The Housing Market Has Been Something To Cry About

Well, it’s Friday the 13th. Just dial a number…and cry.


Did you miss last Friday’s Housing Notes?

October 6, 2023: Housing Pumpkin Spice In Your Kitchen

But I digress…

New York City Rental Market Tops Out

I’ve been the author of an expanding series of market reports for real estate firm Douglas Elliman since 1994. Our rental report has been heavily covered during and after the pandemic era for its roller coaster behavior.

Bloomberg generated a cool chart in their coverage.

Here’s the October 12th and 13th rental report coverage so far.

Elliman Report: September 2023 Manhattan, Brooklyn and Queens Rentals


“Median rent slipped from the prior month’s record as listing inventory expanded.”

– Median rent slipped from the prior month’s record, suggesting the market is past peak levels
– New lease signings slipped to their lowest level since May as landlords emphasize renewals
– The vacancy rate exceeded the three percent threshold for the first time in more than two years
– Doorman new lease signings were just above pre-pandemic levels, while those of non-doorman buildings were substantially lower
– Median rental price for new developments declined year over year for the first time in five months as median rent in existing buildings continued its more than two-year ascent
– Luxury price trend indicators slipped year over year but remained sharply above pre-pandemic levels
– Luxury listing inventory expanded annually for the first time in three quarters
The luxury market share of bidding wars was higher than the overall market


“Price trend indicators come down from the summer records.”

– Median rent slipped quarter over quarter from the July record but still well above pre-pandemic levels
– New lease signings fell year over year for the fourth time, remaining above the pre-pandemic level
– Listing inventory rose annually for the first time in four months


[Northwest Region] “Median rent slipped from the prior month’s record as listing inventory expanded.”

– Median rent declined from the prior month’s record, but still well above pre-pandemic levels
– New lease signings fell year over year for the sixth time, remaining above the pre-pandemic level
– Listing inventory rose annually for the first time in three months

For more charts, visit our gallery.

NAR Proves That Trade Groups Aren’t Infallible

With an appalling culture of secrecy maintained by wildly overpaid executives (I believe their CEO is paid close to $3 million per year), NAR seems to be imploding right now.

These three prominent real estate firms are backing away from the management cesspool that has severely damaged the National Association of Realtors (NAR) brand. Lousy behavior tends to expand when an organization perceives itself as irreplaceable. Plus, there are two class action suits and a culture of sexual harassment—my goodness.

By my crude estimates, a substantial number of U.S. real estate agents and brokers will drop out of NAR membership.

Anywhere RE (former Realogy) who owns many of the major brands – Coldwell Banker, Century 21, Corcoran, ERA, BHG and others.

A few weeks ago, I talked about how the real estate tech sector (Redfin, Zillow) was the public spokesperson of the real estate industry while NAR stood silent. Yes, NAR does its continuous research releases, but they are largely silent on ‘breaking news’ type issues. This behavior has been a failure of leadership, and with the collapse of confidence in NAR measures by the departure of these major brands (and probably more soon), I doubt they can ever be in their current form.

Lots Of Renters Competing For The Same Apartment

The NYT must read Calculator column shares a RentCafe study of 139 US housing markets ranking their lease renewal rate and number of tenants competing over the same apartment.

Manhattan has a 66% renewal rate and nine renters competing for each apartment. Based on my on-the-ground feedback, nine seems super high for Manhattan.

Brooklyn, Queens and Riverdale (Bronx) Heavy On Price But Light On Sales Inventory

With low inventory, prices continue to have a firm underpinning, keeping sales low too.


“Borough-wide median sales price remained flat for the fourth consecutive quarter.”

Elliman Report: Q3-2023 Brooklyn Sales

– Median sales price remained the third highest on record for the fourth consecutive quarter
– The number of sales declined annually for the fifth straight quarter
– Listing inventory fell year over year for the sixth consecutive quarter


Elliman Report: Q3-2023 Queens Sales

“Listing inventory and sales continued to slide.”

– Median sales price declined year over year at a diminishing rate for the second time
– Listing inventory slid annually for the third straight quarter, well below pre-pandemic levels
– Sales fell year over year for the fifth straight quarter, below pre-pandemic levels

[includes Fieldston, Hudson Hill, North Riverdale, and Spuyten Duyvil]

Elliman Report: Q3-2023 Riverdale Sales

“Listing inventory fell sharply year over year, restraining sales.”

– Median sales price declined annually for the third time in four quarters
– Listing inventory fell year over year for the sixth time
– The pace of the market remained one of the fastest on record

For more charts, visit our gallery.

