The Housing Market Did Not Fall Like Dominoes From COVID

One of the benefits of quarantine has been the sheer brilliance of innovation by our youth. I regret not coming up with this innovation when I lived in the dorms. Sign.

But I digress…

The New York City Rental Market is Weak and Getting Weaker

Douglas Elliman Real Estate published our August rental market analysis this week and the news wasn’t great. I’ve been the author of this expanding Elliman Report series since 1994.

Elliman Report: August 2020 Manhattan, Brooklyn & Queens Rentals

This rental report covered the second full month since the lockdown expired on June 22 and interest in the findings was intense. The Bloomberg story was the most emailed article yesterday by the 350K Bloomberg Terminal subscribers.

Now this is a chart…(using Crocodile Dundee’s voice for “now this is a knife.”)

The takeaway from the report is that this was a record month of records and it stems largely from the drop in would-be tenants that moved to other boroughs or out of the city, mostly Manhattan, to rent or buy in the suburbs or second home markets.


“With a nominal month over month uptick in new lease signings, activity appeared to bottom in last month.”

– The largest market share of landlord concessions in nearly a decade of tracking
– Highest total of listing inventory in over fourteen years and third straight monthly record
– The vacancy rate exceeds five percent for the first time and the fourth consecutive month with a new record
– Most substantial year over year decline in studio and 1-bedroom median price in eight years of tracking
– Existing and new development median rent fell annually for the third time in four months
– While all price segments covered, saw declines, more significant reductions occurred in the lower price strata
– Concessions market share for non-luxury rentals was above luxury rentals and rose to their highest level since 2015


“Listing inventory doubled from its year-ago level despite the moderate decline in the number of new leases.”

– Listing inventory reached an eleven and a half year high for the second straight month
– Net effective median rent fell year over year for the second consecutive month after nineteen months of gains
– Three out of four new development new signed leases had a landlord concession

[Northwest Region]

“Listing inventory rose to its second-highest level recorded as new leasing activity fell for the thirteenth straight month.”

– Thirteenth consecutive year over year decline in new leases with second-highest inventory total recorded
– The fourth straight annual decline in net effective rent
– The most significant yearly surge in listing inventory in four and a half years

NBC News 4 New York Covered The Softening Rental Market Conditions

@Glorioso4NY gets the rental market nuances in his segment on the report:

The New York Times Corrected The Narrative On NYC’s Outbound Migration

In this coming weekend’s New York Times real estate cover story, In New Development, Buyers Favor the Boroughs – Yes, some buyers are leaving Manhattan. But others are doubling down on Brooklyn and Queens.

The article includes a cool research piece on new development contract activity.

And the following thread provides a nice summary of what is actually happening and accurately tags me as the “OG appraiser” so there’s that.

Upcoming Speaking Events

What’s In Store For New York City Real Estate in 2020 and Beyond!

I’m joining my friend and co-data nerd Noah Rosenblatt of Urban Digs for a live 1 on 1 discussion moderated by John Walkup, also of Urban Digs.

Urbandigs is a great resource and I love to connect with these guys. Register and mark your calendar for September 17th at 11 am!

[click on image to register]


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

The Appraisal Foundation Is Pivoting Its Alliances To Maintain Relevancy

These are my observations from The Appraisal Foundation’s perspective on how the unthinkable simply happens in this progression:

– For years: “The Appraisal Institute is worse than the devil” and “We have enjoyed a long partnering relationship with The Appraisal Subcommittee.”

– Recent history: “The Appraisal Subcommittee has no oversight rights and will not be allowed to speak at our meetings” (While the ASC continues to work with the Appraisal Institute.)

– Latest history: While scrambling…”The Appraisal Institute is an organization we can work with to solve our respective complete lack of diversities.” Given the vitriol exchanged between AI CEO Jim Amorin and TAF President Dave Bunton, this seems absolutely impossible and to most of the people I interact within their circles, the only end to this Hatfields & McCoys type feud is when both of these people exit their organizations. It’s deeply personal.

So that’s why I am scratching my head about this and believe it is happening because TAF is currently all alone and needs to align with another organization to maintain its relevancy.

OFT (One Final Thought)

September 11, 2001.

Never Forget.

Here is some of what I remember on that day when I saw the towers burn in person…

On the street level outside our office buildings on September 11, 2001, all the appliance stores had their TVs in the windows switched to CNN which was zoomed in on the gaping holes in the towers. My office was on West 45th Street in Manhattan’s Midtown central business district. I walked west to the end of my block towards Avenue of the Americas and then walked east towards Fifth Avenue. From both vantage points, I could see that the twin towers were clearly on fire. Numb, I went back to my office to close up and send everyone home. My wife called me crying that now there was only one tower left, the other had just fallen. I was getting emails from colleagues in other parts of the world asking if I was still alive. I often think of the times I went to the Windows on the World restaurant at the top, buying an ice cream cone at Ben & Jerry’s in the ground floor mall after an appraisal in Battery Park City, a visit with colleagues at a law firm or other meetings. All of that was obliterated.

Here are a few photos from that time taken by myself, my staff, and my friends. This was not the Instagram world we have now and taking pictures wasn’t quite the obsession it is now, but you get the picture.

Brilliant Idea #1

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– They’ll never forget;
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– And I’ll never forget.

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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