Bicycles and Rock Lobsters Can Change Your Housing Outlook

I’m nearly a third of the way into my Tour de France watch-a-thon, a 7-hour per day, 23-day guilty pleasure every July. I just let the NBC feed run on my iPhone with the sound off and periodically glance at it to check up on changes. Forget staring at fishtanks for soothing relaxation. The amazing countryside scenery makes it well worth the time.

So with that frame of mind, here is my biking analogy of the week. It only takes two to bring everything down. Watch this in its entirety on a big screen if possible.

But I digress…

A Shout Out To My Columbia Grad Students

It’s that time of year again to teach Market Analysis in the Master of Science in Real Estate Development (MSRED) Program at Columbia University. It’s a strong program if I do say so myself. If the quality of student participation in yesterday’s first class was any indication, this semester is going to be engaging and fun for all of us. Plus the terrific faculty and alumni support make this position a dream for me.

Remember, a down residential housing trend goes like this:

EXTERNAL EVENT> (i.e. new tax law) >
SALES DECLINE > (buyers pause until fully understand)
LISTING INVENTORY RISES > (sellers remain in denial)
1-2 YEARS PASS > (sellers don’t sell unless they get their price)
PRICES ERODE > (sellers capitulate to the market)

Since the real estate brokerage community is transaction-based, I’ve never understood why the industry never spoke about a downturn directly. With greater transparency over the past decade, the smarter, more successful brokerage firms embrace market changes as an opportunity to educate sellers on the market reality that “the housing market doesn’t care what you think.”

Market Report Gauntlet: Elliman Report Q2-2019 Westchester, Putnam & Dutchess Sales

We just completed “week 2” of our four-week quarterly market report gauntlet for Douglas Elliman, part of the expanding Elliman market report series I’ve been authoring for the past 25 years.

Let’s start with Westchester County, New York, an affluent suburban market to the North of New York City.

• Elliman Report: Q2-2019 Westchester Sales
• Elliman Report: Q2-2019 Putnam/Dutchess Sales

Wall Street loves Westchester housing news because many in the securities industry live there. The Bloomberg coverage of our Westchester research was the third most read story on the 350,000± Bloomberg Terminal subscribers worldwide.

Even more fun – a chart, obviously.

Here’s an outline of the northern counties and some charts


“Countywide sales continued to expand as price trend indicators showed mixed results.”

– Countywide sales have increased at a rising annual rate for the fourth straight quarter
– The largest annual sales growth occurred in the $800,000 to $1,000,000 range
– Co-op and condo sales gained market share over single and 2-4 family sales
– Single family sales surged and outpaced the rise in listing inventory
– Single family listing inventory expanded annually over the past five quarters
– Luxury single family price trend indicators fell short of year-ago levels
– Luxury single family listing inventory declined annually for the third time in four quarters

And who wouldn’t like being superimposed on a chart?


“The second fastest paced quarter in fifteen years.”

– Median sales price increased year over year for the ninth straight quarter
– The number of sales rose annually for the third time in four quarters
– Listing inventory fell year over year for the second time in three quarters


“The surge in sales overpowered the growth of listing inventory.”

– Median sales price declined year over year for the first time in nine quarters
– The number of sales rose year over year for the second time in three quarters
– The pace in the market moved sharply faster than the same period last year

Market Report Gauntlet: Elliman Report June-2019 Manhattan, Brooklyn & Queens Rentals

Despite an uptick in the Manhattan sales market, the Manhattan rental market continued to show strengthening trends. Incidentally, the new rental law passed in Albany has not played a role in the open market rental market yet that would show up in the trends.

But I digress.

The city rental market continues to see rising rents and falling market share of concessions. Rents are rising.

Elliman Report: June-2019 Manhattan, Brooklyn & Queens Rentals

Because I’m partial to charts, here’s the Bloomberg story featuring our research that ranked 16th most read yesterday worldwide:

Here are some of the key observations and charts for each borough.


“Landlord concession market share continued to decline but remain a significant part of the rental housing market calculus.”

– Landlord concession market share declined year over year for the fifth time in six months
– The net effective median rent has risen annually each month since the beginning of the year
– Rent growth skewed to smaller apartments as market share gains skewed to larger apartments
– New development median rent increased at three times the rate as existing median rent
– Median annual rent gains were most pronounced in the 61% to 90% price strata
– The lowest year over year price growth was seen in the luxury and super luxury markets


“The market continued to pivot away from concessions as rental prices continued to rise.”

– Concession market share declined annually for the sixth straight consecutive month
– All three face rent trend indicators have been rising annually since July 2018
– Net effective median rent rose year over year for the seventh consecutive month


[Northwest Region] “Rental prices pressed higher as landlord concession market share declined.”

– The annual change in concession market share fell sharply for four consecutive months
– Net effective median rent rose annually for the seventh time in eight months
– New development concessions have experienced a more pronounced decline than concessions for existing rentals

Market Report Gauntlet: Elliman Report Q2-2019 Brooklyn, Queens & Riverdale (Bronx) Sales

Here are some key observations on these three NYC sales markets.


