Lawn Chair Precision Shows Us Folding Chair Sanity In A La-Z-Boy Housing World

Why? Because they can – and for the past 36 years. Arguably the past four months of fed policy have felt like we’ve been carrying a La-Z-Boy for 36 years.

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 a fire alarm and the 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. Perhaps the biggest lesson of the day was that being on time, means being 5 minutes early!

See you next week!

But I digress…

This week’s read is a short one but long on charts!

Manhattan Rental Frenzy Despite Office Towers That Are 60% Empty

I’ve been the author of an expanding series of market reports for Douglas Elliman Real Estate since 1994. Douglas Elliman just published our June rental market research and the results were record-setting.

While all three boroughs tracked showed price records for average and median rents, there is likely more room for addition growth. Manhattan average rents reached the $5,000 threshold for the first time in history, mainly because mortgage rates are surging after the pivot in the fed policy this spring. Because mortgage underwriting hasn’t normalized, remaining tighter than normal since the great financial crisis, would-be home buyers priced out of the market are being pushed into the already tight rental market, making it even tighter. On top of that, New York City leasing season doesn’t;t peak until August, so we anticipate more demand in the coming months, pushing rents up further.

Bloomberg had a cool chart median rent chart cracking the $4K threshold last month:

And that article became the fifth most read article world wide on the 350K Bloomberg Terminals. I guess the world worries about their rents.

But there were other charts like this monster from the NY Post.

And this one from Axios that shows quite a spike from the depths of the pandemic.

Elliman Report: June 2022 Manhattan, Brooklyn & Queens


“Average rent reached the $5,000 threshold for the first time as the vacancy rate remained under 2%.”

– Average rent reached the $5,000 threshold for the first time as median rent set a record for the fifth straight month
– New leases expanded month over month for the fifth consecutive time
– The vacancy rate remained under two percent for the seventh straight month
– Doorman’s net effective median rose to a record as landlord concessions fell to a new low
– Non-doorman net effective median rent reached a new high for the third straight month
– Luxury net effective median rent rose to a new high as landlord concessions fell to a new low
– Luxury market share of bidding wars exceeded non-luxury market share of bidding wars for the fourth straight month


“Net effective median rent reached a new high for the second straight month as landlord concession continued to fall.”

– Net effective median rent rose to a new high for the second straight month
– Landlord concession market share fell annually for the thirteenth straight month
– Bidding war market share occurred in more than one out of five leases for the fourth consecutive month


[Northwest Region] “Rental prices remained elevated as the market share of landlord concessions continued to fall.”

– Net effective median rent and median rent reached their second-highest levels on record
– Landlord concession market share fell to its lowest in nearly six years
– While new lease signings fell annually, they were higher than the same period three years ago pre-pandemic

Mortgage Rates Started Rising Again, Placing More Pressure On Rents

Apparently, TikTokers Might Quote Housing Experts Out Of Context: Who Knew?

A few weeks ago I shared my Bloomberg Radio interview by my friend Barry Ritholtz for his must-listen show “Masters In Business,” and something I said was exaggerated by Business Insider and then picked up by this TikTok guy. A bunch of real estate people started to share it with me, but it was a bit surreal seeing him parrot all I said to Barry. But the video went semi-viral with 22,000 views, up from his usual few hundred, so there’s that, I guess?

Here’s the transcript of my Bloomberg Radio interview with the specific segment mentioned below:

RITHOLTZ: So if you’re a contrarian, you become a buyer in the summer of 2023?

MILLER: Yes. Yeah, I think so. And what I find interesting is that, you know, when people look at pivoting conditions, pivoting markets, you upend the word forever, like prices are falling forever, prices are rising forever. It’s like this linear view. And if you look at some serious downturn periods in the housing market, like the housing bubble, you know, 15 or so years ago, 13, 15 years ago, really, prices really didn’t recover. It took about six years. But activity actually returned pretty quickly by late 2009, early 2010. So this isn’t like a decade or, you know, a generational thing. You know, it’s a shorter window than that.

@aaronknowshomeloans “Best Time to Buy a House will be Summer 2023 Says 30-Year Real Estate Expert. Is He Right?” #economy #besttimetobuyahouse #inflation #recession #mortgage #mortgages #realestateinvesting #mortgagerates #housingmarket #realtor #interestrates #realestate #housingbubble #homebuyertips #firsttimehomebuyer #housingcrash #housing #bubble ♬ original sound – Aaron Gordon

Blown Deals At Their Highest Since 2020

So 14.9% of contracts in June fell apart according to Redfin, but that’s not a crazy high number – I recall it was closer to 30% during the Great Financial Crisis. But it does tell us two things:

– Surging mortgage rates are straining buyers efforts to purchase homes and this number is likely to rise.
– Contract data is very fillable despite it being more current than closed data – how informative are contracts to market trends when a large chunk of them never close. Just like much to do with housing and market analysis, measuring trends takes understanding of a lot more than one metric.

Getting Graphic

My favorite charts of the week of our own making

My favorite charts of the week made by others


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

CRE® Top Ten Issues Affecting Real Estate – Chock Full Of Insights

I’m a proud member of the Counselors of Real Estate and every year they publish their Top Ten. It provides useful insights to all walks of the real estate industry.

[click to read the issues]

OFT (One Final Thought)

Here are some alternative versions of a “soft landing” that are certainly more entertaining than the “hard landing” the Fed seems to be steering us toward. Be sure to watch all four – with the last one being my favorite.

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 be armchair quarterbacks;
– You’ll land softly;
– And I’ll crash.

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

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