With all the housing analytics out there, sometimes I get the urge to live in a cave (no, not a man-cave) like back in dinosaur times.
Poor Pete. pic.twitter.com/AuV4oSGwvl
— You Had One Job (@_youhadonejob1) March 4, 2019
I have drawn the world’s worst pun pic.twitter.com/hhZxDXaHss
— Nathan W. Pyle (@nathanwpyle) March 2, 2019
But I digress…
Downtown Brooklyn Partnership’s Five-Year Review
Like my ongoing relationship with the Downtown Alliance in Manhattan, I have started to work with the Downtown Brooklyn Partnership on their presentation of market conditions. Partnerships like this are established to promote/market the positive aspects of their particular submarket. DBP just released their five-year review and it is full of granular bits and pieces about the market, and separately, some quick facts. But first some background (from the report):
In the years following the 2004 adoption of the Downtown
Brooklyn Development Plan and an area-wide rezoning of the
Special Downtown Brooklyn District more than 14,000 new
housing units were delivered in Downtown Brooklyn, nearly
two-thirds of which were delivered during the past five years.
The district’s growth has accompanied a boom in Brooklyn and
NYC’s economy, with record employment and population in the
borough and city.
One of the market characteristics of the last five years has been the proliferation of rentals over condos, unlike Manhattan. This and other context is captured in the following chart.
Finally, Connecticut Gets Good Housing News With Nary A “Nutmeg” Reference
This is another great read by Justin Fox at Bloomberg. My only complaint as a “Nutmegger” is that the MTA train image used in the article is more likely of the type of trains that go to Westchester County, New York. But my home state gets some long overdue economic love.
Going by third-quarter state gross domestic product data that were just released, Connecticut’s economy is on track to grow more than 2 percent in 2018! That’s … not much. But it’s better growth than the state has seen in more than a decade…U.S. real GDP grew 19.1 percent over that same period. The only other states that experienced GDP declines were Louisiana (0.2 percent), Mississippi (2.1 percent) and Wyoming (5.5 percent).
GDP is trending higher…
Housing price growth is in check…
Demographics are shifting…
New York City Is Considering What Other Global Cities Already Have
One of the unique positions of New York City to global real estate investors has been the absence of a tax on foreign investors or vacant luxury units. This has been implemented in other cities such as Vancouver and the results to the local housing markets have been somewhat harsh. I bring this up because I believe such a tax will restrain sales transactions which generate significant tax revenue for the city. Combined with Fincen actions and the Tax Cuts and Jobs Act of 2017 that helped crush demand for high end real estate in high tax, high cost cities, NYC is gambling that this new tax to make up for decades of transit system neglect won’t make new development conditions worse.
And for those who think the SALT cap is going away…The SALT Cap Isn’t Going Anywhere, Right and Left Agree.
Knight Frank’s Wealth Report With A Shot of Single Malt Whiskey
Each year the Knight Frank Wealth Report is published, I pour through their wealth visualizations and wonder why I didn’t do more homework in the seventh grade. Apparently, single malt whiskey is the number one non-real estate investment this year, yet I prefer craft beer. Knight Frank is the international affiliate of Douglas Elliman Real Estate, the company for whom I have authored the expanding market report series since 1994.
Here is a Wall Street Journal story on the report results: Can the World’s Wealthiest Absorb the High-End Home Glut?
And here are a couple of favorite visualizations in the Knight Frank Wealth Report.
Another Way To Visualize Climate Change’s Impact on Housing
This art installation is fascinating.
Our favorite charts of the week
This is an oldy but a goodie. I haven’t drawn text bubbles in a while but was talking to someone about this sort of thing and showed this as a sample – I did this 5.5 years ago…
More Len Kiefer Visualizations
but factoring existing home sales, total home sales 2018 fell short of 2017's level pic.twitter.com/v6EtNQgfXM
— Leonard Kiefer (@lenkiefer) March 5, 2019
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
Murder And Death As A Valuation Specialty
There was a fascinating read in Rolling Stone about appraiser Randall Bell and his appraisal specialty.
He doesn’t believe that bulldozing the property removes the stigma. I’d love to know what he thinks about how stigma might change with market conditions. In my own market, tight conditions seem to have negated the impact of tragedies like murder or suicide, or perhaps New Yorkers are simply more jaded. But Bell seems to have seen it all.
A Conversation with Jim Park, ASC Executive Director
Appraiser eLearning hosted an interview with Jim Park, ASC Executive Director. Jim is one of the best friends of the appraisal industry out there because he has an appraisal background and therefore understands what is going on through the same eyes as us.
