French Fry Situational Awareness In Your Home

Forget the ketchup. You don’t need it. As an appraiser and a housing analyst, I’ve long believed that it is better to focus on the key metrics.

About that Ketchup: “A tablespoon-size serving has four grams of sugar, which is more sugar than a typical chocolate chip cookie. And how many kids actually limit their serving size to one tablespoon?”

C’mon, people, focus on those French fries (including all you housing nerds)…

But I digress…

Elliman Report Released: August 2019 – Manhattan, Brooklyn & Queens Rentals

This week Douglas Elliman real estate published our research and analysis of the rental market in their Elliman Report: 8-2019 Manhattan, Brooklyn & Queens Rentals, part of the expanding Elliman Report series I’ve been authoring since 1994.

First, we need to start off with a very cool Bloomberg chart used in their report coverage.

Elliman Report: 8-2019 Manhattan, Brooklyn & Queens Rentals


“All three price trend indicators rose above the year-ago result for the third straight month as concessions continued to slip.”

– Rental price growth moved higher across all bedroom sizes and market segments
– The market share of concessions declined annually for the seventh time in eight months
– Year over year median rent growth was flat above $10,000 and declined above $15,000
– The luxury entry threshold hasn’t seen a year over year decline in 2019
– New development median rent was essentially flat as existing median rents rose sharply


“Price trends continued to set new records despite each month in 2019 saw a year over year drop in concession market share.”

– New development concession market share remained double that of existing rentals
– Studio median sales price reached a new record
– Net effective median rent rose year over year for the ninth straight month


“Price trends continued to weaken despite the sliding market share of landlord concessions.”

– The market share of landlord concessions fell year over year for the fifth time in six months
– Net effective median rent fell annually this month for the third time in 2019
– Median rental price has fell year over year for studios and 1-bedrooms while rising for larger apartments

New York Times Coverage of Unsold Manhattan Luxury Units

I saw this article a few minutes before I was locking down this week’s Housing Notes. It contained comprehensive research on the state of Manhattan new development luxury units was just published by the New York Times: One in Four of New York’s New Luxury Apartments Is Unsold

Their chart includes our stats on Billionaires’ Row below:

Manhattan Months of Supply

I view the “months of supply” metric as the “pace” of the market, in other words, how fast the market is moving by price strata as illustrated by the intersection of supply and demand. I used to call it “absorption” but that was being confused with the same term used for the sales pace of new development.

Et Tu, Penthouse?

There was a good Mansion Global article on penthouses: For a Safer Bet in a Tough Luxury Market, Consider the Penthouse. I know it is in bad taste to self-quote but it is my key rationale on the topic of penthouses (and who says I have good taste?).

“What makes a true penthouse is that it’s unique,” said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel. “Apartments that are unique tend to be less volatile.”

“It’s the principle of scarcity, to use appraisal speak,” he said. “It doesn’t prevent [a penthouse] from seeing declines or challenges; they’re not immune to negative market trends.”

“We’re talking about probabilities rather than guarantees, having a unique asset—in a favorable way—reduces risk,” Mr. Miller said.

The following chart essentially illustrates the proliferation of penthouses in the super-luxury new development market.

Hedgefunder Ken Griffin Needs a New Hobby

Another day, another super expensive single-unit residence. This one was recorded for $99 million. The Shiny Sheet scoops it: EXCLUSIVE: Ken Griffin squares off massive Palm Beach estate with $99M house buy, sources say.

Here’s a table of all the sales I know of in Palm Beach Florida above $50M. The blue highlighted sales are from 2017 to 2019.

What A Large Swath of Detroit Looks Like Today

When a city’s population collapses, and the abandoned buildings are torn down, this is what you get.


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

Testifying Always Means Eating Your Lunch Alone

Appraisers Blogs, an important reference for all appraisers, turned my comments on testifying as an appraiser in last week’s Housing Notes into a blog post. It inspired me to share a photo.

During my recent all-day testimony at a trial as an expert, the judge reminded us as we broke for lunch that I could not talk to counsel about the case. So I left for lunch with my client and his lawyers and sat away from them at the restaurant – because we all took the judge’s order very seriously. I asked someone to snap a photo to prove my dining-alone experience in the same restaurant – my smile reflected the fact I had the entire bread basket to myself:

With the continued erosion of the appraiser’s independence in the mortgage process, I encourage all appraisers to work very hard to develop outside consulting work NOW. With the incoming acceptance of evaluations in mortgage-related work championed by the Appraisal Institute, your competition will be tv-repairman and dog-groomers (no offense to those professions). This applies to commercial too, not just residential valuation – which will likely see significant fee compression in the future if that’s even possible.

OFT (One Final Thought)

I love NYU Professor Galloway’s “placing a toe on a (Toyota) Camry” analogy! When an owner extracts $700M from a company that is supposedly disrupting commercial leasing and has never made a profit and has a lot if self-dealing in place, eventually the problems gets articulated in public. A $50-$60 IPO was downgraded to $20B and the final amount is speculated to be even less than that or be killed off.

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 rent;
– You’ll eat more condiment-free fries;
– And I’ll break bread alone more often.

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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