Sometimes We Don't See Signs Of Housing Trends Until They Hit Us

Sometimes We Don’t See Signs Of Housing Trends Until They Hit Us

Since the New Year began, reporting on the housing market has been consistent in identifying that many markets are undergoing changes after many years of consistent white hot conditions. In many ways the changes that are being openly discussed already began more than a year ago but consensus wasn’t yet formed. Now the chorus is getting louder.

No more signs to share – but I do have some cool charts below.

I clearly have digressed.

Market Report Gauntlet Q4 Week 2: Westchester, Putnam & Dutchess Counties

Since 1994, I’ve been the author of an expanding independent series of market reports for Douglas Elliman, the third largest real estate company in the U.S. After each quarter ends, they publish our research in more than 30 U.S. housing markets in what I call “The Gauntlet.”

Elliman Report: Q4-2018 Westchester Sales

Elliman Report: Q4-2018 Putnam & Dutchess Sales

Bloomberg provided a nice chart on our results for the quarter illustrating the tight co-op market. I’ve got this data back to 1994. The chart shows the compression (faster speed) of the past two years.

– Overall price trend indicators slid year over year by a shift in the mix toward apartment sales
– Single-family and 2-4 family sales and their market share declined year over year
– Total contracts fell year over year for the fourth consecutive quarter

Single Family
– Sales declined annually for the sixth consecutive quarter
– Total contracts fell annually for the ninth straight quarter
– Listing inventory expanded annually for the third consecutive quarter

– In contrast with the region, sales rose year over year for the third time in the past four quarters
– Inventory, marketing time and negotiability tightened year over year
– Median sales price increased year over year for the seventh consecutive quarter

– Listing inventory rose year over year for the second straight quarter after falling for the previous nine
– The number of sales decreased year over year for the fourth consecutive quarter
– All price trend indicators rose year over year for the second consecutive quarter

Market Report Gauntlet Q4 Week 2: Brooklyn, Queens & Riverdale Sales

Elliman Report: Q4-2018 Brooklyn Sales
Elliman Report: Q4-2018 Northwest Queens Sales
Elliman Report:
Q4-2018 Queens Sales

Elliman Report: Q4-2018 Riverdale Sales

– The market continued to be characterized by steadily rising prices, and a fast-moving pace.
– The number of sales declined year over year for the fourth consecutive quarter
– After reaching a record low in the prior year quarter, listing inventory rose sharply
– Median and average sales price increased year over year for the second consecutive quarter


– Consistency in setting new price records, sliding sales, and rising inventory trends

– Seventh consecutive quarter with average sales price record

– Fifth consecutive quarter of year over year declining sales

– Listing inventory rose year over year for the seventh consecutive quarter


[includes Fieldston, Hudson Hill, North Riverdale and Spuyten Duyvil]

– Price trends moved higher despite rising inventory

– All price trend indicators move higher as sales fell sharply

– Listing inventory edged higher, but marketing time dropped

– Negotiability eased nominally as the market pace slowed

Market Report Gauntlet December 2018: Manhattan, Brooklyn & Queens Rental Markets

Elliman Report: 12-2018 Manhattan, Brooklyn & Queens Rentals

– The Manhattan rental market saw fewer new leases, more concessions, and aggregate prices skewed upward by higher quality rental housing stock.
– Median net effective rent slid year over year for the second consecutive month
– Vacancy rate continued to fall year over year, down for the seventh consecutive month
– Market share of concessions rose year over year for the forty-third consecutive month
– Mid-tier, entry tier and starter median rent moved higher year over year
– Luxury median rent fell year over year for the fifth time in the past six months

– The Brooklyn rental market continued its trend of rising rents skewed higher by the influx of higher quality new development rentals.
– Market share of 2-bedroom and 3-bedroom rentals rose 1.8%, skewing overall price trends higher
– Median net effective rent rose year over year for the second time in five months
– Market share of concessions increased year over year for the 35th consecutive month

[Northwest Region]
– The Amazon “HQ2” announcement has led to speculation that the market will tighten soon if not already. It hasn’t.

– Rental price trend indicators skewed higher by an influx of new development product
– Market share of concessions increased year over year for the 4th consecutive month
– Only 2-bedrooms saw a year over year rise in rental market share

Shifting Fortunes of International Real Estate

Knight Frank, a global real estate firm affiliated with Douglas Elliman has issued forecasts for 2019 for a number of global cities. Europe (and Miami) are poised to be standouts.

Home Sales Are Slowing

Here’s a Bloomberg video featuring our Elliman Report research on slowing sales. Admittedly I prefer rock music in the background.

New in the Real Estate Lexicon: Shutdown

Please be advised that surveys are one step worse than bad data but NAR is taking an aggressive stance on the impact of the shutdown to the spring housing market.

Among those that reported problems, 9 percent said clients who were federal employees had held back from buying, while 25 percent said buyers pulled out simply because of “economic uncertainty,” according to the report. Of those, about half had closings delayed or canceled because customers’ mortgages were backed by the Federal Housing Administration, U.S. Department of Veterans Affairs or the U.S. Department of Agriculture.

Uncertainty Still Remains Popular in The Housing Lexicon to the point where homebuilders can’t forecast their outlook for the year. Now THATS uncertainty.

