By the end, I was rooting for each one.
A Weekly Shout Out To My Columbia Grad Students
Our second class of the summer semester was held on the Columbia University campus this week, and my ±150 students have to be one of the most engaged groups of students I’ve had.
During the class, I recommended Kathy Clarke’s must-read book, Billionaires’ Row, because it so smartly covers the real estate development world, and our class is part of the graduate masters program in real estate development within the architecture school at Columbia University. No, I didn’t recommend it because I got 14 mentions in the book’s index (only amateurs count these things). This book is NOT part of your quizes or exams. Ha. It’s merely to help you gain insights.
Incidentally, back when this Midtown submarket’s name began to evolve and become embedded in new development nomenclature, I would immediately think of “row” as a “fight,” and this was about a fight to build the tallest structures in the housing market. I still think that makes sense. There are other markets nicknamed “Billionaires’ Row.” I immediately think of the one in Palm Beach. I asked my pal “Ask AI” on my iPhone and it gave me two others:
“Billionaires’ Row” is a term that has been used to refer to several high-end residential areas in the United States. While there isn’t a single definitive location known as “Billionaires’ Row,” there are a few notable areas that have been associated with this nickname. Here are a few examples:
1. New York City, New York: One of the most famous “Billionaires’ Rows” is located in Manhattan, specifically along 57th Street, between Park Avenue and Eighth Avenue. This area is known for its luxury high-rise residential buildings and has attracted wealthy individuals from around the world.
2. Miami, Florida: In Miami, a stretch of Collins Avenue in the South Beach neighborhood has also been referred to as “Billionaires’ Row.” This area features high-end condominiums and luxury waterfront properties.
3. Los Angeles, California: In Los Angeles, there is a section of North Hillcrest Road in the Trousdale Estates neighborhood of Beverly Hills that has been dubbed “Billionaires’ Row.” It is known for its exclusive and opulent mansions.
Did you miss last Friday’s Housing Notes?
July 14, 2023: Squaring Off The Housing Rental Market
But I digress…
Connecticut Has Plenty Of Nutmeg But Little Listing Inventory
I’ve been the author of an expanding series of market reports since 1994 for Douglas Elliman Real Estate. My home state of Connecticut has been devoid of supply since the beginning of the pandemic-era, which has kept housing prices relatively stable.
FAIRFIELD COUNTY SALES HIGHLIGHTS
Elliman Report: Q2-2023 Fairfield County Sales
“All price trend indicators rose to new records as listing inventory fell sharply.”
– All price trend indicators rose annually to their highest levels on record
– Sales fell year over year every quarter for the past two years
– Listing inventory fell sharply to a near-record low as the bidding war market share reached a near-record high
– All luxury price trend indicators rose annually to their highest levels on record
– Luxury listing inventory fell annually for the first time in four quarters
– The luxury entry threshold rose to a record high as the segment moved further from the overall market
GREENWICH SALES HIGHLIGHTS
Elliman Report: Q2-2023 Greenwich Sales
“Price trends remained mixed as low listing levels challenged consumers.”
– Single family median sales price rose annually for the fifteenth consecutive quarter
– Single family listing inventory declined annually for the sixteenth time in seventeen quarters
– Condo price trend indicators posted significant annual gains as listing inventory fell annually for the second time in three quarters
– Luxury median sales price rose year over year for the first time in three quarters
– Luxury listing inventory fell sharply year over year for the second time in three quarters
NEW CANAAN SALES HIGHLIGHTS
Elliman Report: Q2-2023 New Canaan Sales
“The market share of bidding wars exceeded half of all sales.”
