Housing Is Running On Empty

I’m not a huge Jackson Browne fan, but this post ran circles around me.

Did you miss last week’s Housing Notes? May 19 – The Rental Housing Market Is The New Combat Juggling

But I digress…

New Home Sales Growth Is Throttling Existing Home Sale Growth As Existing Supply Restrains Them

Its not just higher mortgage rates…

Very different trajectories, but remember that existing sales are a much larger data set. There were 4.28 million annualized sales, down 23.2% from last month, but there were 683,000 new sales in April or about 14%. Historically, the relationship between new and existing tends to be 10% to 20% of all sales.

On Matrix: Three Hours On C-SPAN Yields One Granddaughter

On Friday morning, I was one of five expert witnesses (and the only as an appraiser) to testify on the topic of appraisal bias in front of the Appraisal Subcommittee (ASC). The witnesses waited together in the green room, plus additional TAF staff. We had a delightful conversation – everyone was very friendly and a pleasure to be with, given the adversarial nature of our looming testimony.

I’ve spoken many hundreds of times on national television but never on C-SPAN, so participating in this event was a bucket list check-off for me. The FHFA auditorium and facilities were impressive – the organization of the event was first class and ran very smoothly (way to go, Julie!).

During the first hour of testimony, our fourth grandchild was born. My wife was in the audience and stepped out of the hearing (the nerve!) to take the call from my oldest son on the news of our new granddaughter.

The Appraisal Subcommittee (ASC) held a second hearing on challenges facing the appraisal industry, including barriers to entering the profession and racial bias in home appraisals. The panel’s first hearing on such topics occurred in January. The ASC is an interagency committee under the Federal Financial Institutions Examination Council and oversees real estate appraisal regulations. The Federal Housing Finance Agency hosted the event at its headquarters in Washington, DC.

It’s a three-hour hearing, but if you are connected to the appraisal industry in any way, I encourage you to listen. You can hear my opening statement at about the 26-minute mark. The text on the C-SPAN website was generated from unedited closed captions. Here was my formal statement, but since the timing was strictly limited to 5 minutes, I read this abbreviated version, which in hindsight, was better and more to the point.


Three regulators from the ASC came to me from the stage immediately afterward and said I was the best dressed in the room, and they loved my tie. I wasn’t expecting that. Ha. All were very nice. My wife and I immediately shared pictures of our new granddaughter.


Morgan Williams, General Counsel, National Fair Housing Alliance – He was a compelling witness – he drove home that he wanted access to anonymized loan-level data to determine the potential valuation bias.

Angela G. Jemmott, Bureau Chief, California Bureau of Real Estate Appraisers, Member of the Association of Appraiser Regulatory Officials. She was a powerhouse of testimony, advocating practicum solutions in addition to PAREA.

Michelle Czekalski Bradley, Certified General Appraiser, Chair of the Appraisal Standards Board (ASB) of TAF, was earnest and toed the Dave Bunton narrative. When the CFPB head went after her for the conflict of interest of her position, she named me by name (an unforced error) and said there was no conflict. She may believe that with all her heart, but most of her peers in the industry think otherwise. Her husband is a senior official at McKissock, the largest provider of online appraisal courses, and they have a financial arrangement with TAF on USPAP courses – and Michelle heads the board that makes changes to USPAP. This is another example of the stunning lack of oversight for this not-for-profit (TAF) that modifies USPAP that becomes embedded into laws in the 50 states and five territories. I’m sure she means well and, in her mind, is giving back to the industry, but she is remarkably oblivious to the optics of her position. I believe Dave Bunton hand-selected her for her ability to follow orders. TAF is a monarchy, nothing less.

Brad Swinney, Chief Appraiser, Farm Credit Bank of Texas, Chair of the Appraiser Qualifications Board (AQB), had a hard time presenting and defending PAREA. He, like Michelle, was hand selected by Dave Bunton after the prior AQB chair was removed immediately because he wanted to explore the stunning lack of diversity in the appraisal profession. (We’re 98% white and dead last (400 of 400) as tracked by the BLS). So it follows that if the prior chair was removed immediately after trying to dig into the appraisal industry’s lack of diversity, then it’s just a hop, skip, and jump to assume that Brad was brought in to follow Dave Bunton’s position of staying away from the topic. Brad mentioned several times that “someone” (me) was saying 1,500 hours of experience were required, yet he stated only 1,000 hours were required for residential certification experience. As the AQB chair, he was uninformed. I was referring to the New York State requirement for 1,500 hours as a New York City appraiser, as noted on the New York State website.

