Squaring Off The Housing Rental Market

July 14, 2023

Stress: I knew I could match the shapes to the appropriate slot. But apparently, I can’t think outside of the square box. I’ll stick to housing. [Sound on]

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Did you miss last Friday’s Housing Notes?

July 7, 2023: The Double Wide Housing Market

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A Weekly Shout Out To My Columbia Grad Students

Our first class of the summer semester was held on the Columbia University campus this week, and my ±150 students powered through the soaring summer heat to survive my three-hour lecture (with an arguably inadequate supply of dad jokes). They were eager to absorb and peppered me with terrific questions and observations. I’m really looking forward to our next class.

But I digress…

Manhattan Rental Prices Take A Respite From Breaking Records

I’ve been the author of the expanding series of market reports for Douglas Elliman since 1994. It’s been a good run, and I love the craft of market analysis.

In recent years, the rental report has gained outsized traction than other reports because it reacts more quickly to changes in the sales market, which is a slower-moving asset class.

Douglas Elliman published our June research on the Manhattan, Brooklyn, and Northwest Queens rental markets.

Bloomberg did a chart on it in their coverage:

Elliman Report: June 2023 Manhattan, Brooklyn & Queens Rentals

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MANHATTAN RENTAL MARKET HIGHLIGHTS

“After three months reaching new highs, median rent slipped to the second-highest on record.”

– Net effective median rent and median rent slipped month over month to the second highest on record
– New lease signings continued to see a seasonal rise with an expected late summer peak
– Listing inventory continued to expand but at a cooling rate since the beginning of the year
– Non-doorman and doorman median rental prices reached new highs
– Landlord concession market share remained higher for new development than existing leases
– Luxury median sales price was the second-highest on record
– Luxury days on market fell to their lowest level in four years

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BROOKLYN RENTAL MARKET HIGHLIGHTS

“Median rent reached a new high for the third consecutive month.”

– Net effective median rent and median rent reached new highs for the third consecutive month
– New lease signings declined annually for the second time in three months
– Listing inventory declined annually for the first time in seven months

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QUEENS RENTAL MARKET HIGHLIGHTS

[Northwest Region] “Median rent reached a new high for the second time in three months.”

– Net effective median rent and median rent reached new highs for the second time in three months
– New lease signings declined annually for the third consecutive month
– Listing inventory rose year over year for the fourth straight month

VIDEO Appearance on Bloomberg Surveillance July 11th

My discussion on housing with Tom Keene and Lisa Abramowicz starts in about the 2 hour, 18 minute mark. They are my faves. I’ve always found the Bloomberg Surveillance TV and Radio shows are essential sources of economic information.


[click image to play – starts at 2:18:00 or click on video below]

When A Bedroom Shows A Visual Risk

I’m not sure I’d be able to sleep soundly here since the extreme design promotes hyperawareness.

Westchester County Remains Devoid Of Listing Inventory

Compared to New York City, the listing inventory situation is far more depleted. Our second quarter market reports covering Westchester County and Putnam/Dutchess Counties present this situation.

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WESTCHESTER SALES MARKET HIGHLIGHTS

Elliman Report: Q2-2023 Westchester Sales

“Median price tied for the highest second quarter on record.”

– Listing inventory fell by nearly a third year over year to the third-lowest on record
– Median sales price rose annually to the third-highest quarter on record
– Bidding wars nearly doubled quarter over quarter, nearly half of all sales, the third-highest on record
– Luxury listing inventory slipped annually for the second straight quarter
– Luxuryedian sales price slipped annually for the third consecutive quarter
– Luxury bidding wars reached nearly four out of ten sales

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PUTNAM SALES MARKET HIGHLIGHTS

Elliman Report: Q2-2023 Putnam/Dutchess Sales

“All price trend indicators reached their third-highest levels in history.”

– All price trend indicators slipped annually from year-ago records to the third-highest in history
– Listing inventory fell by a third to the third-lowest on record
– The number of sales fell year over year for the seventh straight quarter

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DUTCHESS SALES MARKET HIGHLIGHTS

Elliman Report: Q2-2023 Putnam/Dutchess Sales

“Median and average sales price reached their second-highest levels in history.”

– Median sales price rose annually from the year-ago record to the second-highest in history
– Listing inventory fell sharply year over year to less than half of pre-pandemic levels
– The number of sales fell year over year for the sixth straight quarter

The Con: A 2008 Documentary On The Financial Crisis

Many of my colleagues and I were interviewed for this documentary in 2018 at the Appraiserfest Conference in San Antonio. You can now watch all five episodes of The Con for free!

An in-depth investigation into the 2008 financial crisis: who did it, why it happened, and how the con is what we are and the reason everything is $crewed up

Brooklyn, Queens and Riverdale, Plagued By Shortage Of Listings

Here is a round-up of the remainder of our New York City coverage.

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BROOKLYN SALES MARKET HIGHLIGHTS

Elliman Report: Q2-2023 Brooklyn Sales

“Median sales price remained at the third-highest level on record for the third straight quarter.”