Here’s the ASC credential chart that shows the national trends:
One personal question for Jim: What’s with the sword hanging over your head in the video? Is this an analogy? Ha. But seriously, good stuff and thanks for sharing your insights with the industry.
OFT (One Final Thought)
Jerry Merryman, one of the inventors of the handheld electronic calculator, has died in Dallas. He was 86 https://t.co/v6NFkosYnl
— Bloomberg (@business) March 5, 2019
Brilliant Idea #1
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Brilliant Idea #2
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See you next week.
Reads, Listens and Visuals I Enjoyed
- I’ll make the bed as soon as I can find it. [Terrible real estate agent photographs]
- The Wealth Report 2019 [Knight Frank]
- Forget the film glamour, US finance workers are set to be squeezed [Financial Times]
- Letting the QM Patch Expire Will Help First-Time Buyers – Mortgage Media
- New York Considers Taxing Non-Resident Owners of Luxury Apartments
- Downtown Brooklyn’s rental worries are a thing of the past [New York Post]
- Connecticut’s Great Depression May Be Over [Bloomberg]
- Fake Estate: Digitally-doctored listing photos are on the rise [The Real Deal]
- Can the World’s Wealthiest Absorb the High-End Home Glut? [The Wall Street Journal]
- Limits on Wall Street Pay Are Back on Regulators’ Agenda [The Wall Street Journal]
- Compass expands in Bay Area; acquires 1,300-agent brokerage [The Real Deal]
- Rent Control Passed in Oregon. Will it Work as a Housing-Crisis Solution Nationwide? [Pacific Standard]
- Penn Station, the Hippodrome, and 10 Other Lost Buildings of New York City [Architectural Digest]
- NYC's Trendy Neighborhood Leaps Into Top Five Richest Zip Codes [Bloomberg]
- New York City Tries Modular Construction for Affordable Homes [The Wall Street Journal]
- Here’s How Many Taxpayers Will Suffer SALT Pain [Barron's]
- SALT Cap Will Leave About 10.9 Million People Feeling Tax Pain [Bloomberg]
- Opinion | The New ‘Dream Home’ Should Be a Condo [The New York Times]
My New Content, Research and Mentions
- Downtown Brooklyn’s Residential Growth, 2019 [Downtown Brooklyn Partnership]
- Will a Fancy Mall Help Sell Hudson Yards’ Pricey Apartments? [Bloomberg]
- Agents Face the Return of The Bold Buyer [The Wall Street Journal]
- Family Offices Hunt for Yield in Second-Tier Property Markets [Market Currents Wealth Management]
- The Celebrity Premium Myth And Why Michael Jackson’s Neverland Ranch Is Finally Priced To Sell [Forbes]
- Montauk, New York, Compound Sells for $18M [Mansion Global]
- What Does $1M Buy In NYC? Not As Much As It Used To [Patch]
- Ariel Property Advisors’ Shimon Shkury Sheds Light On NYC’s Multifamily Market [Commercial Observer]
- Residential market report [The Real Deal]
- HFZ vs. the market [The Real Deal]
- The Boss? You’re Looking at Her: 7 Women in the Building Business [The New York Times]
Appraisal Related Reads
- What IS a USPAP “Violation”? [George Dell]
- Common FHA Violations [Cleveland Appraisal Blog]
- The problem of giving too much weight to previous sales (or not enough) [Sacramento Appraisal Blog]
- 5 Home Improvements That Do Nothing For Your Home Value [Birmingham Appraisal Blog]
- Meet the Real Estate Appraiser of the World’s Most Gruesome Murder Sites [Rolling Stone]
- Smedley Dingledorf Takes the Job for $275…No Quality or Expertise [Jonathan Miller/Appraisers' Blog]
- A Conversation with Jim Park, ASC Executive Director [Appraiser eLearning]
Extra Curricular Reads
- 'Brilliant' man who was an inventor of the calculator dies [AP News]
- In Aspen’s Shadow, Snowmass Builds an Identity of Its Own [The New York Times]
- Proud as a Peacock [The Baffler]
- Fintech firms like SoFi and Robinhood offer “free” stock trading. What’s the catch? [Quartz]
- The allure of financial tricks is fading [Financial Times]
- Note to phone scammers: Don't call the former head of the FBI [Vice]
- Overloading, heavy ice and an open hatch: Coast Guard details what sank the Seattle-based Destination [The Seattle Times]