– Single family median sales price rose annually for the fourteenth time in fifteen quarters
– Single family listing inventory fell year over year for the first time in three quarters
– Condo price trend indicators surged above the year-ago quarter as listing inventory hasn’t seen an annual increase in nearly two years
Business of Home Podcast: A Real Estate Check-In With Jonathan Miller
I joined Dennis Scully again on The Business of Home podcast: The Thursday Show: A real estate check-in with Jonathan Miller, why Gen Z loves dupes and more. A lot has happened since our previous conversation back in July 2022. Other than having quality issues with my microphone, I really enjoyed the conversation. It starts at the 25:22 mark.
Florida Sees Growth In Listing Inventory But It Remains Unusually Limited
We produce quite a few market reports in Florida for Douglas Elliman Real Estate and there was general consistent in the second quarter results:
Notable coverage of our Palm Beach report:
MARKETS [alphabetical order]
Elliman Report: Q2-2023 Boca Raton
Elliman Report: Q2-2023 Coral Gables
Elliman Report: Q2-2023 Deerfield Beach
Elliman Report: Q2-2023 Delray Beach
Elliman Report: Q2-2023 Ft. Lauderdale
Elliman Report: Q2-2023 Jupiter/Palm Beach Gardens
Elliman Report: Q2-2023 Lighthouse Point
Elliman Report: Q2-2023 Manalapan
Elliman Report: Q2-2023 Miami Beach
Elliman Report: Q2-2023 Miami Mainland
Elliman Report: Q2-2023 Naples
Elliman Report: Q2-2023 Palm Beach
Elliman Report: Q2-2023 Pompano Beach
Elliman Report: Q2-2023 St. Augustine
Elliman Report: Q2-2023 St. Petersburg
Elliman Report: Q2-2023 Tampa
Elliman Report: Q2-2023 Vero Beach
Elliman Report: Q2-2023 Wellington
Elliman Report: Q2-2023 West Palm Beach
Elliman Report: Q2-2023 Weston
More markets are in development!
FLORIDA REGIONAL HIGHLIGHTS
Most Q2-2023 Florida markets we cover are seeing the following results:
– Sales remain below the year-ago frenzy that characterized the pandemic-era housing boom, but most markets experienced a robust, greater-than-seasonal quarterly increase
– Despite fewer sales, listing inventory has been slow to recover with modest gains, yet remaining at half the levels seen pre-pandemic
– The supply shortage has continued to provide a firm underpinning for prices. Many markets experienced stable to rising prices, and those that declined tended to experience a shift to a smaller average size
– Besides firmer pricing, bidding wars remained prevalent, accounting for five to fifteen percent of all sales in many markets analyzed
– The pace of the market, also known as months of supply, remained slower than the year-ago frenzy but accelerated again in the new year
Random sample of charts found in our gallery
Knight Frank Provides Global Insights On Residential Real Estate: Soft Landing
Knight Frank works with Douglas Elliman to provide world wide exposure of all their sales listings. Their alliance has been widely copied by other New York-based brokerage firms. The wrote about our cash stats:
New Glut City: The Best Commercial Real Estate Cover In History
The featured article was sobering and pulled no punches and was absent of hype:
Other stories in the feature:
When You Don’t Have Metrics To Measure Occupancy (Not Leasing) In Real Time
Since the pandemic began, we found ourselves challenged by understanding the state of the office markets with the insertion of work from home into the narrative and no metrics to cover actual use:
Kastle data became part of our toolbox to measure the office market. It was problematic because it compares to pre-pandemic as 100% occupancy (so its results are too high) and we don’t understand the product mix – it likely skews to larger Class A buildings which might be hit harder than smaller buildings. It stuck at 50%, relying on security card swipes.
REBNY Manhattan Office Building Visition Report entered the scene this year using Placer.AI using GPS coordinates from 30 million mobile devices. REBNY is a trade group and their data seems stuck at 61%.
Hudson Yards Mega Discount Reflect Market Change
There was an epic Wall Street Journal piece on the shift in prices at Hudson Yards, a beautiful new neighborhood development launched before the pandemic.
I admired the quotes from a real estate agent selling her place there at a loss – she literally “owns it.”
