families rose sharply year over year since last June. New inventory surged annually each month since last June to meet demand until declining this January.”

North Fork
“New signed contract activity for each property type rose sharply year over year since last June. New inventory surged annually each month since last May to meet demand until declining this January.”

Westchester
“New signed contract activity for all property types combined rose sharply year over year since last July. New inventory fell annually for only the second month since last July.”

Fairfield
“New signed contract activity for all property types combined rose steadily year over year since last July. New inventory declines sharply year over year for the past four months.”

Greenwich
“New signed contract activity for single families rose sharply year over year since last July. In tandem, new inventory surged annually each month over the same period to meet demand.”

Here’s A Better House Than The International Space Station

There’s a crazy looking listing featured in the Wall Street Journal today and the article title tells it like it is: To Malibu and Beyond: A Home That Looks Like the International Space Station Asks $20 Million

The pictures are insane. My basic view of this type of property as a valuation challenge is discussed in the piece – basic thinking is that its uniqueness is limited to a very small pool of buyers which can restrain its potential value – that this uniqueness is probably not an advantage. But I have no idea how this relates to the asking price.

From the WSJ story:

Here’s the google view – its living room looks like a jet engine sideways on the ground, partially buried.

VIDEO The Struggle At Hudson Yards Continues

Spectrum NY1 News does a good overview of the current state of the Manhattan mega-development, Hudson Yards. This was a project that was conceived of about a dozen years and came to market as the super-luxury space was unraveling. Throw in a global pandemic and it gets dire. As developers go, Related is one of the best-managed developers I’ve seen over my 3+ decades in the Manhattan market with one of the best track records around, but it’s going to be difficult.

I’m only in the piece for a nanosecond and my company’s name is spelled incorrectly, but hey, it is always fun to do these and this was a well-done segment on Related’s challenge.


[click on image to play]

Just Because New Lease Signings Are Surging, Doesn’t Mean Rents Stop Falling

Here’s a recent piece on the state of the New York City rental market.

A Preliminary Look At The Manhattan Decade Report – Sales Were Down YOY in 2020, Obviously

The top-level results of the report were released but the full report will be published online next week in a 60 pager!

Crain’s New York did a nice analysis of the results: Manhattan apartment prices peaked in 2017, report says

______________________________________________________
MANHATTAN DECADE HIGHLIGHTS [2011-2020] (Co-ops & Condos)

“While 2020 saw a significant release of pent-up demand after the spring COVID lockdown ended, sales totals fell short of year-ago levels.”

– Record low mortgage rates helped fuel sales after the COVID lockdown ended last spring
– While the sales fell short of year-ago levels, the new signed contract volume suggests that closings will continue to close the gap in the first half of 2021
– With the exception of 2017, the annual number of sales has slipped year over year in the post-financial crisis era since the 2013 peak
– Median sales price remained above the $1 million threshold since 2015 and has largely drifted sideways
– Sales with four or more bedroom was the only size category to increase over the decade and saw the largest gain in price per square foot
– Listing inventory rose more significantly year over year than compared to the beginning of the decade

Even Supertalls Can Have Superproblems

This week, a crazy story broken by the New York Times: The Downside to Life in a Supertall Tower: Leaks, Creaks, Breaks talks about the challenges facing one of my favorite Manhattan supertalls, 432 Park Avenue. The article title almost got me to pronounce “Breaks” as “Breeks.”

We’ve appraised units in the building since it obtained a TCO circa 2016ish. I’ve done a few myself with floor levels as high as in the ’80s and my firm has done a few on floor levels in the 90s. The views are spectacular and I found the apartments to be unusually quiet during my own inspections.

But this story talked about so much more. It reminded me of a story about mold litigation at 515 Park Avenue, one of the best new buildings of its time, that became temporarily nicknamed “The Mold Building” but the litigation and story faded from memory very quickly as I suspect this will too.