Elliman Report: Q2-2019 Brooklyn Sales

“Although median sales price reached a new record, sales slipped annually for the sixth straight quarter.”

– Median sales price set a new record this quarter for the seventh time in three years
– The number of sales declined year over year for the sixth straight quarter
– Listing inventory expanded annually for the fourth consecutive quarter
– Sales from $1-2 million and $4 -10 million were the only price strata to see an increase
– Luxury listing inventory increased year over year for the fifth consecutive quarter
– New development sales surged as price trends showed mixed results


Elliman Report: Q2-2019 Queens Sales
“Price trend indicators flirted with records as sales continued to slip.”

– Median sales price rose annually to the second highest on record and thirteenth quarter without a decline
– The seventh consecutive quarter with a year over year decline in sales
– Listing inventory increased annually for a ninth straight quarter
– Co-op median sales price reached its second-highest mark after setting records in six of the seven previous quarters
– All 1-3 family price trend indicators rose year over year for the thirteenth straight quarter

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

Elliman Report: Q2-2019 Riverdale Sales
“Price trends pressed higher as sales fell short of year-ago levels.”

– Median sales price rose year over year for the fifth straight quarter
– Number of sales fell annually for the fourth time in five quarters
– Listing inventory moved higher year over year for the fourth consecutive quarter

Albany Legislators Need To Consider Economics For Future Tax Revenue

Since last fall, the Albany legislature has turned New York’s real estate environment upside down. Best intentions I’m sure, but no evidence of understanding of how a real estate economy works, which is needed to generate the revenue needed to fund an expanding budget. Worst of all we’ve seen this movie before (1960s, 1970s and 1980s).

Failed Amazon Deal in Long Island CityThe outcry against it was based on a false common lack of understanding that the city was going to outlay billions to a rich company, when in fact the tax break was coming out of the additional revenue Amazon would provide.

Proposed/Failed “Pied-a-terre tax” – I was reading The Real Deal online this morning and a video with me speaking popped up! It was from March and I had forgotten about the interview – my short term memory is pretty weak. The overturned proposal would have decimated real estate development and investment.

The updated mansion tax and transfer tax – placed a wet blanket on an already struggling new development market. Because the high-end market was so weak, sellers and developers will be forced to cover the cost. The real damage to the market is the global image NYC is creating as a hostile place for investment.

The new rent law – the changes will ultimately decimate the multifamily sales market and effectively end all building improvements. We are already hearing about layoffs of construction workers by landlords who upgraded apartments as they became vacant. State legislators removed all financial incentives to renovate a multifamily property in New York State, likely crushing the multifamily sales market going forward. We are hearing that landlords are stopping renovations – look for the quality of affordable housing stock to deteriorate over the coming years. A repeat of the In Rem housing crisis of the NYC metro area of the 1970s and 1980s is here.

Econ Insight Episode 41 — Real Estate Boom or Bust?

My friend Alex Heil, Chief Economist, Planning & Regional Development of The Port Authority of New York and New Jersey asked me to do another podcast but this time it was culled from my multi-agency presentation at the Port Authority – they step you through my presentation and inserted some of my audio. My first podcast for PANYNJ was back in September 2015 right after the market peaked: Housing and the Metro New York Economy

If you’re not signed up to “Econ Insight” by the Port Authority, it is a good idea to subscribe to their newsletters and podcasts for great monthly snapshots and other insights on the NYC metro area regional economy.

[click anywhere on the image to play podcast]

Here is the first page of June PANYNJ Monthly Economic Indicators newsletter which provides some of the information from my presentation. Great info on these pages every month.

Realogy Sues Compass, Realogy Gets Sued By Investors

There was a big Wall Street Journal story this week: Compass Engaged in Illegal Activity, Realogy Lawsuit Alleges

Here’s the formal complaint

This is a good read for all of you non-lawyers out there. Realogy names names and is incredibly direct against the practices of Compass. It really is a good read.

Of course, if you’re a Realogy fan, no good deed goes unpunished. Realogy was just hit with a class action lawsuit.

From the Real Deal today: On heels of Compass legal battle and dwindling stock, Realogy hit with securities fraud suit

Getting Graphic

Len Kiefer‘s Chart Handiwork


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

Taking a break this week

Even though there was a lot of important things to discuss here like the one year North Dakota waiver, I simply ran out of time this week if you haven’t noticed the early content in these Housing Notes.

OFT (One Final Thought)

Speaking as wanna be lobster fisherman, I’ve always loved this song. Who knew that this band would get so popular? Always loved their playful vibe. I was a sophomore in college when this came out and wore out the album. So different than the hairband stuff that dominated the airwaves back then.

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 rent;
– You’ll rock lobster;
– And I’ll talk a lot.

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

Reads, Listens and Visuals I Enjoyed

My New Content, Research and Mentions

Recently Published Elliman Market Reports

Appraisal Related Reads

Extra Curricular Reads