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.
AT&T’s Bellboy pager at the Seattle World's Fair, 1962. pic.twitter.com/P86fQLQUfC
— Humanoid History (@HumanoidHistory) July 9, 2021
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
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
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
QUEENS RENTAL MARKET HIGHLIGHTS
– 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.
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.
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”
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.
Lots of happenings in Residential Real Estate. But be careful not to get caught up focusing on the wrong things — no, it's not about inflation or NIMBY or PE rentals.
The big issues are technology, ultra-low rates, capital, and changing demographics.
A quick thread
— Barry Ritholtz (@ritholtz) July 8, 2021
My favorite charts of the week made by others
Len Kiefer‘s Chart Handiwork
(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
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- Justice Department Withdraws from Settlement with the National Association of Realtors [Justice Department]
- It's a House Seller's Market [The Irrelevant Investor]
- Montreal Real Estate Market: Soaring Prices Weaken Sales in the Suburbs [Yahoo Finance]
- Constructing the Perfect Villain: The Bad Contractor [NY Times]
- Half of U.S. Hospitality Workers Won’t Return in Job Crunch [Bloomberg]
- U.S. Mortgage Rates Slide to Lowest Since February at 2.9% [Bloomberg]
- Department of Justice Withdrawal from Settlement with the National Association of Realtors Is Good News for Consumers [Consumer Federation of America]
- Private island sells for $85 million in Palm Beach, buyer says [Palm Beach Daily News]
- The Downtown Office District Was Vulnerable. Even Before Covid. [NY Times]
- Are Private Equity Firms to Blame For Rising Home Prices? [Marker]
- Who's Driving Up Home Prices? [The Irrelevant Investor]
- What the condo collapse means for agents, sellers and buyers in South Florida [South Florida Agent Magazine]
- Everything You Need to Know About the Great Lumber Crisis of 2021 [Vice]
- Millennials’ Real Estate FOMO Goes Haywire [Bloomberg]
- Vacation home sales soared during pandemic, report finds [Washington Post]
- Inside Austin’s Wild Real-Estate Market [Curbed]
- Officials call for stricter high-rise building inspections [Newsday]
- Real Estate Shows Tech Is No Holy Grail [Wall Street Journal]
- Pending home sales crush hopes of forbearance crash bros [HousingWire]
- Trump wanted to chop up and sell off Mar-a-Lago's grounds in the '90s. This is how preservationists and officials stopped him. [Business Insider]
- Rent Catches Up to Pre-Pandemic Estimates, Except in Big Cities [Bloomberg]
- Condos Are in Uncharted Territory [Slate]
- Manhattan Listings That Have Lingered [NY Times]
- Older Americans Stockpiled a Record $35 Trillion. The Time Has Come to Give It Away. [Wall Street Journal]
My New Content, Research and Mentions
- Manhattan's apartment glut eases as renters race to sign leases [Business Times]
- NYC Renters Sign Record Numbers of Leases, But Rents Still Down [Commercial Observer]
- Renters return to the Big Apple, number of open units drops almost 40% [Daily Mail]
- As renters return to Manhattan, landlords pull back on the freebies [Brick Underground]
- Robust markets continue for Westchester and HV real estate sales [Westfair Online]
- Home Prices in Brooklyn and Queens Hit Record Highs [The Real Deal]
- Manhattan real estate is back [Business Insider]
- Manhattan saw more new lease signings last month than ever before, even as rent prices begin to rebound to pre-pandemic levels [Yahoo News]
- Manhattan investment properties see uptick in pricing [Real Estate Weekly]
- Manhattan saw more new lease signings last month than ever before, even as rent prices begin to rebound to pre-pandemic levels [Business Insider]
- Brooklyn's record prices lure sellers back to the market [Brick Underground]
- “People Get Upset”: A Mass Labor Shortage Is Leaving Hamptonites to Fend for Themselves [Vanity Fair]
- Brooklyn Real Estate Market Continues Its Post-COVID Rebound in Second Quarter of 2021 [Brownstoner]
- City rents keep rising but it's not 2019 again yet [Crain's New York]
- Competition for Rentals Heats Up in Manhattan, Brooklyn, Queens [The Real Deal]
- New York City Luxury Rentals See a Rush of New Lease Signings, and Price Increases May Not Be Far Behind [Mansion Global]
- Manhattan’s Apartment Glut Eases as Renters Race to Sign Leases [Bloomberg]
- Greenwich Lures NYC Firms Seeking Offices After Remote-Work Boom [Bloomberg]
- Former Goldman partner lists Manhattan townhouse for $80M [Crain's NY]
- Former Goldman partner lists Manhattan mansion at $106m [Financial Review]
- Beach towns along the East Coast are struggling to hire enough employees heading into the July Fourth weekend [Business Insider]
- NYC apartment buyers emerge from 'coma' to drive record sales [Business Times]
- Manhattan real estate prices hit $999,0000 an all-time high since before pandemic [News Chant USA]
- Nearly 19% of office buildings in NYC are vacant as city faces crisis [Daily Mail]
Recently Published Elliman Market Reports
- Elliman Report: Riverdale Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Brooklyn Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Queens Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Northwest Queens Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Westchester Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Putnam & Dutchess Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 6-2021 [Miller Samuel]
- Elliman Report: Manhattan Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Northern Manhattan Sales 2Q 2021 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 6-2021 [Miller Samuel]
- Elliman Report: California New Signed Contracts 6-2021 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 6-2021 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 6-2021 [Miller Samuel]
Surfside Condo Collapse
- Condo buyers shun older buildings after Surfside collapse [Sun Sentinel]
- ‘Should We Sell?’ After Collapse, Hot Florida Market Faces Uncertainty [NY Times]
Appraisal Related Reads
- Broken Ankle & Kitchen Remodel… Life Happens [Cleveland Appraisal Blog]
- Time Adjustment Methods… How Do You Time Adjust? [Appraisers Blogs]
- A Look at New Construction Trends in the Birmingham Market [Tom Horn/Birmingham Appraisal Blog]
- From Materiality to Risk Mitigation: ESG at A Tipping Point for Real Estate [Counselors of Real Estate]
- Appraisal Subcommittee (ASC) Awards $1 Million to Council on Licensure, Enforcement and Regulation (CLEAR) for Training and Technical Assistance to Better Serve Real Estate Appraisal Industry [PR Newswire]