The Roaring Twenties For Housing

June 4, 2021

I’ve been commuting to my Manhattan office two days a week and it feels like…

But I digress…

Manhattan Contract Volume Remain Heavy As Rental Price Continue To Fall

I’ve been the author of the expanding Elliman Report series since 1994 for real estate firm Douglas Elliman. They published our monthly research this week covering four U.S. regions.

Bloomberg covered the story and, most importantly, provided a chart.

The basic message here is that new inventory is rising because the metric has pivoted to seasonality. The growth in listings has been unable to keep up with the growth in new signed contracts. Check out this chart from Q1-2021 closed sales – look at the crazy 2020 pattern.

Here are some additional charts for the four reports that we plan to update each month:

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New York New Signed Contracts Report

– The New York report attached covers Manhattan, Brooklyn, Long Island, Hamptons, North Fork, Westchester County, Fairfield County, and Greenwich, CT.

– Elliman Report: New York New Signed Contracts 5-2021

Manhattan
New signed contracts for all three property types combined expanded significantly from last year’s same period for the sixth consecutive month. The significant annual jump reflected the lockdown during the same period last year. New inventory rose year over year for the past three months as the market reverts to traditional seasonal patterns.

Brooklyn
New signed contracts for all three property types combined rose from last year’s same period every month since last July. The significant annual jump reflected the lockdown during the same period last year. New inventory rose year over year since last June but could not keep up with new signed contract growth.

Long Island (excluding H/NF)
New signed contracts had not seen an annual decline since June of last year. New inventory has expanded year over year for the third consecutive month. Greater new signed contract growth for single families and condos was generally skewed to higher-price tranches.

Hamptons
New signed contracts pressed higher each month than the prior-year since at least June of last year. New inventory rose annually for the third straight month after two months of declines. Greater new signed contract growth was skewed towards higher price tranches.

North Fork
New signed contracts rose annually for the past four months, while new inventory increased annually for the third straight month after three months of declines. Greater new signed contract growth was skewed towards higher price tranches.

Westchester
New signed contracts rose significantly higher each month than the prior-year since at least July of last year. New inventory declined annually for the fourth time in the past five months. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Fairfield
New inventory fell sharply year over year for the seventh time in eight months. The severe lack of supply allowed new signed contracts to rise only twice annually in the new year. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Greenwich
New signed contracts surged year over year each month since at least last July. New inventory fell annually for the first time in three months.

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Florida New Signed Contracts Report

– The Florida report includes the counties of Miami-Dade, Broward, Palm Beach, Pinellas, and Hillsborough.

– Elliman Report: Florida New Signed Contracts 5-2021

Palm Beach County
New signed contracts pressed higher each month than the prior-year since at least March of last year. New inventory rose annually for the second straight month after six months of declines. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Broward County
New signed contracts pressed higher each month than the prior-year since at least March of last year. New inventory rose annually for the second straight month after six months of declines. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Miami-Dade County
New signed contracts slipped annually for the past two months as compared to the prior year. New inventory has declined year over year nearly every month since at least May of last year. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Pinellas County
New signed contracts pressed higher each month as compared to the prior year since the start of 2021. New inventory has fallen year over year for the past seven months. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Hillsborough County
New signed contracts pressed higher each month than the prior-year since at least March of last year. New inventory has fallen year over year since the beginning of the new year. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

______________________________________________________
Colorado New Signed Contracts Report

– The Colorado report covers Aspen and Snowmass Village.

– Elliman Report: Colorado New Signed Contracts 5-2021

Aspen
New signed contracts nearly doubled year over year and have shown significant gains each month since last summer. New inventory fell year over year for the first time in 2021. Condo new signed contracts showed a larger gain than single families.

Snowmass Village
New signed contracts quadrupled year over year and have been showing significant gains each month since last summer. New inventory fell year over year for the first time in 2021. Condo new signed contracts showed a larger gain than single families.

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California New Signed Contracts Report

– The California report contains the counties of Los Angeles, Orange, and San Diego.

– Elliman Report: California New Signed Contracts 5-2021

Los Angeles County
New signed contracts more than doubled year over year by the highest rate in at least fourteen months. New inventory has fallen annually by a significant rate in each of the past seven months. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

Orange County
New signed contracts rose sharply year over year each month since January. New inventory has fallen year over year each month since the spring of last year. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

San Diego County
New signed contracts pressed higher each month as compared to the prior year since the start of 2021. New inventory has fallen year over year each month since last spring. Greater new signed contract growth for both single families and condos was skewed to the higher price tranches.

[Knight Frank Interview] Are we on the cusp of a Roaring Twenties for London and New York’s prime markets?

The short answer: yes. Here’s my fun discussion with Anna Ward and Kate Everett Allen of Knight Frank.

Relevance International Promo for my interview: “If you’re not working in New York, you’re just camping out.”

The full interview will be posted next week, but here’s a brief clip.