I’m glad we’ve cleared that up.

TAF’s representatives (Michelle & Brad) were under siege by the ASC board and did not do well under fire. They found themselves wiggling to defend the indefensible even though they were hand-picked by Dave Bunton for their ability to toe the party line. Both tried hard to frame themselves in a silo – Michelle when it came to how board members were selected and Brad – how they had no responsibility for how much PAREA would cost appraisers. To be clear, TAF had always pushed back hard on PAREA until Dave realized that it could be used to divert attention from, and possibly have a positive influence, on our industry’s stunning lack of diversity.

When I was highly critical of the two-year cycle in my testimony and how TAF goes back and forth on rules that confuse everyone, Michelle brought up the current four-year run of USPAP without changes and how on January 1st, there will not be an expiration date. The problem with framing it that way was that TAF claimed USPAP was frozen for four years because of COVID. Dave saw the pressure coming for change and used COVID as an excuse, yet the reality was that Zoom became ubiquitous, and there was no reason to stop the cycle other than to use COVID to save face. Dave recently realized that because states required USPAP 7-hour update courses every two years, they were still going to benefit from a revenue flow from the classes and could still avoid grant money from the ASC so they wouldn’t have any “strings” attached to their actions. Dave can still fly all over the world on boondoggles to valuation conferences, dining on steak and fine wine without scrutiny. I brought up in my testimony that only about 15 minutes of each 7-hour update class contained new information.

To be clear, only one person of color has been on a technical board (ASB + AQB) in the 3+ decade history of The Appraisal Foundation, which has been led by the same person the entire time. And that one person, despite being highly qualified, was only accepted on the board because of significant outside pressure from myself and a handful of others. Proof of this is that no more persons of color were invited to any of their boards in the ensuing three years.

For many TAF board members, this is just a resume builder. They won’t do anything to forward progress in the industry because Dave Bunton and his sycophants will work hard to prevent it like they just did on the previous AQB chair. But some people will work as insiders to make a difference as long as Dave and Kelly don’t know who they are.

This TAF “byzantine and weird” corporate bureaucracy is an unfair burden to everyday working appraisers and is destroying the public trust. I hope last Friday’s testimony helped confirm a few reasons why there is no diversity in the industry, and it will enable the ASC to push for accountability and change at TAF. Incidentally, Dave was in London a couple of weeks ago on “business.” Yep, TAF needs actual oversight. Currently, they have none.

New York City Price Trends For All Five Boroughs

In the aftermath of each quarterly borough report release in New York City, I combined them to create a New York City-wide snapshot.

Jay-Z and Beyonce Purchase: $200 Million Is The New $100 Million

A media outlet reached out to me just before the story broke to ask if I knew anything about the rumored $200 million. I didn’t know about the sale, but I did know what the sale represented. This year, $200 million is the new $100 million.

This has been a lackluster sales year for super lux, but despite the lower number of sales, the average price per transaction is off the charts. I’ve been closely tracking the US $50 million-plus market since 2014 and have historically closed residential sales since 2000, plus a bunch of giant ranch sales.

This year’s average super lux average price is more than double the norm.

And sales are down…

More Thoughts On The New LA Transfer Tax

From the WSJ back on March 31st:

A new Los Angeles mansion tax, to be enacted April 1, will require sellers to pay 4% on sales of homes priced between $5 million and $10 million and 5.5% on sales of properties at $10 million or above.

Yet it is essential to note that sales were unusually high in February and early March as people rushed to close before April 1. Those sales were primarily “poached from the future,” so the idea that a 4% tax collapse on the $5 million+ housing market seems ludicrous long term.

Two sales in April were above the threshold, showing that the super luxury market has been snuffed out. It looks that way initially, but the long-term impact likely won’t be so dramatic. Sellers will have to capitulate to the reality of the new value structure, and buyers will wait because these properties are optional purchases.

