We're At Peak TikTok Housing Shock (Hey, That Rhymes)

We’re At Peak TikTok Housing Shock (Hey, That Rhymes)

To my regular Housing Notes readers: I have arguably way too much content this week, but I thought it would be helpful to carry you through the holiday weekend, especially if the parades run long.

This week I came across two viral NYC rental market videos on TikTok shared by the New York Post and Newsweek. Inspired by these TikTok clips, this edition of Housing Notes has an unusually high number of podcasts and videos (to keep my friend and colleague Ryan Lundquist occupied while he’s comping).

@charlottesaround How is this NOT a fire hazard??? #nyc #apartmenthunting #nycapt #fyp #foryou #FrunktheBeat ♬ original sound – charlotte

@sarahloukiernan the apartment market is insane in Brooklyn, maybe 50 people for 1 apartment #brooklyn #nyc #apartment #newyork #ny #SearchForWonderMom ♬ Elevator Music – Bohoman

But I digress…

Bloomberg TV: May 26, 2022 Discussing ‘Peak’ Affordability (We Seem To Be Close)

I was the last guest interviewed on Bloomberg TV live from Davos yesterday on Surveillance with Tom Keene and Lisa Abramowicz. Always fun because they are so smart and so intellectually curious. Before we went live, Tom was talking about all the property I own in NYC (I don’t own any) but we were chuckling about it as the segment began.

Mortgage Rates Fell For The Second Straight Week

Echoes of the Fed’s attempt to push rates higher in 2018 seem to be getting louder. Mortgage rates have retreated in the past two weeks indicating to me that banks have simply been enjoying the spread as they slash costs. Since I am a proud non-economist that possesses just enough Fedspeak to be dangerous and I see the economy through housing, I wouldn’t take my views on this topic very seriously but still, I am skeptical that the Fed will be able to sustain their upward pressure far beyond the next 50-basis point increase. While I think that higher mortgage rates are ultimately a good thing for housing given the proliferation of bidding wars and the collapse of listing inventory, I am a bit surprised by how much on the ground activity has slowed in the past two weeks that is not showing up in the macro numbers. Past experience shows us that buyers take several weeks to wrap their minds (and wallets) around a jump in rates. There is a really good WSJ piece about this: Fed Searches for the Magic Number to Cool a Red-Hot U.S. Housing Market.

[click on image for more Freddie Mac insights]

More Than Half Of Housing Price Gains Since Late 2019 Are Due To Remote Work

‘Zoom” became ubiquitous 24-hours after the pandemic lockdown began and it’s with us for the rest of our lives. It has upended the housing market and our relationship between home and work.

Now there is a study that has measured its impact of it on housing prices:

Housing Demand and Remote Work by John A. Mondragon & Johannes Wieland

From the abstract…

What explains record U.S. house price growth since late 2019? We show that the shift to remote work explains over one half of the 23.8 percent national house price increase over this period.

Insider: This Is Not A Housing Bubble

Here’s the tweet thread:

Kastle: 38% Of NYC Office Space Is Occupied

Kastle has emerged as a great way to understand commercial occupancy. Their numbers for May show that law firms are nearly back at 75% while overall occupancy is only at 43% and NYC trails DC, Chicago and Houston at 38.2%. So New York’s office towers are a little more than 1/3 empty and yet we are seeing record sales volume and record rental prices. This continues to confirm that people have entered the residential market to be in NYC for other reasons than work. That’s the power of remote, baby.

Here’s a slew of cool charts from Kastle:

TRD’s Deconstruct Podcast: Housing Bubble 2.0?


From The Real Deal’s Deconstruct podcast:

If you’ve tried to buy a house within the past two years, you know first hand how tough it’s been. Inventory is scant, prices are sky-high and if you do find a diamond in the chaos, chances are you’ll have to compete with other buyers to actually secure a winning bid. But now that mortgage rates are rising, are we seeing signs of a housing bubble? The Real Deal’s Deconstruct chats with George Ratiu, an economist at Realtor.com and TRD reporter Kathryn Brenzel about how concerned buyers should really be.

TRD Coffee Talk: Adam Piore on his book ‘The New Kings of New York’

The much-anticipated book release for “The New Kings of New York” occurred this week. I just started reading it and so far it is spectacular (and not because I am quoted a lot, ha)! It tells the story of the past two decades of New York City real estate up through the pandemic in a compelling way, rich with detail and obviously well-researched. Here’s an interview with the author. Here’s Adam’s website for the book.

Plain English Podcast: What’s Going On With The U.S. Housing Market (A: An Inventory Collapse)

I just tripped into Derek Thompson‘s new podcast: Plain English and his first episode covers something we love talking about here on Housing Notes: What’s Going on With the U.S. Housing Market?

