The U.S. Housing Market: Greatest Of All Time (GOAT)?

October 2, 2020

I’m no market bear but the chronic lack of supply and surging prices in the national context doesn’t match wage growth and can’t be sustainable – but more importantly this week I turned 60 and our appraisal company Miller Samuel turned 34 so there’s that. Plus we all need to take a time out and watch goats.


But I digress…

New Signed Contracts Remain Very High But Appear To Be Plateauing

I have been the author of the expanding Elliman Report series since 1994 for real estate firm Douglas Elliman. We’ve recently added a new type of report to the series.

These monthly regional reports break out each market’s performance by eight price tranches on a year over year basis and are a supplement to our quarterly market report series.

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New York

Elliman Report: New York September 2020 New Signed Contracts Report

Manhattan
While new signed contract activity remains below year-ago levels, remaining the outlier for the region, overall listing inventory gains of all three property types slowed. Their combined total rose only nominally year over year.

Brooklyn
The new signed contract total of all three property types exceeded the prior-year level again but appeared to be plateauing. New listings continued to rise as sellers are looking to take advantage of the spring demand surge.

Long Island (excluding H/NF)
New signed contract activity for single family and condos continued to be significantly higher than year-ago levels, but growth appears to be plateauing. Some of the largest year over year gains in new signed contracts were occurring above the $300,000 threshold for single families and above the $400,000 threshold for condos.

Hamptons
Single family new signed contract totals rose sharply as they have been since the spring with nearly double the prior year’s activity. Condo new signed contracts also continued to see a significant year over year gain. New listings across both property types have been rising quickly in response to considerable demand.

North Fork
Single family new signed contract totals rose sharply year over year as they have been since the spring. New listings in the single family market rose annually at the same rate as new signed contracts.

Westchester
New signed contracts for single family and condos remained at a substantially higher level than a year-ago but showed plateauing signs in recent months. The annual rise in new listings did not keep pace with new signed contracts for both property types over the same period.

Fairfield
New signed contract gains for single family and condos were higher than a year-ago but showed signs of plateauing in recent months. The annual rise in single family new listings did not keep pace with new signed contracts over the same period.

Greenwich
Single family new signed contract totals continued their significant upward pace, nearly four times the year-ago levels. Condo new signed contract activity more than doubled over the same period. New listings across both property types did not keep pace with new signed contract growth.

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Florida

Elliman Report: Florida September 2020 New Signed Contracts Report

Palm Beach County
Year over year, new signed contract gains for single family and condos continued to remain well above year-ago levels. New listings for both property types entering the market were up only slightly over the same period.

Broward County
Year over year, new signed contract gains for single family and condos continued to remain well above year-ago levels. The overall number of new listings for both property types entering the market remained similar over the same period.

Miami-Dade County
Year over year, new signed contract gains for single family and condos continued to remain higher than year-ago levels. The single family new listings total remained similar to the prior year, while new condo listings entering the market fell sharply over the same period.

Pinellas County
New signed contract gains for single family and condos continued to remain above year-ago levels. The overall number of new listings of both property types entering the market fell short of the prior year total.

Hillsborough County
Year over year, new signed contract gains for single family and condos remained slightly above year-ago levels. The overall number of new listings for both property types entering the market fell short of the prior year total.

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California

Elliman Report: California September 2020 New Signed Contracts Report

Los Angeles County
Single family new signed contract activity gains remained above the $600,000 threshold as the new listings dropped sharply. While condo new signed contracts rose sharply from the prior year, condo new listings more than doubled over the same period.

Orange County
Most of the single family new signed contract activity gains remained above the $600,000 threshold as the new listings declined sharply. Condo’s new signed contracts rose from the prior year, with most of the increases occurring above the $300,000 threshold.

San Diego County
New signed contract activity for single family and condos remained well above year-ago levels but continued to show plateauing in recent months. However, supply remained limited, with new listings falling to roughly half prior-year levels.

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Colorado

Elliman Report: Colorado September 2020 New Signed Contracts Report

Aspen
New signed contract gains of both property types were nearly double the prior-year level, significantly outpacing the increases in new listings. While the excess demand partly caused by the spring market shut down has been largely satiated, the market remains considerably more active than the year-ago period.

Snowmass Village
New signed contract gains of both property types were sharply higher than the prior-year level, significantly outpacing the number of new listings coming onto the market. While the excess demand partly caused by the spring market shut down has been partially satiated, the market remains significantly more active than the year-ago period.