I always marvel at how municipalities do the math on these changes in tax policy – they always assume that human behavior won’t change. The reality is that changes in tax policy always impact human behavior. In this case, sellers will take a while to adjust to the new math.

Looking At U.S. Household Types – All 4,708 Of Them

In the housing silo, we talk a lot about housing types. What about household types? Flowing Data used the Census American Survey to break it out and its quite fascinating.

[click on image]

Bob Knakal, NYC CRE Legend, Gives Us A Shoutout

Nearly twenty years ago, our commercial firm Miller Cicero (now part of Miller Samuel), leverage our expertise to create a market report for Massey Knakal. We ended up creating a “premium” analysis for their publication and while the results were accurate, we got a lot of blowback from their commercial competitors and decided we won’t ever do that again – straying from a perceived “neutral” position.

Here is Bob’s “throwback thursday” post. Follow the thread.

Getting Graphic

My favorite housing market/economic charts of the week made by others

Apollo’s Torsten Slok‘s amazingly clear charts.

Kastle card swipe data charts

Remember that Kastle charts are overstating occupancy* because their pre-pandemic occupancy benchmark was 100% which is simply incorrect (*measures card swipe activity as a proxy for occupancy).

Len Kiefer‘s chart handiwork

My favorite random charts of the week made by others


Three Hours On C-SPAN Yields One Granddaughter

If you are one those heathens that skipped the Housing Notes above and came straight here to Appraiserville, , please scroll up to see the recap of my C-SPAN testimony at the recent ASC Appraisal Bias Hearing up near the top of these housing notes…

Last Week’s ASC Hearing Postscript; Where’s Dave?

I was glad I was able to communicate several points from the appraiser’s perspective that hasn’t come out in the appraisal bias dialog to date – the cost and time that appraisers incur while seeking compliance to a byzantine, weird, and unsupported bureaucratic largess from TAF. To be clear, many of the requirements from TAF that appraisers are subjected to in their daily lives are based on NOTHING. No known research would support 1,000 experience hours or 28 hours of continuing ed. A handful of TAF committee members sit in a back room, making it all up to make appraisers sound like rocket scientists. I got a taste of this for several years sitting in TAFAC and IAC meetings. It’s generally the same handful of people that seem to write all of these requirements.

This just in… appraisers are not rocket scientists.

I can only imagine how intense Dave’s anger/irritation was during Friday’s testimony since it essentially undermined the unsupported and random requirements that TAF subjects appraisers to every two years – are based on nothing – this pattern has been going on since the late 1980s when TAF was born.

One thing I noticed from last Friday’s interaction with TAF witnesses is that they are friendly people who seem confused about the scrutiny the organization is subjected to. It has created a kind of camaraderie within TAF that is united against the overwhelming outside pressures they are experiencing. Holding on to the status quo is the goal, as shown by their actions, placing our industry dead last (400 of 400 by the BLS) by perpetuating the two-year mentoring system.

Some of you may wonder where Dave was during this critical ASC hearing last Friday, as their hand-selected representatives on ASB and AQB withered under the scrutiny of the ASC. How could the TAF chairs be expected to answer questions clearly without reasonable answers? Stumbling on PAREA from lack of preparedness and misrepresenting who and why ASC was banned from attending TAF meetings after decades of doing so stood out as particularly egregious.

Dave was vacationing in Cape Coral, Florida, at a resort, overseeing a group of people interviewing potential new members to the BOT while presumably dining on good food at poolside. These regular offsite meetings are kept quiet because they look bad under scrutiny. Without any oversight, TAF is a good gig if you are willing to be part of the Bunton monarchy. Granted, some TAF BOT members think they can influence from within and may be somewhat effective, but for the most part, probably not. This was evidenced by the quick removal of the past AQB chair, who attempted to look into TAF’s complete lack of diversity. Last Friday’s ASC hearing in DC was much more critical to the future of TAF than a Florida pool party of busy work.