Like Parking Lots, Remove Highways That Cut Through Residential City Neighborhoods

When I first moved to Manhattan in 1985, the first book I read was The Power Broker: Robert Moses and the Fall of New York Paperback. Moses ruled in absolute terms. At a community planning meeting to discuss the construction of the Cross Bronx Expressway which arbitrarily cut through neighborhoods said (paraphrased) “To make an omelet, you have to crack a few eggs.” He got bridges and tunnels built and traffic arteries developed like no one else could but he was car-centric in all his planning and destroyed many vibrant neighborhoods in New York City.

Like the legacy of too much parking in urban centers, the argument is being made for the reduction in large highways, often planned through neighborhoods offering the least resistance. This visualization piece by the New York Times is amazing: Can Removing Highways Fix America’s Cities?


[clink on NYT image for story]

[Howmuch.net] Top 10 U.S. Cities by Fastest Growing and Declining Rent Prices

Our reports showed Manhattan net effective median rents were down -21.2% YOY in April but I’ll assume they are lumping all five boroughs together.


[click to open post]

Getting Graphic

My favorite charts of the week of our own making

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.)

The Appraisal Foundation’s “Unbearable Whiteness of Being” Has Awakened The ASC Tiger

With the near total lack of diversity in the leadership across the Appraisal Foundation, and unprofessional actions in the past year such as the bat-shit crazy letter, the knee-jerk temporary expansion of USPAP for one year without advanced notice to all the stakeholders based on “COVID”, the dishonest effort to mislead Congresswoman Waters to initiate an audit of everyone in the appraisal regulatory process EXCEPT the Appraisal Foundation itself, which is the actual player in the sandbox that needs scrutiny may have been the cause of this:


[click image for web page]

Wow. This is the part that stands out:

The goal of the review is to ensure that USPAP and the AQB Criteria do not encourage or systematize bias, and consistently support or promote fairness, equity, objectivity and diversity in both appraisals and the training and credentialing of appraisers.

That’s going to be very awkward for TAF to explain how:

– there is nearly zero diversity on their technical boards for the past thirty years
– they cultivated the appraisal profession to be dead last in the diversity of 400 occupations tracked by BLS with 96.5% of appraisers being white
– the head of the diversity committee is a middle-aged white guy
– the Ethics Rule is poorly written, seemingly giving appraisers leeway to use race data to make adjustments
– AO16 was written

The Appraisal Foundation’s Diversity Survey Isn’t Credible But Is Laughable

TAF’s Diversity Survey touts its high participation rate of 4,714 (7.4%) of the 64,000 email survey who actually completed the survey. As someone who works with data for a living (I’m an appraiser, after all), look at the following chart. Does something in it jump out at you?

Step back and absorb this logic:

According to the survey, 77.6% of appraisers who answered the question: “With which racial and ethnic groups do you identify?” identified as white.

So an institution that, according to federal government, has the least diversity of the 400 occupations they track, sends an opinion survey to appraisers who are predominantly white to ask them questions about diversity?

This is not a credible approach for research. Anyone with any experience with data knows that survey data is incredibly unreliable and the lowest form of information.

My goodness.

Appraisers Who Think They Are Fighting The Good Fight Have Missed The Point

To my appraiser friends and colleagues who have written heart-felt screeds about how appraisers are observers of the market and not creators of value as well as the stunning lack of understanding of what our appraisal profession actually does in that Brookings Institute study of a few years ago, you are absolutely missing the broader point here and it’s serious – as serious as it gets.

Our industry has no diversity. That’s a fact and leadership in our profession such as TAF had no clue until the past year when many of us took them to task for it. They still don’t get it based on their recent actions.

When you say things like, there is no proof that appraisers are racist, you don’t have a leg to stand on because organizations like TAF exist, organizations that are willfully blind to reality, no matter how much you believe what you are saying. Take a break from talking about it from the appraisers’ on-the-ground perspective and think of it from the perspective of the public and users of our services.

Our role involves public trust. Over 30 years of systemic, identifiable, and un-addressed bias and racism sweeps us from the realm of public trust. The public has no trust in us and it’s only now that the massive institutions that hold our future in their hands are waking up to it. We are on the wrong side of history, and our unchallenged leadership has placed and kept us there.

For the past 30+ years, the institution responsible for our standards and entrance into the profession has been dominated by middle-aged white guys (like me).

From the public trust perspective, the very basis of our profession, this is classic systemic racism defined. It’s not a statement about you individually, it’s about the system we came through. That’s what needs to be corrected.

And those news stories about discrimination in valuation won’t stop coming because they are like shooting fish in a barrel. That’s because as an industry, we can’t defend what is nearly a whites-only – and dominantly male – environment. We need to fix TAF now unless you want to be reading “appraisers are racists” stories forever and see our profession marginalized further, even eliminated.

OFT (One Final Thought)

I love the playful joy being shared here in both of these clips (the bottom one is NSFW).

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 roaring;
– You’ll be screaming;
– And I’ll be howling.

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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