Brooklynites: Remember The L-Train Shutdown? Here’s What It Did To Housing Prices

Here’s the FHFA white paper: Working Paper 23-06: Valuing Public Transit: The L-Train Shutdown

Published: 10/11/2023
Author: ​Becka Brolinson


In this paper, I quantify the value of access to public transit in New York using the surprise, hurricane-related announcement of the temporary shutdown of an important piece of transportation infrastructure: the L-train connecting Brooklyn and Manhattan. My approach allows me to measure changes in housing sales prices by using a change in public transit infrastructure that is (a) temporary and (b) not an outcome of city transit planning, but rather an unexpected consequence of a natural disaster. I find that the L-train’s shutdown announcement caused a temporary decrease in sales prices for affected housing units of 6.4 percent. This estimate suggests a monthly capitalization rate of public transit access of around $863 for housing units where the L-train is the nearest subway stop, demonstrating that households in New York City ascribe a high value to transit access. Using these estimates, the benefits of the repair outweigh the costs, with the benefit-to-cost ratio of the repairs ranging from 2.76 to 2.78.​

Brick Underground Launches ‘Boards & Buildings’

I’ve been a long-time fan of Brick Underground, a web site with high-quality writing that helps consumers navigate the apartment market of New York City. They are expanding their footprint with their boards and buildings initiative.

“Given the unprecedented uptick in challenges facing co-op and condo buildings in New York City today, combined with ever-evolving regulations and rising taxes amid a depressed sales market, boards are expected to become overnight experts in numerous areas outside their wheelhouse,” said Teri Rogers, CEO and founder of Brick Underground. “Our ‘Boards & Buildings’ resource will provide co-op and condo board members, as well as property managers, free on-demand’ news you can use’ that will help them stay current on the latest issues and solutions.”

Initially, “Boards & Buildings” will include original content from Brick Underground’s editorial team, as well as their strategic partner The Folson Group, New York City’s premiere co-op and condo consultancy. Moving forward, the section will feature case studies, expert Q&As, and thought-leadership articles from service providers and other industry experts, that educate and inspire boards to reach their goals. Later this year, the section will feature video content.

In conjunction with the launch, several industry-leading companies have partnered with Brick Underground and will be contributing branded advice and thought-leadership content. They are as follows:

DL Partners, LLP, a full-service real estate law firm serving condominium and co-op boards, developers, investors, and homeowners throughout New York, which is associated with the article on how to negotiate access agreements.
National Cooperative Bank, a values-based bank serving New York City cooperatives and condominiums with full-service banking and financing.
O&S Engineers & Architects, a full-service design and consulting firm serving NYC co-ops, condos, and commercial buildings since 1996.
Rosenberg & Estis, P.C. NYC’s largest firm focusing solely on real estate, providing comprehensive legal representation to owners, developers, operators and investors.

NYC’s Northern Suburbs See Record Prices And Nominal Listing Inventory

Wow, records are being set everywhere.


Elliman Report: Q3-2023 Westchester Sales

“Overall price trend indicators set record highs as listing inventory reached record lows.”

– All price trend indicators rose to new highs, remaining well above pre-pandemic levels
– Listing inventory fell to the lowest level on record, creating the fastest-paced market in history
– Bidding wars accounted for more than half the sales in the market, the highest on record
– Single family sales fell sharply year over year, restrained by near-record low supply
– Condo sales fell sharply year over year for the fifth consecutive quarter
– Listing inventory was unchanged year over year but was two-thirds below pre-pandemic levels
– Listing median sales price edged up annually to the second highest on record
– Listing bidding war market share rose to nearly half of all sales


Elliman Report: Q3-2023 Putnam/Dutchess Sales

“Overall price trend indicators rose to their highest levels on record.”

– All price trend indicators rose to new highs, sharply above pre-pandemic levels
– Listing inventory fell significantly year over year, remaining well below pre-pandemic levels
– Bidding wars market share accounted for a record six out of ten sales


Elliman Report: Q3-2023 Putnam/Dutchess Sales

“All three price trend indicators rose to their highest levels on record.”

– All price trend indicators rose to new highs, sharply above pre-pandemic levels
– Listing inventory fell significantly year over year, remaining well below pre-pandemic levels
– Bidding wars market share was the third highest in history, nearly half of all sales

For more charts, visit our gallery.

Getting Graphic

My favorite housing market charts of the week of our own making

For more charts, visit our gallery.

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).