Observations About ASB Chair’s Hearing Outburst

When the ASB Chair was grilled by Rohit Chopra, an ASC Board Member and the Director of the Consumer Financial Protection Bureau, she lost her composure. She named me specifically without being prompted as the accusor. She brought up her husband, a senior executive at McKissock, and the inherent conflict. Director Chopra was being highly critical of her apparent conflict of interest, which she apparently can not see, yet most people outside of TAF I mention this too are mortified. I felt sorry for her since she still can’t see the conflict of interest. I don’t know anyone I have spoken with about this, including people in the room when she was appointed, who don’t see the conflict of interest. It has nothing to do with whether she acts on the conflict. It’s the fact that it exists at all is entirely wrong. Promoting public trust in the industry is tough when there is no oversight, allowing these sorts of things to occur (please go past your own bias, Becky. Your friend represents to industry, just like you said I did at the hearing).

An Appraisal Institute Deep Dive

I believe there are a lot of improvements underway at the Appraisal Institute now that JA is gone, some of which are very visible to the profession and some of which are internal, including changes to policies and procedures to minimize the control formerly exercised by the FOJs. I’ve cobbled my notes from many conversations about the organization.

– ADI & AI PAREA Are Underway
The Appraiser Diversity Initiative (ADI), the partnership between AI, Fannie, Freddie, and the National Urban League, and the imminent launch of AI PAREA, seem to be well underway. However, I’d love to see AI meet with TAF to help them fix their PAREA messaging (I mentioned this earlier).

– The JA Era Is Finally, Really, Absolutely Over
CEO Jim Amorin abruptly ‘retired’ late last year. The speculation is that he realized the new Board of Directors, which was seated on January 1, 2023, would no longer offer him cover despite the organization’s faltering membership numbers and ever-increasing staffing costs under his nearly two decades of leadership. This was one of the best things that has happened at AI. JA served on the board of directors starting sometime in the mid-2000s, was elected to two 4-year trips through the officer chairs, including twice serving as President, and then served as the CEO for about the last five years. One wrinkle I recently heard was that JA reportedly didn’t like the scrutiny he was under from President Steinley and the Board of Directors after AI’s terrible performance with state approvals for their education became public. Many friends tell me that getting a CE approval certificate for an AI offering in 2021 and 2022 was uncertain after taking a class. Many appraisers decided to take their education elsewhere due to the unpredictability of AI’s education approvals in the states. Thus McKissock has thrived. If you think about it, what is more, basic for an education provider like AI than ensuring their offerings are approved by the state boards and re-approved when they expire a few years later? If an education provider can’t even get that right, how can it grow its importance in the profession or even be taken seriously? I now hear from my regulator contacts that the CE approval situation for AI is finally improving. The organization appears to be returning to doing the most basic things in education delivery – like making sure the states approve the classes – more responsibly. Better late than never, I suppose.

– CEO Search Project Team (CEOSPT)
From Craig Stenley’s President’s Message, it sounds like the team was picked and the search is well underway. For the first time, I understand the CEOSPT is not controlled by a Past President that is a fellow FOJ extremist. In the past, AI’s CEO search teams were always slanted to an FOJ outcome (like the still-in-place rules for the NNC). However, my sources tell me that the members of this search team are highly respected throughout the organization and are independent thinkers. Steinley picked the team, and the Board approved their work plan, which is super positive in shaping the future of the organization (that lost its way 10-15 years ago). The only Past President on the current CEOSPT, Bruce Kellogg from 2005, was in leadership before the Terry Dunkin, Jim Amorin, and Les Sellers takeover of the organization after Kellogg’s term. You know, the people that initiated the lavish international travel with support spouses and first-class seats that I’ve frequently covered – all justified by a promise to grow membership outside of the US finally. However, if you use AI’s Find an Appraiser feature today, you can see that the organization has very few international members. So, all that travel and the promises of success appear to have been just smoke and mirrors to justify spending tons of member dollars on international junkets, a.k.a one big boondoggle that FOJs have fought hard to keep. I’ve never understood how the organization tolerated those actions as they were happening, but with JA gone, I hear that international travel is now very sparse. I don’t know the timeline of CEOSPT, I see the job description is now out in the market. Based on this, I’m guessing that AI must be on a timeline to pick a new CEO fairly soon. I pray that CEOSPT will take this opportunity to move away from the organization’s mistakes and missteps. I would encourage the search team to make a clean break from the past and select an outsider with a proven track record of running a non-profit or, better yet, a for-profit organization as AI’s next CEO. It’s time for a generational change at the top of the organization – a man or woman that can come in and lead the entire staff to be refocused on providing services and benefits to members at a much lower cost in terms of salaries and benefits. I’ve presented a number of detailed analyses from past annual reports that showed the JA C-suite was wildly overpaid – ironically, more than double the market comps! It seems clear that only a new CEO from outside the current culture will have the ability to make the necessary changes at the staff level to refocus AI on its chapters and members.