In this podcast, we answer: What’s going on with the U.S. housing market? Is this a bubble? Is it bursting? Why are homes in America so expensive? Why are we so bad at building houses? Why is there so much homelessness in America’s richest cities? The Atlantic’s Jerusalem Demsas comes on the show to share her theories with Derek, and Derek explains why he thinks every important question about the U.S. housing market has the same fundamental answer: inventory, inventory, inventory. And here’s his recent article in The Atlantic: The U.S. Housing Market Has Peaked: But no, we’re not headed for anything even close to 2008.

Is The Plunge In New Home Sales A Recession Warning?

I don’t think so, but as Axios said: The real estate frenzy is over:

As the headlines scream: ‘Recession warning’: Sales of new homes plunge in April


“the best thing for high housing prices are high housing prices”

– someone on the Internet

My goodness, look at the progression of rising prices in the pandemic era caused by the combination of high land costs, construction supply chain issues, labor costs, and insatiable demand caused by the “too-low” mortgage rate trend since the pandemic lock-down ended.

So it follows that with conservative mortgage underwriting standards, new home sales have maxed out because affordability has peaked.

Whatever The Housing Market Trajectory, The Super Luxury Space Continues To Soar

Regular Housing Notes readers know that I have been tracking housing market sales at or above the $50M threshold since 2014, and 2021 was a banner year. But with 3 sales in the past week (1 of the 3 still has to close), 2022 results if annualized and the current pace persists, will be the second-highest in history at 36 sales, after the insanely high results of 2021. And we continue to see more super luxury sales coming

Ritholtz: Aspiring To Have More Housing Aspirations And More Properly Priced Inventory

At the end of 2015, I started embedding the word “aspirational pricing” into my writings. I remember using it on Bloomberg TV with Scarlet Fu sometime in January 2016 and got a laugh out of it (the clip seems to be long gone).


My friend Barry Ritholtz wrote about this in “Aspirational Pricing” on the must-read ‘Big Picture‘ blog, properly giving me credit for yet another shameless attempt by me to get into the urban dictionary. Its a ditty of a piece: Aspirational Pricing.

The tl:dr is that heading into the pandemic, we had a decade of reduced demand and underbuilding, a huge lag in household formation, building up to lots of pent-up demand.

And of course, now I’m highly attuned to the various uses of the word “aspirational” such as:

The rise of aspirational capitalism [Axios]

The Luxury Marketing Conundrum: From Aspirational To Inspirational [Forbes]

How This Brownfield Transformed into an Aspirational School Campus [Buildings]

Top of Mind Podcast With Rick Sharga of ATTOM

Two of my housing market thought-leader faves are Mike Simonson of Altos Research and Rick Sharga of ATTOM, who is known to cook a mean BBQ.

Jason Stanley of Local Logic Gives Us Housing Formation Rationale

I thought his commentary was refreshing, especially since he is looking at it from Canadian optics…

A rise in headship rate partly explains the boom in demand for housing on both the rental and for-sale sides. That has been supported by pandemic-era public supports and, since then, the roaring recovery of the labor market.

I just signed up for his newsletter.

Mike Deprete on Compass’ High Burn Rate

Readers of Housing Notes know that I became doggedly critical of Compass about a year after they launched, skeptical of their claims. Compass is the real estate broker Unicorn of Softbank, who brought us WeWork absent of due diligence and introduced the concept of disruption by capital. I’ve long noted that they are a traditional brokerage company and not a tech company but present themselves as such, presumably to get a higher valuation. I know a ton of great brokers at Compass and they will be just fine whether Compass implodes or not. My criticism isn’t about the brokers, but rather, about the business model and claims of being a tech company.

Well, the sh*t is starting to hit the fan as the market reshifts into the higher mortgage rate era with lower sales volumes. According to this detailed blog post by Mike DePrete, Compass’ Cash Burn Problem:

And as Thad Wong, co-CEO of @properties said in this Real Deal piece: Expansion teams: Residential brokerages take on new frontiers

Wong referenced the “Compass effect,” whereby the venture-funded brokerage rapidly gained market share by attracting top brokers with generous incentive packages, including stock options.

“Nobody joined Compass for their culture or anything,” Wong said. “They really joined because they were given more money.”

Getting Graphic

My favorite charts of the week made by others


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

Appraisers: The Appraisal Foundation Writes A Chickenshit Letter On Your Dime

On Thursday I received a poorly written and threatening letter from the Appraisal Foundation for a blog post I wrote in Appraiserville back in February. I responded on the same day to their May 26th letter and have officially dubbed it the “chickenshit letter” for the petty misrepresentations it provides along the lines of the bat-shit crazy letter my loyal followers are very familiar with. Now I have two letters to constantly share here.