“I can’t beat myself up,” she said. “You always take a risk when you step into a new product. That’s just the nature of the beast.”
I do that when I speak about the new home we bought last summer, beating 36 other buyers and paying 36% above the ask. We love the house, and the comps show we paid more like 10-15% over ask because the listing agent clearly set the price low to create a frenzy. Who cares? We love our new home. Own it.
What’s so striking about Hudson Yards is that they had a massive backup of pre-orders and had a reputation for not negotiating. I’m glad to see Related acknowledge market conditions—another reason they are one of the best developers.
Downtown Boston Sees Sales Slide But Solid Pricing And Chronically Low Inventory
This submarket is largely comprised of luxury real estate. Bisnow provided a great summary of our Douglas Elliman Report on the Q2-2023 Downtown Boston market.
Condo Sales Volume In Boston Falls 34%, Sixth Straight Quarter Of Slowdown [Bisnow]
Elliman Report: Q2-2023 Downtown Boston
DOWNTOWN BOSTON SALES HIGHLIGHTS
“Bidding war market share surged to its highest level in five years.”
– Median sales price rose annually for the seventh time in eight quarters
– Sales declined year over year for the sixth consecutive quarter
– Listing inventory fell annually for the eighth time in nine quarters
“Listing inventory continued its two-year trend of seeing year over year declines.”
– Median sales price rose annually for the seventh time in nine quarters
– Sales fell short of the prior year’s sales boom for the fourth consecutive quarter
– Listing inventory fell year over year for the fourth time in eight quarters
Strict Parking Rules in Multi-Family Housing, Illustrated
— Shit Planning (@PlanningShit) July 18, 2023
Now What: SF’s Millenium Tower Is Seeing Its Windows Blow Out
We tend to be bombarded with success stories of residential towers with their views and amenities. In order to recognize the severe financial risks developers are willing to take (I certainly couldn’t), not all stories turn out happy.
Developers are retrofitting 3,000 windows after spending $100 million in pilings to stop the building from leaning. Who thought building a tall, heavy glass tower on the sand was a good idea?
Millennium Tower, completed in 2009, went from being the city’s poshest condo tower to a symbol of the excesses of the city’s tech gold rush five years later when it was revealed that the building was leaning 24 inches to the west and 7.9 inches to the north.
This NBC TV reporter has doggedly been covering this building nightmare.
My favorite housing market/economic charts of the week made by others
Median weekly earnings for full-time workers in the U.S. reached $1,107 in the second quarter of the year — up 5.6% from the same quarter in 2022, according to government data out Tuesday. https://t.co/LZWexE6edk
— Axios (@axios) July 20, 2023
@LanceLambert, Real Estate Editor of @FortuneMagazine Churns Out Great Housing Visualizations
#NEW Zillow home price data for America's 30 largest metropolitan housing markets
1. MoM (month over month)
2. YTD (year to date)
3. Down from peak
4. YoY (year over year)
5. Change since March 2020
Seasonally adjusted, through June 2023 pic.twitter.com/93gZSy2t5f
— Lance Lambert (@NewsLambert) July 19, 2023
San Francisco's pandemic housing bubble has just about deflated. At least on an inflation adjusted basis.
While the honey badger market—Miami—just keeps racing to new all-time highs. pic.twitter.com/UkFZcVHDeh
— Lance Lambert (@NewsLambert) July 21, 2023
I blacked out the ‘07-‘11 housing correction.
Doing so, shows how the U.S. house price declines in the second half of ‘22 are historically unique. pic.twitter.com/LZhMNNTfOh
— Lance Lambert (@NewsLambert) July 17, 2023
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
You can't make this up:
The S&P 7, a handful of technology stocks, is now up an incredible 58% this year.
Meanwhile, the remaining S&P 493 is up just 4%.
AI hype and technology stocks are literally holding up the entire market.