The Black Box: TAF’s President’s Won’t Be Announced (It’s Kelly!) Until The Last Minute

TAF is the ultimate black box. The only leader TAF has ever known, Dave Bunton, has indicated he will retire in 2024 with a few years on his contract remaining. Yet we don’t know what that turnover will look like because he can make it up. Of course, the Board of Trustees will vote on it, but Dave, the king of the monarchy, is already saying he will pass the monarchy’s control to Kelly, the Queen.

For the uninitiated, TAF is the organization that wrote the bat-shit crazy letter, the chickenshit letter and is the subject of an active investigation by HUD on whether USPAP promotes a lack of diversity in the appraisal profession (400th out of 400 occupations according to BLS in 2021).

A few years ago, the plan was to have Kelly Davids become the deputy-in-chief so Dave could collect a paycheck while Kelly did the work. That plan was scrubbed after it was exposed to daylight here. I can’t help but wonder if this is the plan for 2024. After all, TAF is a monarchy and has never been run by anyone else, and all the current positions have been hand-picked by Dave. What will the new TAF look like?

You guessed it – it will be precisely the same if not worse than now – when Kelly was first hired, she made an “enemies list” and promptly got rid of over 100 years of institutional experience in her first two years. Ask the appraisers of Ohio what they think about her brutal management style in her previous job.

TAF must follow the Appraisal Institute’s recent actions and hire someone outside the appraisal process using an executive search team. This transition is a real opportunity to clear the deck and purge the organization that has created most of the current problems in the industry.

Dave is waiting for time to pass until TAF distractors lose interest. A tone-deaf organization WITHOUT OVERSIGHT that maintains industry standards, causing it to be last in diversity and places individual appraisers in the cross hairs of the federal government NEEDS OVERSIGHT.

Congress needs to give the Appraisal Subcommittee the power of OVERSIGHT instead of only being able to monitor and review. Indeed, Congress didn’t intend to create an organization without any OVERSIGHT whose publicly stated goal is to maintain financial independence. Case in point – why was Kelly hired in the first place? The Appraisal Foundation has needed a regulatory attorney of staff for years, not a strategic planner, and she came up with the “vision” thing for financial independence.

This transition from Dave is a real opportunity to turn the page for TAF – hire someone outside the system. Otherwise, enabling Kelly is a real disservice and essentially cements the detriment of the industry for decades.

And if you were wondering why Dave missed the recent AARO conference? He was in Paris! LOL…attending the IVSC, a boondoggle for TAF just like holding the next TAF meeting in Palm Springs in two weeks. Good grief.

Appraisal Subcommittee’s Third Hearing On Appraisal Bias 11/10/23 10AM Eastern

The third hearing of a series of four is less than a month away. I spoke at the second hearing.

You can register here.

Fannie Mae Discredits Outside Appraiser’s Results If It Doesn’t Hit The Number

Another gem from the Cosmic Cobra Guy – WOW

(bold my emphasis below)




VENTURA, Calif. (October 13, 2023) – At the heart of Fannie Mae’s valuation system is a tool that shunts a subset of the millions of loans purchased by the mortgage giant each year into a “high risk” pool. Fannie then pressures and incentivizes a corps of in-house analysts to create further doubt about the loans in order to send repurchase demands to lenders for up to 50 percent of the cases. So says a Fannie Mae whistleblower who spoke with appraiser-author Jeremy Bagott on the condition of anonymity.

According to the source, when Fannie’s collateral analysts review appraisals of properties categorized as high-risk, they can issue one of two outcomes: a “finding” or a “defect.” A “finding” is equivalent to a slap on the wrist. A “defect” triggers a demand letter to the lender to buy back the mortgage it sold to Fannie. Loans with higher loan-to-value ratios draw greater scrutiny.

Originally, in-house human appraisers were employed by Fannie to create a check on its automated tool. But this evolved, said the whistleblower, into the mortgage giant using a system of behavior modification to both pressure and encourage analysts to agree with the results of the algorithmic tool, known as Collateral Underwriter. The check and balance to the automated system has become a coerced validation of it.

“Fannie has a large investment in the technology with much prestige riding on it,” said the source. “The values and adjustments created by [the tool] need to be right for the sake of Fannie’s technocratic vision.” Fannie’s analysts complain they are now pushed to validate the automated system’s findings, said the insider.

“Careers ride on Collateral Underwriter,” said Brian Jarrard, a former Fannie Mae subject-matter expert. “When human opinion differs from the algorithmic findings, trouble follows for the human. You’d better start agreeing with the tool’s output or you will find yourself in a professional development program.”

