Housing Is Pivoting So Look Carefully At The Signs

Literally, look at the signs. There is nothing more satisfying than a sign war. Read the thread.

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 as usual, my ±150 students survived my three hour lecture and shared many additional insights. One of the charts that got the most attention was this one:

Looking at rents alone doesn’t necessarily provide enough context to understand the current condition:

And best of all, everyone was on time! Keep it up!

But I digress…

The Greenwich Housing Market Experienced The Last Gasps Of Its Pandemic Frenzy

I’m the author of an expanding series of U.S. market reports since 1994 for Douglas Elliman Real Estate. You can sign-up to receive them (and other cool stuff)here.

One of my favorite markets to cover has been Greenwich Connecticut. The reason has been the extent that luxury became disconnected from market conditions was astonishing. The specific period in question was from the peak of the housing bubble to several years before the pandemic began.

Bloomberg had a great piece on what is happening now and a pretty darn cool chart.


Elliman Report: Q2-2022 Greenwich Sales

“The number of sales declined but remained well above pre-pandemic levels.”

– Single family sales fell at the highest rate on record from the year-ago boom, but sales remained well-above pre-pandemic levels
– Single family median sales price hasn’t seen a year-over-year decline in more than three years
– Condo bidding wars rose to the second-highest share on record, accounting for nearly three out of ten sales
– Luxury market bidding wars nearly doubled annually to the second highest share on record
– Luxury median sales price rose annually for the eighth time in nine quarters


Elliman Report: Q2-2022 Fairfield County Sales

“Listing inventory nearly doubled quarter over quarter but still remained unusually low.”

– Bidding war market share county-wide rose to a new high, more than two-thirds of all sales
– Listing inventory nearly doubled quarter over quarter but remained historically low
– Overall price trend indicators increased annually and continued to be well above pre-pandemic levels
– Luxury listing inventory rose quarter over quarter for the first time during the pandemic era
– Luxury listing discount fell to a new low, reflecting an overall premium paid because of the record market share of bidding wars
– Luxury median sales price was the second highest on record and nearly fifty percent higher than pre-pandemic

Mega (Wall Street) Single Family Investors Are NOT The Dominators As Widely Assumed

From Calculated Risk’s Substack: Record Single Family Investor Buying in Q1, Possible evidence of Slowdown in Q2

For context on single family home investors, this chart is spectacularly clarifying since Wall Street is NOT dominating the space, it’s small and median sized investors.

My good friend and leading U.S. housing analyst Ivy Zelman describes the situation between builders and investors like this:

[Investors] are the ones that are canceling too, because when I was chatting with the builder in Boise and home prices are up 70%. They’re like, “Oh yeah, we’re seeing price cuts. We’re seeing incentives. We’re seeing huge cancellations”. So, when people are cancelling, are they saying why? And this builder said, oh, they’re just the investors that you know, realize home prices have peaked…

NY1 – Converting Office Space To Rentals Could Help, But Not Cost Effective

Here’s a smart piece on the pros and cons of converting office buildings into apartments by NY1.

Kastle Charts Show Rising Office Occupancy

I’ve shared these charts on Housing Notes before. Kastle tracks and aggregates security card swipes in the 2,600 U.S. buildings they have systems installed. I presented the first chart to my Columbia grad class this week and several observations were shared with me including:

The pre-covid numbers weren’t much higher than 60% and the U.S. sample size is relatively small.

To both points, I’d suggest this – during the pandemic there was not a sense of how much offices in commercial towers were being used. This data series, a brilliant marketing tool for Kastle, is just about the only source on the topic that is out there. So its fine to use as long as its messaging is not over-weighted for its importance.

For Those You Not Familiar With How Steep The Upward Trajectory Of U.S. Housing Prices Are…

The following WSJ chart look like a sustainable trend? Of course not. The jump in mortgage rates should be welcomed since lower rates in this cycle have essentially made housing less affordable!

So of course, sales are beginning to fall…

Incidentally, I love this explainer piece on GRID: What is happening with the housing market? Why big interest rate hikes are scrambling an already strange real estate landscape.

The NY Post Is Having Fun Illustrating The Surge In Rental Prices

Gotta love the comparison made by the New York Post in this: What $5,000 rent in NYC gets you now vs. last year — the difference is shocking

VIDEO: 2022 NAR Report On International Buyers

NAR just published their 2022 International Transactions in U.S. Residential Real Estate report.

While surveys as a rule are a big drop in reliability from actual transaction data, its just about all there is available on the topic.

Here’s an interview I did this week with a Chinese-American television outlet on the topic. They dug up clips of me teaching real estate at Columbia! Gotta love the extra step.

Bloomberg has a good break out of the patterns:

VIDEO More Housing Market Pivot Talk (Bay Area v. NYC)

Here is the second interview I did with NTD this week.

The Housing Shortage Explained: Its No Longer Exclusive To The Coasts

There is a terrific piece in The New York Times’ Upshot section: The Housing Shortage Isn’t Just a Coastal Crisis Anymore:

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.)