Markets really believe AI is the next big thing. pic.twitter.com/MgL48sD03Y
— The Kobeissi Letter (@KobeissiLetter) July 18, 2023
Post by @nytimesView on Threads
The Inspiration For The Names: FOJ and FOD
Appraisal Institute Back when I began going after Jim Amorin, CEO of The Appraisal Institute hard in 2016 when National took all chapter monies in an obnoxious and selfish power play, I referred to his sycophants as FOJs or “Friends of Jim.” Even after his departure in February, Jim’s legacy endures as FOJs remain FOJs even though their power base is weakening. Think “Super Duper.” They still place their ongoing grift and faux elevated statuses over the needs of the hard-working AI membership.
The Appraisal Foundation – In the middle of the pandemic, in addition to my efforts against JA since 2016, it became apparent after working within TAF that Dave Bunton, president (or leader) of TAF since its creation 30+ years ago, that they were far more damaging to the industry than AI ever was. TaF is a monarchy run by Dave, and the people are largely in their positions because they are FODs or “Friends of Dave.” TAF has made all appraisers vulnerable to outside criticism by keeping the mentoring system as the method of entry and never tangibly addressing diversity. They have made our industry vulnerable as we sit in a bubble. According to BLS, we’re dead last or nearly dead last in diversity yearly, resulting in the public stereotype that “all appraisers are racist.” TAF is nearly devoid of diversity and works hard not to change the industry’s direction. Why?
I was reminded of this when I read about the former CEO of Countrywide Mortgage, Anthony Mozillo, who recently passed away. In the House investigation of the housing bubble, the “Friends of Angelo (FOA)” VIP program was investigated. If you’re curious, here’s the result of the FOA investigation.
In June 2008, Conde Nast Portfolio reported that several influential lawmakers and politicians, including Senate Banking Committee Chairman Christopher Dodd, Senate Budget Committee Chairman Kent Conrad, and former Fannie Mae CEO Jim Johnson, received favorable mortgage financing from Countrywide by virtue of being “Friends of Angelo.”
I applied that FOA label to the AI and TAF sycophants who placed their status and grift above those they served as FOJs and FODs. To be fair, some are oblivious of the inherent conflicts with their current positions, no matter how well-intentioned they claim to be. When you sit in a silo, you get no outside doses of reality.
The “FO_” label represents selfishness and awful personal ethics made even worse by an industry that needs authentic leadership in the current crisis, essentially furthered by the long time absenteeism in leadership by the organizations Jim and Dave had/currently run. The Appraisal Institute is moving to the light. Lets hope we can get TAF to do the same.
OFT (One Final Thought)
An extremely brave woman jumps from plane to plane to mid-air to change landing gear. 1926. pic.twitter.com/SNj21AzJk1
— Fascinating (@fasc1nate) July 18, 2023
Brilliant Idea #1
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Brilliant Idea #2
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See you next week!