– Median sales price slipped from the year-ago record to the third highest
– Sales fell sharply year over year, consistent with the second quarter decade average
– Listing inventory fell annually for the fifth straight quarter


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QUEENS SALES MARKET HIGHLIGHTS

Elliman Report: Q2-2023 Queens Sales

“Price trend indicators slipped year over year for the third straight quarter.”

– Median sales price slipped annually for the third straight quarter
– Sales fell from the year-ago housing boom and were on par with pre-pandemic levels
– Listing inventory declined year over year for the second time in three quarters

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RIVERDALE SALES MARKET HIGHLIGHTS
[includes Fieldston, Hudson Hill, North Riverdale, and Spuyten Duyvil]

Elliman Report: Q2-2023 Riverdale Sales

“While price trend indicators slipped annually, they remained well above pre-pandemic levels.”

– Median sales price slipped year over year for the second time in three quarters
– Listing inventory declined annually for the fifth quarter
– Number of sales declined year over year for the fourth consecutive quarter

The View From Apollo Podcast: Mid-Year Outlook: What’s next for the US economy, inflation, and the Fed?

Torsten Slok is my favorite economist on the topic of housing – whose work I’ve followed for years and feature a lot of his charts at the bottom of these weekly Housing Notes.

This is an essential listen on the economy and the state of housing.


[clink on image to play or subscribe]

VIDEO: NYRS ® Data Dig In

When I’m able to talk markets and data with my pals Noah Rosenblatt of Urban Digs and Kael Goodman of Marketproof, I’m all in.

We did a “data dig in” yesterday:

Explainer: Me As An Appraiser vs. Market Analyst

I’ve been a real estate appraiser since 1986, having personally inspected and analyzed more than 8,000 properties. I added the market analyst title in 1994 when I began developing market reports for Douglas Elliman Real Estate, now more than 200 per year and teach market analysis for the MRED graduate program at Columbia University. Because the market reports get national attention, bringing them to television, radio, and speaking engagements gets our Miller Samuel brand oversized attention. To be clear, we are a real estate appraisal firm doing market analysis.

So I jumped at the opportunity when invited by Douglas Elliman Real Estate to explore the appraisal side of my experience. They just published a spotlight piece: More Than Market Reports: Jonathan Miller on the ‘Fun’ of Appraising Real Estate in NYC.

Jonathan Miller has been called many things over his nearly 40 years in New York City real estate, from the reverential descriptors “go-to expert,” “market guru” and “data whisperer” to the more effusive “oracle,” “true Rockstar” and—our personal favorite—”the DJ Khaled of real estate.”

Although he appreciates the many flattering appellations, Miller would prefer they didn’t tend to overshadow the title that best speaks to the core of his business: appraiser.

and this:

To illustrate the point, he recounts a favorite anecdote of conducting an estate appraisal of a downtown Manhattan condo, where he arrived to find a brood of live chickens in the cigarette-smoke-filled living room, before racing uptown to assess a palatial Upper East Side townhouse between Fifth and Madison.

Getting Graphic

My favorite housing market/economic charts of the week made by others

Post by @stockcharts
View on Threads

Apollo’s Torsten Slok‘s amazingly clear charts.

Kastle card swipe data charts

Remember that Kastle charts are overstating occupancy* because their pre-pandemic occupancy benchmark was 100% which is simply incorrect (*measures card swipe activity as a proxy for occupancy).

My favorite random charts of the week made by others

Post by @stockcharts
View on Threads

Appraiserville

Cosmic Cobra Guy: FNMA Accounts For Nearly Half Of All Appraiser Complaints In Texas

The high volume complaints to the state are unsigned and there is no way to contact the accuser. This is going on nationally, not just in Texas.

Jeremy Bagott’s column this week: FREDDIE, FANNIE’S FULL-EMPLOYMENT PROGRAM FOR TEXASBUREAUCRATS.

Cincinnati appraiser Kristine Bertrand received a letter from her state informing her she was under investigation after Fannie had sent a computer-generated complaint to her state board. It was based on her selection of comparables in an early pandemic-era appraisal.

“Fannie didn’t like any of my comparable choices,” she said. “[The complaint] was very vague. It didn’t provide an alternate value. The letter contained no contact information. I wasn’t able to face my accuser.”

“I don’t think the states should be even accepting these as complaints against appraisers if there’s no signature,” said Phil Crawford, host of the Voice of Appraisal podcast. “In this case, you’re just dealing with this gigantic corporation out there saying [you] didn’t do it right and the next thing you know, you have to defend yourself against the Fannie Mae version of a ‘Zestimate.’”

OFT (One Final Thought)

The cat represents the Fed interfering with the flow of the housing market but eventually it all will work out.

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons at 2 p.m.) 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 fit the square peg in the round hole;
– You’ll get the ping pong ball in the glass jar;
– And I’ll talk about the housing market.

Brilliant Idea #2

You’re clearly full of insights and ideas as a reader of these Housing Notes. Please share them with me early and often. I appreciate every email I receive, as it helps me craft the following week’s Housing Note.

See you next week!

Jonathan J. Miller, CRE, Member of RAC
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

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