The Goal Is More Sweet Affordable Rental Housing

But I digress…

Market Report Gauntlet: Long Island Continues to Boom, While Hamptons Struggles

I’ve been the author of the expanding Elliman Report Series for Douglas Elliman Real Estate since 1994 and it is fascinating to see how different each market is, despite close proximity.

And as always, with me its all about the charts. Aside from knowing the report contents were widely read!

Our Hamptons Report content was within the 2nd Most Emailed Article in past 24 hours on Bloomberg Terminal (350K subscribers).

And a Hamptons chart two-fer!

Here are some key points about the Hamptons, North Fork, and Long Island for Q3-2019


Elliman Report: Q3-2019 Hamptons Sales

“Sellers’ willingness to negotiate expanded.”

– The number of sales declined year over year for the seventh straight quarter
– Listing inventory continued to rise, reaching a thirteen-year high
– Median sales price rose year over year for the first time in seven quarters
– The lowest third-quarter number of sales in eight years
– The number of condo sales rose year over year for the third time in four quarters
– Both single-family price trend indicators rose year over year together for the first time in three quarters
– The fewest number of sales at or above $5 million in six and a half years
– There have been nine straight quarters of annual increases in luxury listing inventory
– Most substantial luxury listing discount in more than four years


Elliman Report: Q3-2019 North Fork Sales

“North Fork saw the second-largest share of East End sales in more than eleven years.”

– Listing inventory increased year over year for the fourth straight quarter
– Median sales price declined for the first time in ten quarters
– By sales quintile, median sales price declined year over year across all segments
– North Fork sales represented the largest share of East End sales in more than eleven years
– Both condo price trend indicators rose year over year for the second straight quarter
– Single-family median sales price declined year over year for the second time in seven quarters
– The number of sales over $2 million fell sharply from the record set in the year-ago quarter
– Luxury listing inventory rose year over year for four straight quarters
– Luxury median sales price fell annually for the third time in four quarters


Elliman Report: Q3-2019 Long Island Sales

“Price trend indicators reached new records.”

– Median sales price set new record high after twenty-sixth straight quarters without an annual decline
– Listing inventory rose sharply year over year for the third straight quarter
– Number of sales rose annually for the third time in the last four quarters
– The second-highest number of single-family sales in at least twelve years of tracking this metric
– Shortest condo average days on market recorded since at least 2007 when the metric was first recorded
– Luxury listing inventory rose annually for the seventh consecutive quarter, above the decade quarterly average
– Both luxury price trend indicators fell from the same period last year
– New luxury listing inventory grew at the same rate as total inventory

Making A Mountain Out of a Beach: Aspen Rises While Los Angeles Slides

We observed some improved conditions in Aspen/Snowmass Village sales and price trends while Los Angeles activity is drifting lower.


Elliman Report: Q3-2019 Aspen Sales


“More sales with fewer listings as the pace of market accelerated.”

– The fourth straight quarter with the number of sales rising above the prior-year quarter

– Listing inventory declined year over year for the second straight quarter

– Average price per square foot rose year over year after four quarters of declines

– Condo sales surged year over year in the fourth quarter without a decline

– Single-family listing inventory declined in two of the last three quarters

– Luxury entry-threshold declined annually for the fourth straight quarter

– Luxury listing inventory expanded year over year for the fourth consecutive quarter


“Sales stabilized as listing inventory slipped.”

– Tied for the highest number of third-quarter sales in fourteen years

– Listing inventory declined annually for the third consecutive quarter

– Median sales price rose year over year for the fifth time in six quarters

– Luxury average price per square foot surged annually despite a drop in average sales size

– Luxury listing inventory fell year over year for the second time in three quarters


Elliman Report: Q3-2019 Los Angeles Sales

“While reaching a new overall price record, sales continued to slip.”

