Paging The Housing Market

July 9, 2021

A long time ago (25 years?), I was about to appraise a three-family townhouse for a purchase mortgage. I was a block away when my pager went off, but I was right on time for the appointment. I considered waiting to call the office after my inspection so I wouldn’t be late. But since there was a payphone on the corner right in front of me, across the street from the property, and I had a roll of quarters (standard equipment pre-mobile phone), I called my office. I could tell audibly that my employee was relieved I called. She told me to cancel the inspection. The tenant in one of the apartments was a war vet and suffered from PTSD. The broker had been in the process of opening up the house for me and the tenant was startled by the agent and pointed a gun at him. The agent bolted from the house, and then when he got his composure, he called my office to warn me.

I’m drowning in deadlines this week/weekend so today’s and next week’s iterations of Housing Notes will be more brief than the ‘War and Peace’ missives I usually publish.

But I digress…

The Manhattan, Brooklyn & NW Queens Rental Markets Continue To Boom As Tenants Lock-In Longer Leases

I’ve been the author of the Elliman Report Series for Douglas Elliman Real Estate for 27 years and have seen some significant ebbs and flows within various housing markets. However, the heavy leasing volume of 2021 has been nothing but remarkable for a city housing market declared dead forever.

Douglas Elliman published our June 2021 rental report research this week, and Wall Street was quite interested in the results, given the coverage of our article was the 8th most read piece on Thursday by the 350K Bloomberg Terminal subscribers.

And a chart!

Elliman Report: June 2021 Manhattan, Brooklyn & Queens Rentals

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MANHATTAN RENTAL MARKET HIGHLIGHTS

“The number of new lease signings continued to set records as the length of leases expanded.”

– The highest number of new lease signings since tracking began in 2008
– Listing inventory fell by half since January as landlord concessions fell to their lowest level since last August
– The average lease length rose each month since January as tenants lock in discounts
– For the sixth straight month, non-doorman rental fell year over year at a higher rate than doorman rentals
– New development leasing market share was the highest June in eight years
– The lowest price tranches of the market saw the most year over year price weakness
– All price trend indicators at or above the $10 thousand threshold continued to rise annually

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BROOKLYN RENTAL MARKET HIGHLIGHTS

“Third highest new lease signings total on record as rental prices stabilized.”

– The second-highest number of new leases and highest June total on record since 2008
– The lowest amount of concessions paid by landlords since September
– Net effective median rent rose month over month for the third time in four months

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QUEENS RENTAL MARKET HIGHLIGHTS

[Northwest Region] “Record new leasing activity has helped moderate rental price declines.”

– The largest number of new leases signed in June and the third-highest month overall since 2011
– Listing inventory fell by half since January but remains elevated
– Rental price trends continued to remain weakest in smaller apartments

Westchester, Putnam and Dutchess Counties Continue To Boom

The northen suburbs of New York City showed exceptionally robust conditions with heavy sales, price growth and limited supply.

Elliman Report: Q2 2021 Westchester Sales
Elliman Report: Q2 2021 Putnam/Dutchess Sales

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WESTCHESTER SALES MARKET HIGHLIGHTS

“Nearly four out of every ten sales sold above the last listing price.”

– Median sales price rose year over year to the second-highest on record
– The number of sales surged year over year for the third consecutive quarter
– The year over year growth rate of sales above $1 million was double the sales below $1 million
– Largest year over year growth rate for single families in more than a decade
– The number of condo sales more than doubled from the year-ago quarter
– Luxury median and average sales price surged higher to set records
– Luxury listing inventory fell to its lowest level in more than eleven years

______________________________________________________
PUTNAM SALES MARKET HIGHLIGHTS

“All price trend indicators rose to new records as the market pace moved significantly faster.”

– All price trend indicators rose year over year to new records
– The number of sales rose annually for the fourth straight quarter
– Marketing time remained at its lowest level on record in nearly twelve years of tracking

______________________________________________________
DUTCHESS SALES MARKET HIGHLIGHTS

“Median sales price jumped to a new high as months of supply moved at the second-fastest pace on record.”

– Median sales price and average price per square foot reached new records
– Sales surged annually at the highest rate on record for the second straight quarter
– Months of supply fell annually to its second-fastest pace in nearly seven years

Brooklyn, Queens and Riverdale Continue To Flirt With Record Prices

The market pace is brisk werever you go.

Elliman Report: Q2 2021 Brooklyn Sales
Elliman Report: Q2 2021 Queens Sales
Elliman Report: Q2 2021 Riverdale Sales

______________________________________________________
BROOKLYN SALES MARKET HIGHLIGHTS

“Record prices set for the third consecutive quarter pulling more listing inventory onto the market.”