Manhattan Third Quarter Sales Still Down, Reflecting Contracts Signed During And Shortly After Lockdown

The Manhattan market still remained the laggard in the region. Listing inventory continued to climb, but remains short of the record set in Q1-2009 and the second-highest level seen in Q2-2009.

Elliman Report: Q3-2020 Manhattan Sales


[click to open Bloomberg article]

As you can see in the following screenshot of my spreadsheet, closed sales in the third quarter saw a larger year over year decline at lower price levels. This skew has been significant enough to cause top-line price trend indicators to rise year over year, yet MARKETWIDE PRICE TRENDS ARE NOT ACTUALLY RISING! The market has since pivoted as indicated by the New York New Signed Contract report presented earlier as the sub-$2 million market is showing more sales strength.

And total MANHATTAN inventory remains high…


[click image to open full report]

MANHATTAN SALES MARKET HIGHLIGHTS

Elliman Report: Q3-2020 Manhattan Sales

Co-ops & Condos
‘This quarterly report largely reflects sales contracts that were signed during and after the COVID lockdown that ended in late June.”

– The COVID-19 market shutdown caused the number of sales to decline year over year by roughly half for the second straight quarter
– The largest annual decline in sales occurred in smaller apartments, skewing overall price trends higher
– The market saw the highest listing inventory total and slowest market pace since 2009
– Resale bidding wars fell to their lowest market share level in almost five years of tracking
– Coop average sales size expanded to cause median sales price to increase annually for the first time in three quarters
– Condo average square footage rose to its highest level in more than thirty years, skewing prices higher
– The longest average marketing time for new development in more than eight years
– The number of new development closings reached their highest overall market share of the past five quarters, exceeding the decade average
– The largest year over year decline in luxury listing inventory in nine years
– The share of resale and new development sales nearly split the luxury market

NORTHERN MANHATTAN SALES MARKET HIGHLIGHTS

Elliman Report: Q3-2020 Northern Manhattan Sales

“The number of sales remained well below year-ago levels as the market climbed out of the spring lockdown.”

Co-ops & Condos
– The number of sales fell year over year at the highest rate in fifteen years
– Listing inventory reached its highest total in twelve years of tracking

Townhouses
– Sales rebounded slightly from the prior quarter but remained well below year-ago levels
– Highest market share of Manhattan townhouse sales in nearly three years

The 200-Year History of U.S. Interest Rates

The website Visual Capitalist is a terrific place to seek out economic context.


[Visual Capitalist]

Downtown Josh Brown Is All In On The Housing Market

Josh Brown’s The Reformed Broker is a must-read web site. This prolific blogger and CNBC commentator has a lot of useful insights. Take a listen to this discussion on his podcast.

Just What My 200-Year-Old Historic Home Needs

Yahoo Finance VIDEO California’s Housing Market Remains Strong Despite Fires & Covid

Lack of supply is where the greater concern is.

California’s housing market is responding to growing demand and low inventory, says Jonathan Miller, CEO of Miller Samuel. He spoke with Yahoo Finance’s Alexis Christoforous and Brian Sozzi on Yahoo Finance TV

Getting Graphic

My favorite charts of the week

From my friend Mike Simonsen over at Altos Research…

Upcoming Speaking Events

Really looking forward to this one. You can register here or click on the image to go to the registration landing page.

Appraiserville

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

Slandering Appraisers: A Cincinnati Real Estate Broker May Be Both A Fool And A Tool

Real estate broker Karen Schlosser provides videos to her customers as part of her Tech Tool Monday Series.

She recently promoted her video called “Fool The Appraiser” – a catchy marketing phrase to promote dishonesty. She literally has no idea how offensive this is to the appraisal industry and how unprofessional this makes her look to the public and her peers.

From the transcript of her video:

So, the purpose of the game is to fool the appraiser into thinking that the property is worth the agreed upon purchase price.

I wonder if anyone at the National Association of Realtors has seen this marketing strategy since it may violate NAR’s Code of Ethics and Standards of Practice of the National Association of REALTORS®? She sent out fliers to the brokerage industry touting her “Fool the Appraiser” video. You can do that yourself by clicking on this link.

Standard of Practice 15-2
The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses and their business practices includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. (Adopted 1/07, Amended 1/12)

Standard of Practice 15-3
The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses, and their business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Adopted 1/10, Amended 1/12)

Here is the webinar handout. Clueless.

Her lack of judgment and professionalism is stunning whether or not she is good at selling properties.

OFT (One Final Thought)

Everyone needs to lighten up every so often.

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 boom;
– You’ll zoom;
– And I’ll watch goats.

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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