– The World Is Watching
The Board of Directors realizes that the profession is watching the CEO selection process. Suppose AI is truly going to be perceived as an organization that is changing to be more inclusive and welcoming to all appraisers. In that case, it can’t continue with the same leaders of the past – a strong and dynamic external leader is needed.

– Election Integrity Is Critical
The Vice President eventually becomes the President after a few years of advancing through the officer positions. The sham petition process, used by the FOJs to keep control of the organization and to keep out agents of change, was changed by the Board of Directors before this election cycle began to curb abuses. Just refer to history and what Leslie Sellers did to Ann Johnson if you need to understand why.

I feel like I know way too much not to be a member of AI! My persistent coverage of them is simply because AI is the largest trade group in the industry, and when it behaves badly, it reflects poorly on all of us in our industry. The public trust between AI and TAF has been brutalized for over a decade. Hopefully, change for the better in both organizations has begun.

Why The AI NNC Cannot Be Chaired By The Past President

Several sources have informed me that Claire Aufrance has been selected as the next Vice President. I believe, based on what I’ve read and lots of feedback from AI leadership and members, who were adamant that she was the least qualified of the four candidates. Something about crying at a board meeting when someone disagreed seems like a disqualification to be an eventual President—yet past President and NNC Chair Super Duper awarded her the 2022 Burt L. Thornton President’s Award. I’m just spitballing, but when he’s not placing a clock on his head, Super Duper speaks by heavily leaning on quotes from famous people. One wonders if he wrote her questionnaire since it was heavily laden with quotes and little substance.

How is it OK to then chair the NNC as past and present? A conflict of interest and feedback loop shows that the FOJ stench remains. It is also clear that the FOJ old guard thinks that three white women on the ladder to be president is equal to having people of color on the pathway. While raising the number of women in leadership roles is fantastic, I also fear excluding people of color from these positions takes away credibility from AI’s industry leadership role.

Trademark Idea for AI

Just a quick thought on branding. I always refer to The Appraisal Institute as “AI,” but over the past two months, “Artificial Intelligence” AI is dominating my news feed. The latter AI has broad implications for the future of valuation. How about branding AI for valuation as “AI’s AI” or AI-AI?” Just a thought.

John Brenan on Buzzcast

After all that mixed commentary, here’s a palette cleanser…

John Brenan, a good friend, stand-up guy, and muscle car fiend like I am, talks about giving back to the industry. He is a wealth of knowledge about the appraisal industry, and TAF’s institutional knowledge collapsed when he left them a few years ago. John opened his own consulting firm, JSB Consulting.

In today’s Buzzcast episode, host Hal Humphreys chats with John Brenan, a giant in the appraisal industry with over 40 years of experience. Brenan talks about his journey in this industry, his newest venture into consulting services, and why he began offering these services to help appraisers use education and prevention to stay compliant.

OFT (One Final Thought)

In my last college course, on the last day of class for my last class of the day, I gave a speech about awful stuff in your food. I remember something about the number of rodent hairs the FDA allows in peanut butter (I love peanut butter). So I asked ChatGPT the following (since we know everything in regenerative AI is true, just like the internet):

Now watch twelve minutes of peanut butter humor [required listening]

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons at 2 p.m.) 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 running quickly but on empty;
– You’ll be more peanut butter friendly;
– And I’ll pick out the rodent hairs myself.

Brilliant Idea #2

You’re clearly full of insights and ideas as a reader of these Housing Notes. Please share them with me early and often. I appreciate every email I receive, as it helps me craft the following week’s Housing Note.

See you next week!

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

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