Here is the response I returned to them. I didn’t appreciate their misrepresentations and am baffled why they would write this as it just gives me more tangible evidence of their bad behavior as an organization. Specifically, I don’t currently represent RAC at TAFAC and haven’t represented RAC at TAFAC for several years. TAF’s inference in the letter illustrates just how poorly written this letter really was.


May 26, 2022

Hi Todd,

I received your letter today, and I am disappointed that TAF continues to hide behind its bureaucratic largess. Given my history, I am surprised you signed such a letter, but I also want to thank you for providing more tangible evidence of how The Appraisal Foundation operates. Unfortunately, you never attached the “documents” you cited which are the “Ethics Rule Suggested Amendments-Draft 1 2 24 22” as well as “Statement of Understanding on December 15, 2016 – I’m sure it was just an oversight. I’d appreciate your follow-up in sending the document for my records at your earliest convenience.

If your letter were sincere, you’d acknowledge that most TAF leadership have been well aware of my Appraiserville blog for several years, especially after I became highly critical of your organization’s practices. Dave and I spoke on a call shortly after I lost faith in TAF – in fact, my Appraiserville content prompted him to reach out by phone. Specifically, my final straws were with TAF’s overreach on the definition of “misleading” and Dave’s (now known as) “bat-shit crazy” letter to ASC.

You already know this per your letter, but I’ll recap it for Dave and others who will read this at TAF: I received a call from a colleague who is good friends with Michelle Bradley, who advised me to take the document down that you referred to (I did during that call). Unfortunately, I was unaware of a lifetime commitment to confidentiality for a position I no longer hold yet continue to receive random documents. Nevertheless, I’m glad you appreciated that I complied with the request.

The hypocrisy of your letter runs deep in an attempt to have the last word. The following excerpt from it conveys the same tactic you are claiming I took against Michelle. Here is your quote:

… a fair reading of your references to Michelle Bradley and her husband, as expressed in the
second paragraph of your blog, suggest that you are questioning the integrity of both
individuals because they are married vis-à-vis USPAP updates and the cost of USPAP;
you’re not offering comments about the work of the ASB. We ask that in the future, you
refrain from engaging in such allusions.

Here is what I actually wrote about Michelle:

This insular operational style prevents TAF from understanding the optics that the industry and consumers look through. For example, as chair of the Appraisal Standards Board, Michelle Bradley, is responsible for modifying USPAP every two years (enabling TAF to continue to move towards financial independence by forcing appraisers to pay for USPAP when ASC is happy to pay for it but she is also married to Dan Bradley, the Appraisal Curriculum and Content Director for McKissock, the largest appraiser online training course out there). Wow. People I met when I was active in TAF who knew about this situation, shared their concerns about conflict of interest. I’ve met Michelle at conferences and is clearly a nice, smart person as I’m sure her husband is too and both are probably very good at their day jobs, but how is something like this permitted? Corporate boards don’t allow potential conflicts of interest like this. The optics on this tells us that there isn’t any real governance in TAF.

Since my point in Appraiserville was about the lack of any real governance at TAF, it would clear the air to the public to confirm whether or not there is a conflict between these two organizations. Since you missed the point I was making, Dave needs to provide answers to the following questions about this financial relationship:

1) Has there ever been an RFP between TAF and McKissock on their working relationship?
2) If there was, how long has it been since the original was issued and when was the last one issued?
3) If there was no such RFP that McKissock would have won, why not?

I think it would be reasonable for TAF to share Dave’s answers to those questions with the public. The appearance of two related people in positions of power to make decisions on mutual commerce is the issue here, not how hard these people work, how nice they are, and the personal sacrifices it takes to hold these positions. I’ll assume it’s a significant personal sacrifice, etc. but the optics are still wrong without full disclosure and public sharing of the RFP process, if any, that established the relationship in the first place despite the potential conflict of interest. If there is no RFP – which I assume to be the case – then please provide evidence that this potential conflict was vetted.

In my view, TAF has clearly lost its way and so it remains critical that creating legitimate transparency should be all about the appraisers and the public trust, and not be about obtaining financial independence by 2030 on the backs of appraisers.

One more thing Todd. I’m sure you are a nice person too, are committed to the work that TAF does, and are excellent at what you do as a personal property appraiser, but did you personally drive the need for this letter yourself, run it by the TAFAC board for a vote and then freely sign it or is this yet another example of the FOD monarchy in action? Please advise.




Here is the TAF letter sent to me on Thursday if you missed the earlier link in the post:

OFT (One Final Thought)

Here is a never-before aired episode of Scott Galloway‘s show on now-canceled before it was launched CNN+. I’ve always admired Scott for his ability to speak with clarity.

Brilliant Idea #1

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– They’ll be on TikTok more often;
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– And I’ll stay on Twitter.

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
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog

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