The “R” word

According to JP Morgan, the odds of a recession in two years are 70%

The issue isn’t whether we will go into one – we always do eventually. The issue is how bad it will be. Rates are already low so the Fed has less wiggle room to work with since the tax cut was made a time when the economy was booming – generally the opposite moment when a tax cut should be issued. The Indicator Podcast by Planet Money does a great job explaining.

This Week in Aspirational Pricing

Yawn, another $125 Million Los Angeles listing.

Here’s proof that titans of Wall Street don’t get housing. The $70 million price cut from a $115 million price set five years ago isn’t a price cut. The cut really shows how wildly over the market the listing was priced around the time of “Peak Luxury.”

According to our data, the top 1% of the market had an average sales price of $28,447,888 in 4Q18, a 97% increase since 4Q13. Basically double. This listing cut its price by 61% over the same period. Wow.

Punchbowl Economics: Metro Home Supply-Demand Imbalance

This AEI study (h/t Ritholtz) is measuring recent market changes across 100 metros.

I love how AEI constantly refers to the “punch bowl” in a serious research piece:

Minimal access to the leverage punch bowl makes difficult for buyers in high price tier (almost
exclusively repeat buyers) to offset higher home prices and interest rates. As noted earlier,
these buyers have been using quality trade-offs to offset rising constant quality home prices. As
a result, 40 of 100 metros are buyer’s markets, while many others are just moderate seller’s

Raking The Living Room Carpet

One of my friends during college had a mom that was a bit enthusiastic about there living room. It was a shrine. The carpet was “raked” so she could see if the kids ventured into the room where all the couches and chairs with covered in clear plastic.

I found this Curbed article by must read McMansion Hell author fascinating: “Our homes don’t need formal spaces

One of the simplest reasons so many clamor for formal spaces is because they are a signifier of wealth and prestige, a sign of having “made it.”

Working With Appraisers

Here’s a good video for agents to better understand how to work with appraisers – wait for the end of the clip.

h/t Maureen Sweeney

Upcoming Speaking Events


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

12-24 Hour Valuations: How Are We Worth So Little?

An appraiser sent me the following email. It has become clear to me that the valuation industry that engages appraisers now places more value on the physical inspection than it does the actual valuation itself.


They can’t replicate the interior inspection so the valuation portion is where the fee shaving occurs and believe they can come up with the value themselves or find people that will work for wages that won’t attract people who are competent, but rather, people that are desperate.

[Bold for emphasis] ___________________________


You are receiving this email because you have expressed interest in completing desktop products for Computershare. If you are not interested in completing these products and wish to no longer be contacted, please let me know and I will remove you from our list.

We have recently completed a recording of our AppraisalX (Desktop Hybrid Appraisal) and ARA (Appraisal Review) training session and made it available for everyone on our BrickFTP site. This training runs for approximately an hour and covers both products as well as general system navigation within our Acuity platform. This is a requirement to complete, along with a short test, in order to be eligible to receive these assignments.

On the BrickFTP site you will find our video labeled “AppraisalX _ ARA Training Recording 2018-09-18” which is in .mp4, .mov, .wmv, or .avi format. These are all the same video, just different formats that your computer or portable device might be able to read. Also included within the BrickFTP site are our training documents: (Three for each product) A completion guide, instructions and an example. This documentation should be downloaded and reviewed in conjunction with the video and testing.

Within the video there will be instructions on how to contact us to have the tests sent to you. These tests will be sent through SurveyMonkey, which is a third party site. You are required to get a 90% or better on each test to be eligible. If you fail the test the first time a wait period of a week is enforced before a new test will be sent to you. If you fail the test twice, you will not be eligible to complete that particular product. We do allow you to review the documentation while taking the test, so these are essentially open book tests to ensure you pass.

Each of these products pays $50. The typical turn time for the AppraisalX is 24 hours from assignment. The ARA has two different turn times based on the clients’ needs. One is 24 hours, and the other is 12 hours (or basically the next morning).

Below you’ll find the link to our BrickFTP site as well as the login information you will need to access the video and training documentation. When you login to the site, click the upper left icon that says “All Files”. This will take you to the videos and documentation. You do not need to download any additional software to view these files. The website does have an option, but we don’t recommend this.


Username: HybridAppraisalTraining
Password: training@1234!

If you have any additional questions regarding this, feel free to reach out to me directly.

Thank you again and we look forward to working with you!

Sean Buford
Sr Valuation Analyst > Loan Services > Property Solutions
T +1 303 895 2858
8742 Lucent Boulevard, Highlands Ranch, CO 80129

Because firms like this and their clients believe they can reliably value property through automation despite clear evidence they can’t. Their clients don’t seem to care about valuation reliability because of the need to drive more lending as profits have waned as well as the moral hazard created by the federal backstop used in 2008. The taxpayers will bail these institutions out.

Our industry has a weak voice, largely from a combination of self-loathing, ineffective trade group leadership and the shear nature of the largess of the financial institutions that lobby against us. We are the last resort for the consumer and taxpayer, but ultimately regulatory authorities have yet to prove they care.

OFT (One Final Thought)

And you thought Millennials were hard to understand:

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 overprice their listing;
– You’ll rake the carpet;
– And I’ll dig out my rotary dial telephone.

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
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