Changing The Housing Soundtrack

October 15, 2021

While the first Matrix movie in 1999 was absolutely perfect. The Rage Against The Machine music was amazing, so much so that I named my blog after the movie. And now a new Matrix movie is coming out. I realize there will always be someone who tries to make the original version better. Here is someone who thought Dire Straits’ “Walk of Life” would be a better fit for the ending. You know what? Its kinda fun! Here are some other modified movie endings with the same song. Shout out to my friend Constantine for the share.

But I digress…

Westchester County Housing Market Is Still Bonkers, Setting A 40-Year Sales Record

I’ve been the author of the expanding Elliman Report series since 1994 and Douglas Elliman has always championed neutral market information to help their customers better navigate changing market conditions. This week Douglas Elliman published our Q3-2021 research on the Westchester County, New York housing market which continues to benefit from the flexibility of remote work since the pandemic lockdown ended.

In fact, the Bloomberg article featuring our research Westchester Home Sales Hit 40-Year High as Suburbs Still Beckon was the fourth most read on the 350K Bloomberg Terminals.

And a cool chart…

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WESTCHESTER SALES MARKET HIGHLIGHTS

Elliman Report: Q3-2021 Westchester Sales

“The county market was characterized by new records that reached across prices, sales and pace.”

– All price trend indicators were at record levels and were well above two year-ago levels
– The number of sales surged to the highest level in at least four decades
– The pace of the market was the fastest on record, and the market share of bidding wars rose to a new record
– Single family median sales price rose to a new record as average sales price was the second-highest on record
– Condo sales and price trend indicators rose year over year to new records
– All luxury price trend indicators rose year over year to their second-highest levels on record
– Luxury listing inventory fell to its lowest level on record

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PUTNAM SALES MARKET HIGHLIGHTS

Elliman Report: Q3-2021 Putnam & Dutchess Sales

“All price trend indicators rose to new records for the second straight quarter.”

– All price trend indicators rose year over year to new records for the second straight quarter
– The number of sales rose annually for the fifth consecutive quarter
– Listing inventory declined year over year for the sixth straight quarter

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DUTCHESS SALES MARKET HIGHLIGHTS

Elliman Report: Q3-2021 Putnam & Dutchess Sales

“Median sales price and the number of sales jumped to new records.”

– Median sales price rose to a new record for the third time in the past five quarters
– The number of sales surged to the highest level tracked in more than twenty-five years
– Marketing time fell to the lowest total on record, and listing discount fell to its tightest level in nearly eighteen years

The Manhattan Rental Market Still Rocks But The Intensity Of Growth Is Waning

Douglas Elliman release our rental research this week for Manhattan, Brooklyn, and NW Queens and there were some interesting results. Bloomberg coverage yielded this super cool chart.

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MANHATTAN RENTAL MARKET HIGHLIGHTS

Elliman Report: 9-2021 Manhattan, Brooklyn & Queens Rentals

“The year over year increase in new lease signings continued to ease as concessions given by landlords slid.”

– Net effective median rent rose year over year but fell short of the same period in 2019
– The number of new lease signings rose year over year for the twelfth straight month, but at a more modest rate
– The market share of new leases with landlord concessions fell to their lowest rate in nearly four years
– Doorman median rent has been rising sharply in recent months as non-doorman median rent continued to decline
– New development median rent continued to expand year over year as existing median rent remained flat
– New leases at or above $10,000 per month saw its largest market share on record
– Luxury listing inventory fell by more than half over the past year to its lowest level since 2015

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BROOKLYN RENTAL MARKET HIGHLIGHTS

Elliman Report: 9-2021 Manhattan, Brooklyn & Queens Rentals

“The year over year increase in new lease signings was the most for September since 2008.”

– New lease signings rose to their highest level for a September since at least 2008
– Net effective median rent rose month over month for two of the past three months
– The market share studios and 1-bedrooms rose year over year

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QUEENS RENTAL MARKET HIGHLIGHTS

Elliman Report: 9-2021 Manhattan, Brooklyn & Queens Rentals.

[Northwest Region] “The year over year increase in new lease signings more than doubled but fell short of setting a record for the first time in six months.”

– Net effective median rent rose month over month for two of the past three months
– The number of new leases more than doubled year over year and rose by a third from the same period two years ago
– The market share of landlord concessions remained higher with smaller apartments

Parsing Out The Hi/Low Rental Market Performance Using Doorman/Non-Doorman as a Proxy

The higher end of the rental market (upper half) is showing great strength after the lock down than before the pandemic, reflective of the economic damage directed at lower wage earners.

NSFW: Comedian Bill Burr’s Glorious Take On The Excess Of “The One”

I’ve been writing about this $500 million house in Bel-air, LA for ages as it came to symbolize the “aspirational pricing” era description (I coined the phrase circa 2014). The walk-through is mindboggling but at some point, the developer suffered a disconnect from what was being created and the pool of potential buyers that could afford it. Give a talented, creative person unlimited funds without oversight and this is what you end up with. What a financial mess.

You need to watch the entire thing with the sound on to hear Bill Burr’s riffs, like the one about 100 pickup trucks being parked there every day like a Ford dealership during construction.


CNBC: Zelman Analyst Makes Case Housing Oversupply Is Approaching

It’s hard to comprehend with the current insanity of record-low inventory that there is an oversupply looming, but:

“There is a downward trajectory of population growth, household formation as well, that’s really going to undermine the need for what’s built,” said Dennis McGill of Zelman & Associates.

Dennis is an incredible analysis, along with Ivy Zelman. Huge fan of their work.

Listen to his interview with Diana Olick in Today’s tight housing market is already overbuilt, one analyst says.


[click on image to hear interview]

Miller Samuel: Could This Be Where Our Company Name Came From?

Hey, it’s Friday!

Getting Graphic

My favorite charts of the week made by others

Appraiserville

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

Ernie Durbin: Real Property Appraiser Qualification Criteria and the Public Trust

My friend, appraisal colleague, and RAC compatriot wrote a letter to the ASC addressing how the AQB standards for entrance into the profession is a significant part of the problem and that TAF has essentially violated the public trust they were supposed to uphold. It’s also important to be aware of the TAF bat-shit crazy letter for the proper context.

Jamie Owen Interviews Me About Housing Bubbles And Goes All In On Tulip Shortages

Jamie Owen is a good friend and someone who pumps out some high-quality content on his Cleveland Appraisal Blog. I often share his links on these Housing Notes each week. Even the production values on his podcast are top-notch. We have a great conversation and I encourage you to subscribe to his podcast, Home Value Stories.

Appraisers Catch A Lot Of Blame By People Paid On Commission

There was a good piece in the Wall Street Journal: Soaring Home Prices Are Roiling Appraisals and Upending Sales the other day that illustrated the chasm between those on commission versus the appraiser. I got to share my views which are captured in my tweet. If you think about the scale of the vulnerability we have as a profession (of lone wolves), with few entities in our corner, it is massive.

OFT (One Final Thought)

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 in the Matrix;
– You’ll rage against the machine;
– And I’ll take the walk of life.

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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