Jarrard corroborated much the whistleblower said about the internal workings of Fannie. He left the mortgage giant before it began incentivizing analysts to issue the buyback letters and penalizing those who don’t find a sufficient number of so-called “defects.”

“The goal with [appraisal] reports in the high-risk pool is to provide alternate data and discredit the outside appraisers’ comparable sales,” said the insider. “We always win, but if we had to go in front of an independent arbitrator, we would mostly lose,” said the insider.

In the spring of 2022, Fannie’s scoring system for evaluating the “production” of its in-house collateral analysts changed. The system now awards analysts more points if they are able to find overvaluations leading to lender repurchase demands. Having a high number of production points means you’re a high-flyer at the mortgage giant. High production points come with perks, prestige and job security. Staffers accumulate more production credits when they conclude appraisals are overvaluations.

“Many of the repurchase letters make no sense,” said the insider. If analysts don’t write enough defects on those files, they get hammered. If analysts fall short of their peers in “production points,” it’s considered their fault, said the insider.

“The stepped-up repurchase demands,” said the source, “are based on analysts at Fannie Mae trying to hit their numbers. It’s led to people pushing files into the repurchase bin that are extremely weak. If an [analyst] wants, or needs, to write a repurchase letter, he will find a way to do it, regardless of the quality of the appraisal.”

An offshoot of this stepped-up “productivity” in mortgage repurchase letters to lenders has been a flood of unsigned complaints to state appraiser boards, which seem to be connected. For at least a year, Fannie has been sending at times bizarre complaints to state agencies that respond to them in different ways. In some states, like Ohio and Texas, it has caused many hapless licensees to expend considerable time and money to clear their names.

Fannie Mae emphasizes the unsigned complaints are not automated. “Our expert analysts validate the appraisal results by asking questions like, Do the comparable sale selections make sense? Is the data accurate? Did the appraiser make appropriate adjustments? Are we getting the most probable value?”

Others, like the insider, cite lack of accountability.

“Because these [complaints] are not signed and the reviewer is not identified, there is no accountability to the reviewer,” said New York-based appraiser and blogger Jonathan Miller.

In 2022, Fannie Mae provided $684 billion in liquidity to the U.S. mortgage market, which enabled the financing of approximately 2.6 million home purchases, refinancings and rental units. That year, Freddie Mac, which uses a similar algorithmic tool, provided $614 billion in liquidity to the market, which enabled 2.5 million home transactions. In all, the two mortgage giants provided $1.3 trillion in liquidity to the market for over 5 million home transactions last year.

The median price of an existing home was just $278,200 in August 2019, according to the National Association of Realtors. But that figure surged to $407,100 as of August 2023.

As derivative data is repeatedly recycled through algorithms at Fannie and Freddie – something Cincinnati-based appraiser and podcaster Phil Crawford calls “data cancer” – expect similar rapid run-ups in median home prices as upside bias insulates markets from true price discovery.

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Jeremy Bagott is a real estate appraiser and former newspaperman. His most recent book, “The Ichthyologist’s Guide to the Subprime Meltdown,” is a concise almanac that distills the cataclysmic financial crisis of 2007-2008 to its essence. This pithy guide to the upheaval includes essays, chronologies, roundups and key lists, weaving together the stories of the politics-infused Freddie and Fannie; the doomed Wall Street investment banks Lehman and Bear Stearns; the dereliction of duty by the Big Three credit-rating services; the mayhem caused by the shadowy nonbank lenders; and the massive government bailouts. It provides a rapid-fire succession of “ah-hah” moments as it lays out the meltdown, convulsion by convulsion.

# # #

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OFT (One Final Thought)

From 2004? Has it been that long since Napoleon Dynamite? “You know,…skills.”

Author’s Note

I wrote these Housing Notes from my hotel room in Boston this morning. My wife and I attended the book signing of my good friend Constantine Vahouli to congratulate him on the release of his book: Miles, Chet, Ralph, & Charlie: An oral history of The Andover Shop – Only the Kindle version is available at the moment (pre-order). From the Amazon listing:

The Andover Shop is perhaps the most influential American clothing store that you’ve never heard of. Charlie Davidson transformed this tiny store into an unlikely literary and cultural salon that brought together musicians like Miles Davis, Chet Baker, and Bobby Short, as well as writers like Ralph Ellison and Albert Murray. Yet the story was not who he dressed, but why. This book explores the unexpected role that his particular style of patrician clothing played in making people visible in the years before full civil rights.

Brilliant Idea #1

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Brilliant Idea #2

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See you next week!

Jonathan J. Miller, CRE, Member of RAC
Miller Samuel Inc.
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