– Median sales price set a new record, exceeding the last record set in the prior-year quarter

– Listing inventory rose year over year for the sixth straight quarter

– All price trend indicators rose year over year for the second straight quarter

– The number of sales has declined annually for the sixth consecutive quarter

– Luxury single-family listing inventory has fallen year over year for three of the past four quarters

– Luxury condo median sales price expanded annually for the fifth consecutive quarter



Elliman Report: Q3-2019 Malibu/Malibu Beach Sales

– Malibu single-family sales and listing inventory have declined year over year for three straight quarters

– Malibu Beach condo median sales price rose year over year for five straight quarters


Elliman Report: Q3-2019 Los Angeles Sales

– Venice condo price trend indicators declined as sales surged year over year

– Mar Vista single-family listing inventory fell sharply for two straight quarters, restraining sales

Big Residential REIT Gets Thrashed by New Rent Laws

New rent laws are becoming a thing to combat rising unaffordability, i.e. New York, California, and Oregon have all passed significant rent laws to give more power to the tenant. This was apparent the drop in the EQR’s stock price after releasing its third-quarter press release. Here is a summary of the concerns on Seeking Alpha.

– Equity Residential (NYSE:EQR) drops 2.6% after management describes the “chilling effect” of rent control on development during its earnings conference call.
– In New York, rent renewal increases are down 50 basis points as the result of a new rent law, they said.
– Says 70% of the REIT’s California portfolio is subject to new rent caps.
– Sees rent control leading to lower apartment supply in cities.
– EQR plans to acquire more apartments in Denver market, with the aim to boost Denver to account for 5% of net operating income from 1.5% now.

‘My First Apartment” Podcast by Jonathan Miller, CEO at Miller Samuel

I had a fun discussion about something I hadn’t given much thought to in a long time with Aaron Ghitelman of Localize: my first apartment.

Will The New York State Rent Law Create More Affordable Housing Investment?

If it does, it will take a while.

More from Bob Knakal’s presentation: “Life After Rent Regulation” Parts 3 & 4 (click image to play)

Finally, a ±$1M Parking Space Sale Actually Occurs

This has been a thing in NYC but none of the spaces that were hyped either ever sold at all or never sold for close to $1M.

– 2012 The $1 million parking space – New York Post
– 2014 Buy Condo, Then Add Parking Spot for $1 Million – New York Times
– 2015 Manhattan Is Getting More $1 Million Parking Spots – Curbed
– 2015 The Race to the $1 Million Parking Spot – Wall Street Journal

In 2019, we actually saw a parking space close for $969,000 in Hong Kong.

A single, 134.5 square foot parking spot at a 73-storey office tower in the glitzy financial district has sold for $969,000, according to local media reports. That works out to just over $7,200 per square foot. By comparison, the average apartment in upscale Manhattan goes for four times less, at around $1,770, according to real estate analytics firm NeighborhoodX.

The value of Manhattan parking spaces is relational to the property they are associated with. They are not stand-alone assets. In other words, a parking space located in a building with $20 million condos sells for more than a space located in a building comprised of $300,000 apartments, all locational amenities being equal.

Getting Graphic

Len Kiefer‘s Chart Handiwork

I love the context this gives.


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

Beware The Appraiserspeak Gobblygook

A friend of mine got a copy of the appraisal that was done on a relative’s condo in a state my firm doesn’t appraise in. He just wanted to get a reality check on what was said by the appraiser. My friend said the conversation went like this:

“He also pointed to “bracketed sales” in that banks wouldn’t accept a unit at the highest end of the market, like ours, as they needed a closed sale at a higher level already.”

By definition, this appraiser is telling my friend that a condo can never be appraised higher than others in a building unless there is another closed similar sale that is higher priced. Presumably, that means that the other higher sale can’t be appraised higher unless there is another sale that is higher, and so on.

I’m not saying the appraiser didn’t know the market. But I do know that we can get caught up in what a lender requires so much that we can become detached from the valuation process itself.

Our profession has an intense duality: we can be brilliant at valuing a property but be very weak at conveying what we do to the those we interact with. It’s why I believe it would be amazing (but not possible) to require every appraiser to testify at least once in court. The person saying random BS like in this example would be skewered alive.

Jonathan Miller and Phil Crawford in Washington DC!

Phil, Lori Noble and I met in Washington to attend meetings such as ASB, IAC, AEI and a gathering of the Network (State Coalitions) that was extremely insightful in our efforts to return sanity to mortgage lending and create awareness within our industry about the opportunities with the consumer.

OFT (One Final Thought)

In some ways, all of us are burning up inside to make those changes we often don’t seem to get around to.

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 more into cotton candy tacos;
– You’ll be more interested in buying a Hamptons home;
– And I’ll think about my first apartment a little more.

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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