Reads, Listens and Visuals I Enjoyed
- Buffett’s Florida Bet Bodes Well for Troubled Insurance Market [Bloomberg]
- New problems at the Millennium Tower worry yet another expert [Boing Boing]
- Inflation may be cooling, but the housing market is still too hot for many buyers [NPR]
- Just 1% of US homeowners sold their house in the first half of the year, leading to the lowest inventory of all time [Business Insider]
- Further Softening Expected for Homeowner Remodeling [JCHS Harvard]
- NAR: Existing-Home Sales Decreased to 4.16 million SAAR in June [Calculated Risk]
- Lynyrd Skynyrd’s Hell House lot going on the market [Clay Today]
- In South Florida real estate, home prices reach new high despite big drop in sales [Miami Herald]
- Angelo Mozilo, Whose Mortgage Giant Fell in Housing Bust, Dies at 84 [NY Times]
- How One Woman Narrowly Avoided a Bad Deal With a “We Buy Ugly Houses” Franchise [ProPublica]
- Homeowners Don’t Want To Sell, So Home Builders Are Booming [Wall Street Journal]
- Are the Landlords Bluffing? [Curbed]
- A Typology of Unwanted Manhattan Office Buildings [Curbed]
- Florida rocked by home insurance crisis: ‘I may have to sell up and move’ [The Guardian]
- WSJ News Exclusive | The Luxury Tower Built for New York’s Elite Still Sits Half Empty [Wall Street Journal]
- Southern California’s empty offices surge 67% in pandemic era [OC Register]
- NMHC: "Apartment Market Continues to Loosen" [Calculated Risk]
- Gas Stoves Are Barely a Blip in US Home Energy Consumption [Bloomberg]
- The Houses Frank Sinatra Called Home [Architectural Digest]
- See the Latest REBNY Office Visitation Report [REBNY]
- Wages are finally rising faster than inflation [Axios]
- ‘Soul-crushing’: converted Bay Area office apartment fail goes viral [The guardian]
- New Glut City [Curbed]
- Angelo Mozilo, Countrywide Financial CEO Who Became Face of 2008 Crisis, Dies at 84 [Bloomberg]
- Will house prices decline further later this year? [Calculated Risk]
- San Francisco Isn’t Destined to Be the Next Detroit [Bloomberg]
- Rent-Controlled vs. Rent-Stabilized: How Much Can a Landlord Charge? [NYTimes]
- In ‘warfare against renters,’ homeowners fight affordable housing push [NBC News]
- A hurricane wiped out their Florida beach homes. Then it made them unaffordable. [Politico]
- Detroit Takes On Problems That Were Once Beyond Reach [NYTimes]
- Mast Capital Sued Over Miami Beach Condo Buyout [The Real Deal]
My New Content, Research and Mentions
- New York to Singapore: These are the most expensive cities to live in for renters [Prestige Online]
- Palm Beach real estate slows in second quarter but stronger than before pandemic: Reports [Palm Beach Daily News]
- Condo Sales Volume In Boston Falls 34%, Sixth Straight Quarter Of Slowdown [Bisnow]
- Short Supply of Homes Keeps Prices Rising in South Florida [Mansion Global]
- New York’s surge in cash buyers, all eyes focus on New Zealand and China is set for more stimulus measures [Knight Frank]
- Prices In Downtown Manhattan Hit New Peaks [The Real Deal]
- Boca Raton, Delray Beach Real Estate Is Market All Over The Place [BocaNewsNow.com]
- Martha Stewart sells West Village condo for much less than hoped [Crain's New York]
- This $80,000 co-op is New York City’s cheapest apartment for sale [NY Post]
- Manhattan Apartment Rents Fizzle In June, Offering Some Relief [ZeroHedge]
Recently Published Elliman Market Reports
- Elliman Report: Fort Lauderdale Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Manalapan, Hypoluxo Island & Ocean Ridge Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Pompano Beach Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Naples Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Palm Beach Sales 2Q 2023 [Miller Samuel]
- Elliman Report: New Canaan Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Greenwich Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Fairfield County Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Downtown Boston Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Putnam & Dutchess Sales 2Q 2023 [Miller Samuel]
Appraisal Related Reads
- The value of a pool in real estate [Sacramento Appraisal Blog]
- Tips for Making a Successful Transition to a New City After a Personal Low Point [Cleveland Appraisal Blog]
Extra Curricular Reads
- The Lure of Urban Fishing [New Yorker]
- The Federal Reserve says Taylor Swift's Eras Tour boosted the economy. One market research firm estimates she could add $5 billion [CBS News]
- How to Get Rich in the Markets – The Big Picture [Ritholtz]
- An NFL linebacker quit football to sell Pokémon cards, now he's making millions [The Athletic]
- This Is the Town Booming With Money from San Francisco’s Drug Trade [San Francisco Chronicle]
- Mapped: The Most Dangerous Cities in the U.S. [Visual Capitalist]
- The Maverick Design Choices That May Have Doomed Titan [NY Times]