A Preliminary Look At The Manhattan Townhouse Report – Showed Lowest Number of Sales In 24 Years

The top-level results of the report were released but the full report will be published online next week and shared in Housing Notes next week! I’m running behind this market report cycle.

Mansion Global provided a nice summary of the top-level results: Manhattan’s Townhouses Saw Largest Price Increases Over Past Decade

The ‘Fleeing The City’ Narrative Is Getting Boring. Here Are Some New Ways To Think About It.

There is a new evolving narrative of what cities will be post-pandemic and this will apply to housing. This conversational change is happening because housing market laggards like Manhattan are actually waking up (but at lower prices).

Recent thought pieces and articles on the outlook for Manhattan and cities.

– Why We Don’t Believe the Big City Obituary [Bloomberg Citylab]

– Young and Ambitious? Move to New York, Not Austin [Bloomberg Opinion]

– Manhattan Home Sales Revive as Lower Prices Lure Buyers [WSJ]

– Why Some Suburban Businesses Are Thriving During the Pandemic [NYT]

– Think NYC Is Dead? Not So Fast. Real Estate Contracts Rebound And Then Some [NY1]

Here’s the middle of the road argument made last fall:

– Part 1 – Is New York City Over? [Freakonomics Radio]

– Part 2 – Why Are Cities (Still) So Expensive? [Freakonomics Radio]

Here is the doom and gloom argument:

– Superstar Cities Are in Trouble [Atlantic Cities]

Change In The Narrative: Urban AND Suburban Housing Sales Markets Thrived During The Pandemic

As it turns out, the “suburbs are the future and cities are dead” narrative was wrong at least as it pertains to home sales (not rentals). I think the initial weakness of Manhattan inferred this narrative. But instead, it was late to the party in the context of sales activity. Manhattan sales market is coming back sales-wise as discussed earlier. Ridiculously low mortgage rates will do that. Declining housing prices will also do that.

Richard Florida‘s thread breaks it down:

Palm Beach’s Contract Boom Has Been Steady But Pronounced Since The Pandemic Began

In another monthly new signed contract report we author that was published by Douglas Elliman this week, Palm Beach County continued to be a stand out market.

Demand was even greater in the market’s richest corners. Contracts quadrupled for single-family houses priced at $800,000 to $999,000, and more than $1 million.

Elliman Report: January 2021 Florida New Signed Contracts.

Here’s a chart that shows the sales boom (two different color schemes!):

Apparently I’m A Notable Real Estate Person In New York

Crains New York Business named me as one of the NOTABLES IN REAL ESTATE for 2021. Its always appreciated and fun to be recognized.


Getting Graphic

Our favorite charts of the week of our own making

Appraiserville

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

Public listening session hosted by the Federal Housing Finance Agency on February 11, 2021

Register for this upcoming FHFA event!

FHFA is hosting a public listening session as part of a Request for Input (RFI) on appraisal-related policies, practices and processes. The individual input and feedback received in response to the RFI will be considered by FHFA to determine the necessary modifications needed to ensure Fannie Mae and Freddie Mac (the Enterprises) operate in a safe and sound manner.

This is how we get heard!

More From Voice of Appraisal – Children of the Corn Meets Children of Foreclosures

Phil is back for the new year after dealing with a wild 2020! He covers the “Wall Street Bets” drama and breaks down an appraiser’s perspective of what could be a “deep seeded reckoning” shared by the hive-minded day traders. Did this start in 2008? Are some of this traders “The Children of Foreclosure”? Enjoy the show!!!

Get Ready Jim, Appraiserville will be waking up next week

As you can see by the earlier content, there is a lot going at the moment outside of my appraisal world. But don’t worry, there will be lots to share over the next few weeks.

OFT (One Final Thought)

To get the answer to whether the groundhog saw its shadow or not was live-streamed by ABC news and watched by 152K people. Seems like society is making a statement, no?

And then this, because it made me feel so good on a Friday afternoon.

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 live in a space station house;
– You’ll be more outer-worldly;
– And I’ll follow Elon.

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

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads