The Emperor’s New Clothes In Housing Tech

Be careful who you listen to when it comes to the future of the housing market. It’s not the size of the company/organization or capital raise that matters as real estate undergoes disruption (or pseudo disruption), it’s the depth of their understanding of the consumer and anticipating what the consumer doesn’t yet know what they want. Does the emperor actually wear clothes in all the real estate tech stories you’ve been reading about?

Steve Jobs

“Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!'” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”

And then there’s the following video – I remember seeing this in real time. I burst out laughing at the time, marveling at how misguided titans of industry can be.

But I digress…

Market Report Gauntlet: Q2-2019 Elliman Report: Manhattan & Northern Manhattan Sales

My readers of Housing Notes know that I’ve been writing an expanding series of market reports for Douglas Elliman since 1994 and it’s a full-on obsession as are charts and data. So here we go.


Elliman Report Q2-2019 Manhattan Sales

Co-ops & Condos

“First annual rise in sales in seven quarters with buyers motivated to avoid exposure to new tax law.”

– Sales increased year over year for the first time after six quarters of declines
– The most significant rate of annual sales growth occurred from $2 million to $5 million
– Listing inventory rose annually for the seventh consecutive quarter
– Overall price trend indicators moved higher as median sales price set a new record
– Listing inventory for re-sales expanded year over year for the seventh consecutive quarter
– Highest co-op listing inventory total in six years and it exceeded the ten-year quarterly average
– After six straight quarters of annual declines, condo sales rose the most in three years
– The number of luxury sales at or above $10 million rose sharply from year-ago levels
– The first year over year increase in the number of new development sales in nearly two years

Our report results featured on the Bloomberg Terminals home page in “Chart of the Hour”


Elliman Report Q2-2019 Northern Manhattan Sales

“Apartment sales increased while townhouse sales declined.”

Co-ops & Condos

– Median sales price rose year over year for the third time in four quarters
– Listing inventory expanded annually for the fifth straight quarter
– The pace of the market, as measured by months of supply, was faster than the markets to the south
– Studio and 2-bedroom sales gained the most market share from the prior year


– Listing inventory remained unchanged as sales declined
– Price trend indicators showed mixed results
– Shorter marketing time with more negotiability

On The Floor of The NYSE, Not Talking About Stocks

After the publication of the Elliman Report for Q2-2019 Manhattan Sales, I was asked to join Cheddar anchors Kristen Scholer and Tim Stenovec on the floor of the exchange. They were terrific to speak with and I appreciated the invite. I was last there in 2007, interviewed by Erin Burnett when she was at CNBC. Back then I got to sit near the president of the Russian natural gas conglomerate Gazprom and his dozen very large bodyguards. This time was a bit different, thankfully.

Update: I forgot to mention the following little moment in this post when I shared my Erin Burnett/CNBC story today – the security guard at NYSE asked me “when was the last time you visited the NYSE?” and I said, “about 10-12 years ago.” He looked it up to confirm and deadpanned, “I’ll bet you remember that I was the guy that took your picture in 2007, right?!?! He and his colleague and I all had a good hard chuckle over that. Moments like this are what I love so much about my job.

Purplebricks Huffed And Puffed But No Match For Big Bad Wolf

Discount real estate broker “Purplebrickshas withdrawn from the U.S. after losses nearly doubled this year and their stock price fell 75%. They entered the U.S. housing market in 2017.

The Purplebricks web site claims they save their customers an average of 40%. If that claim is actually true and they failed in the U.S. market, then there is clearly something else to this firm’s U.S. collapse.

This story reminds me of Foxtons YHD back in 2007. Technology firms proliferate in boom markets and many become challenged in their first down market.

Here is what I had to say back then (shout out to @johnwake for reminding me!):

From my Matrix Blog in 2007 as the housing market was beginning to stall – Foxtons: Cutting Commissions = Watching MTV

National Housing Stats Still Look Good

From Black Knight (worst corporate name ever) via Basis Point

Pipelines & Weathervanes: New Development Deliveries Define Market Outlooks

Mansion Global does a good job showing the future incoming new development supply for Manhattan (using our data) and Miami.

The Manor: This Week in Aspirational Pricing

Let’s recap:

$85 million – cash purchase in 2011 – was in good condition but was upgraded for $20M subsequent to sale towards more a contemporary style.

$200 million – Original list price
$160 million – Last list price (20% price cut)

$119.75 million – Sales Price (price cut: 40% from original, 25.2% from last list)

With $105 million invested (cash purchase + renos), the seller made 1.76% per year on the sale. For the excessive risk, this seems like a terrible financial strategy all around.

Cheddar: How Property Taxes Are Calculated On Billionaire’s Row

Since Cheddar came up earlier here, I thought I’d share this clip:

Getting Graphic

Our favorite charts of the week of our own making

Notice our chart redesign? We finally packed up our Crayolas…


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

Location Update: ASC Special Meeting – North Dakota Temporary Waiver Request
Thursday, June 13, 2019

UPDATE I just learned of this meeting update after sending out my Housing Notes:

The ASC will hold a Special Meeting on Tuesday, July 9th at 10:00 a.m. to consider the Temporary Waiver Request submitted by North Dakota. The Meeting will be held at 1100 New York Ave NW, Suite 200 East, Room: 2 A/B (Partnership for Public Service). If you plan to attend this Meeting, please send a request to

If any of you can attend this meeting, please do! It is critical that the appraisal industry shows its strength in numbers – this proposal by North Dakota is a travesty for its damage to the public trust, the attack against the consumer, and fraudulent premise.

AVMs Are Not Understood By A Large Swath of Non-Appraisers

Here is a NAR deck on AVMs (automated valuation models).

Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home.

So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.

OFT (One Final Thought)

All three videos are fake, but which one scares the heck out of you?



Brilliant Idea #1

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Brilliant Idea #2

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Jonathan J. Miller, CRP, CRE, Member of RAC
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog

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