TAF Is Making Appraisers Pay To Be Misleading And Exposed To Legal Jeopardy

From the organization that brought you the bat-shit crazy letter and the chickenshit letter, they are charging for classes that are misleading.

ASC just sent a letter to state appraiser regulatory officials pointing out that the USPAP update course is factually inaccurate and puts appraisers in legal jeopardy if they follow it.

Letter From Jim Park, Director ASC to State Appraiser Regulatory Officials: 2022-2023 7-Hour National USPAP Update Course

The letter references findings and recommendations found in the already presented report 6 months ago: Identifying Bias and Barriers, Promoting Equity: An Analysis of the USPAP Standards and Appraiser Qualifications Criteria

This is the meat & potatoes of the July 8, 2022 ASC letter:

The new fair housing module contained in the 7-hour continuing education course reflects welcome effort, but fails to provide accurate and effective guidance to appraisers. The module provides an inaccurate summary of fair housing law, while failing to include any content from the applicable statutes themselves (namely, the federal Fair Housing Act) or its implementing regulations. It also fails to provide specific guidance and examples of what is prohibited by law. This outcome is consistent with views expressed in interviews conducted with members of national appraisal organizations. They observed that The Appraisal Foundation has not produced accurate and effective guidance with respect to fair housing issues (and other topics of a legal nature, such as privacy laws).

ASC is essentially telling the 55 states and territories they don’t need to enforce this aspect of USPAP because the TAF course is inaccurate. In fact, the NFHA report that came out last January 2022 goes into specifics on why TAF’s effort is misleading. Yet TAF hasn’t pulled the USPAP class because it is their cash cow.

Why do we need a USPAP update class at all in this cycle? Key word here is “update” since we are in the third year of the two year renewal cycle “extended because of COVID” (lol), and we are still required to take the update class.

Let me summarize the situation for you:

– There have been no changes to USPAP in more than two years yet they have no problem charging appraisers to take an “Update” class to maintain certification. This is the definition of both a money grab and busy work, both of which come out of the appraiser’s pocket and takes away from time they could be making a living.

– The fair housing module to the class is factually innaccurate and can place an appraiser in legal jeopardy as a result.

Beyond that, TAF’s focus of the update class really is:

“How do I not get accused of bias?”

…rather than giving appraisers the tools they need to understand things like the difference between implicit and explicit bias.

Echoes of misleading

Does this situation sound familiar? It should. Remember when I called out TAF more than a year ago for their reckless use of the term “misleading,” because they doubled down by saying either “unintentional” or “intentional” misleading statements could place your license in jeopardy. They placed the appraiser on the hook in reference to the term “misleading” and are too lazy to take it out immediately until it is fixed or never put back in. How hard is that to do? How many minutes would it take to do their actual job on fixing the “misleading definition?” My wild guess would be 5-10 minutes.

As always, this addition to USPAP was done without legal review which is one of the core problems of the USPAP process. TAF has now brought in a law firm, but my goodness, this has been going on for more than three decades and the interpretation of “misleading” is still on the books?

For a small staff, this is an incredibly bloated institution.

Sham Petition Process Part, Year 3 [SPP3] Is Gearing Up For An August Showdown

Jim Amorin, the driver of all these creative machinations to keep his job, has come up with a doozy this year. (I continue to marvel out how his actions have not brought in law enforcement for the “taking” of an organization).

Jim Amorin and his FOJs came up with a whopper this year: AI Board to Consider 5 Candidates for 2023 Vice President in August

This year Paula Konikoff was submitted as a candidate by the National Nominating Committee, which represents a choice from the membership – although I get the impression that the NNC has been subjected to backroom glad-handing over the past year. What’s different this year is the vetted candidate is not being left twisting in the wind with reputational damage while Amorin desperately tries to maneuver around the process to save his skin.

However, this year, the gloves are off, and the sham petition process is no longer in hiding. There are now four more candidates being added to the list. I don’t really know which team each of these nominees is on yet, but it is clear that the fairness of the process has been destroyed and politicized to keep the CEO in his wildly overpaid position as well as the lackies that hang on his coattails for treats.

Things are a little different this year – the NNC candidate sounds like someone with a tremendous amount of appraisal skills, but someone with ZERO leadership and people skills per someone with first-hand experiences – and their first-hand experience was a doozy. I understand there are several other similar-themed letters, but I haven’t seen them yet. Here’s a redacted letter submitted to AI:

The bottom line here is AI is a hot mess.

OFT (One Final Thought)

When I learned that Rage Against The Machine had a new album out, I went down the rabbit hole, and then needed to come down from that intensive anger rock high to something smooth and relaxing. Pink Panther was it. Half of the fun of this video was watching the musicians stand up and sit down for their solos!

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 read more signage;
– You’ll be more aware of signage;
– And I’ll try to soften my rage against the machine.

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