– Median sales price and average sales price reached new records for the third straight quarter
– The number of sales reached their highest level for a second-quarter since 2007
– Listing inventory has been slowly returning, rising above the second quarter decade average

______________________________________________________
QUEENS SALES MARKET HIGHLIGHTS

“Price trend indicators set records as the number of sales more than doubled from the prior year.”

– Median sales price and average sales price rose to their highest levels on record
– The number of sales more than doubled from the prior-year quarter
– Listing inventory expanded year over year for the fourth consecutive quarter

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

“Sales reached their highest total in three years as price trends edged higher.”

– The number of sales nearly tripled, rising year over year for the second consecutive month
– Listing inventory expanded annually for the fourth straight quarter but overpowered by sales gains
– Median sales price rose year over year for the third straight quarter

This Week in Record Prices

A Palm Beach investor property purchase for speculation clocked in at $85 million, and yet it was only the fourth highest sale of the year. Here’s the Shiny Sheet scoop on the closing price and the WSJ scoop when it went to contract earlier this year.

New in the Real Estate Lexicon: “Dungers”

A friend shared this screenshot of The Real Deal magazine‘s Daily Dirt column from a Bloomberg story I read about “Dungers” with the chapter heading “Housing Gets Dung and Dunger”

Dungers. The term for dilapidated, crumbling houses comes from New Zealand, which is in the grip of a striking property boom.

A Ritholtz Rant On What We Get Wrong About Residential Real Estate

Ok, maybe its not quite a rant, but at the very least, a dressing down on all the misinformation being applied to current housing conditions. Follow this entire feed. I’m in there somewhere.

Getting Graphic

My favorite charts of the week made by others

Len Kiefer‘s Chart Handiwork

Appraiserville

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

Feedback About The Hateful 8 And The Sham Petition Process

I was limited on time this week for a full column but here are some key thoughts about last week’s post and what it represents:

– I had several female appraisal colleagues I know and trust reach out and tell me how strong a candidate Sandy is. I get it, but I explained that it’s not the point I’m making. Instead, I’m focusing on the corruption of the process, just enabling FOJs to continue to run the Appraisal Institute into the ground and keep diversity out of AI. The NNC vetted Sandy, yet Steve was selected. For the second year in a row, FOJs initiated the sham petition process, and both NNC picks were not FOJs. Does NNC, in the context of membership selections, have a role or not? Do members count anymore? Why has Jim Amorin scrubbed all regional contact data from the website? Do candidates offered by the membership have a place, or is this just a free form event and, when the CEO feels threatened, offers another candidate that NNC passed over. Why is someone who was NOT selected by NNC suddenly on equal footing with the winner?

– Is anybody wondering why FOJs have tried to hide the sham petition process? It is unconscionable the Appraisal Institute membership has not been notified of the use of the sham petition process again. FOJs didn’t like the NNC candidate because, to the FOJ, transparency is not part of their game plan to keep the self-dealing flowing. Only through the efforts of many individuals is the word getting out about another attempt to use the sham petition process. FOJs have been trying to hide the use of the sham petition process from the membership to keep the groundswell of anger that occurred last year from happening again. Is this the Appraisal Institute you want…clandestine special-ops to deceive the hard-working dues-paying membership in the interest of self-dealing?

– FOJs (Friends of Jim Amorin) have been obstructionists to moving the organization forward. FOJs are essentially resume-builders, not making any effort to submit or offer new ideas and options for new opportunities or solutions to fix the organizations and the industry’s lack of diversity. In exchange for not rocking the boat so the CEO can remain fully in power, FOJs get choice committee assignments, lots of travel perks, and an assorted array of things that do nothing for the membership. The only qualification for an FOJ, even the super-duper or uber kinds, is not to have a conscience.

The membership of the Appraisal Institute needs to speak up before the next board meeting in August, or the organization is essentially done.

The irony of what has happened is that diversity ends up taking a back seat like Jim intended when he dismantled the diversity committee in 2015. Unfortunately to AI, the diversity committee became something he couldn’t control, so it was scuttled and relegated to a panel with no money or power to lead—the panel reports to Jim, not the board.

Next Week I Take A Deep Dive On TAF’s Financial Statements And Other Hypocracies

I ran out of time this week!

OFT (One Final Thought)

I was using a pager back in this throwback photo – the movie is still on my iPhone but the New York Story is much more optimistic.

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 paged;
– You’ll be more mobile;
– And I’ll carry plenty of quarters for those phone calls.

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
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

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