Let’s iron this market out.
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Did you miss last Friday’s Housing Notes?
September 8, 2023: Housing This Question All Day Long: What Do You Pay For Rent?
But I digress…
The NYC Rental Market Is Topping Out
I’ve been the author of an expanding series of market studies for U.S. real estate firm Douglas Elliman since 1994. The rental report series has been tracking the significant rollercoaster of the pandemic era.
Elliman Report: August 2023 Manhattan, Brooklyn & Queens Rentals
Bloomberg presented a cool chart in their coverage and I’ll throw in a lot of our own further down the page.
MANHATTAN RENTAL MARKET HIGHLIGHTS
“Average rental prices and net effective average rental prices reached new highs.”
– Median and net effective median rental prices remained at all-time highs for the fifth time in six months
– Listing inventory declined year over year for the first time in ten months
– The number of new lease signings fell annually for the second consecutive month
– Doorman new lease signings were slightly below pre-pandemic levels, while those of non-doorman buildings were substantially lower
– New lease signings for new development rentals rose annually as those in existing buildings fell sharply
– Luxury listing inventory declined year over year for the third time in four months
– Luxury median sales price rose annually for the sixth consecutive month
BROOKLYN RENTAL MARKET HIGHLIGHTS
“Average rent per square foot and average rental prices set new records.”
– Average rental price rose annually to a new high as median rent increased to the second-highest on record
– New lease signings declined annually for the fourth time in five months
– Listing inventory dropped by more than half year over year and well below pre-pandemic levels
QUEENS RENTAL MARKET HIGHLIGHTS
– All price trend indicators surged annually to reach record highs
– New lease signings declined year over year sharply for the fifth time
– Listing inventory dropped by more than half year over year and well below pre-pandemic levels
Bloomberg TV – Thoughts On The NYC Housing Market 22 Years After
It’s hard to believe 22 years have passed by already since that awful day. I remember it vividly but still marvel at how quickly and powerfully the city recovered. My interview begins at about 1 hour, 55 minutes.
NYT – U.S. Housing Price Gains Highest At The Top Since 2000
Even before the pandemic era began, there had been faster price growth at the higher end of the housing market. The Calculator column in the New York Times uses CoreLogic data to prove the point in this great graphic.
$250 Million Was A Nice Even Number: Aspirational Pricing Seems Over
The $250 million listing at Central Park Tower in Manhattan saw a 22% price cut because it hasn’t sold. The original price was probably a strategic move for the developer to capture marketing eyeballs with an asking price that would exceed the Manhattan $238 million record if successful. Those up on these things knew that the initial price was “dead man walking” since the rest of the building sees the sponsor starting at 25% to 30% below the offering plan price before sitting down at the bargaining table. I do not believe buyers in this space would fall for this type of marketing – there’s too much transparency.
That LA development palatial mansion site that was asking $250 million for years has been repriced at $68 million. The important takeaway here is that the pricing was the marketing and had no bearing on the value itself. The problem was that these sellers all were drinking the Kool-Aid, and eventually, as more property owners drank it, this “safety in numbers” effect became the perceived value.
The Proliferation of Private Pools In NYC
Curbed pens a great piece on public pools New York City’s 15,000 (and Counting) Private Pools
The city of New York, on the other hand, has opened a total of five new public pools in the last fifty years. Over the same period, developers have built at least 434.
Highest & Best Newsletter: Dolce & Gabbana is Now a Condo in Miami
I continue to love this new Florida newsletter: Highest & Best from Oshrat Carmiel, formerly of Bloomberg News… Whether it’s Beehive, Substack, or something more homegrown, it’s got me thinking about the next steps for Housing Notes, so I will continue to follow along.
The best reference ever made for a new condo tower “Miami’s 888 Brickell, planned to rise to 1,049 feet, would be the highest allowed in the city by the Federal Aviation Administration.”
And wow – now that’s a bathroom…
Narrowest House In Manhattan
This house at 75 1/2 Bedford Street is only ~8.1 feet wide inside (9.5 wide outside) and was built in the neighbors driveway in 1873 during a housing boom. Every time this gets sold, its receives a lot of media love due to its history and narrowness. Years ago we appraised an 11′ wide townhouse on East 64th Street on the Upper East Side and for some reason, they installed an elevator which essentially took all the usable space from the half of each floor. You can’t really appreciate the narrowness of this home until you walk by it.
Super Luxury Sales Levels Normalizing After Heady Pandemic-Era Boom
Mansion Global covered the release of Knight Frank’s “Super-Prime” report which said that
In the 12 cities monitored by the agency, super-prime sales—defined as US$10 million and above—were down 11% quarter over quarter between April and June, the data showed. Annually, deals dropped 13%.
I track U.S. sales at or above the $50 million sales level, and transactions are returning to pre-pandemic levels if we forecast 2023 with approximately 25 sales when the dust settles on New Year’s Eve.
Tuesday September 19th 11am ET – Next week Noah & John of Urban Digs host a conversation about outdoor space with me. Is it a coincidence that this event happens to fall on Talk Like A Pirate Day? Aye.
My favorite housing market/economic charts of the week made by us
My favorite housing market/economic charts of the week made by others
Kastle card swipe data charts
Remember that Kastle charts are overstating occupancy* because their pre-pandemic occupancy benchmark was 100% which is simply incorrect (*measures card swipe activity as a proxy for occupancy).
My favorite random charts of the week made by others
The Rappattoni MLS Has Not Been Switched Back On In Cincinnati
For those that missed this, Rappattoni was subjected to a ransomware attack this summer but has restored service to their entire MLS network. That should be the end of the story. Now the real estate industry should be thinking about system redundancy so that the clients of these systems have a back up plan when a system goes down. The livelihood of real estate agents and real estate appraisers depend on it. Given the nature of evolving technology, more and more MLS systems will be exposed to nefarious attacks in the future.
The Cincinnati Area Board of Realtors has decided to extend the pain to their members by taking the opportunity to switch to a new software provider, Perchwell, which will not be ready for another 2-3 weeks. I’m not sure of the logic here. The board’s responsibility to its members is to get back online immediately so their members can make a living. I’m told Rappattoni is ready to go. The board is just trying to do a hybrid program with Perchwell. In reality, the Board should be pushing a mad scramble to restore the original service, like all the other regions that use Rappattoni, did.
The Board has not been transparent about making the decision to switch software but did say the data has no “integrity.” Which is it? Does the data lack integrity and that is the reason for the switch? Or is it because the Board likes the Perchwell software and are using the time as the opportunity to make the switch while badmouthing Rappatoni?
Wow – whoever advises their PR, gets a fail.
Phil Crawford’s Voice of Appraisal Podcast Talks Crisis In Cincy
The website summary…
The Cincinnati real estate market is in crisis as the damage from the Rappattoni cyber-attack continues. The Cincinnati Area Board of Realtors are stuck between a rock and a hard place as they push to replace the Rappattoni system with a new software called Perchwell. Emotions are running high in the Queen City and appraisal delays are coming if something doesn’t change quickly! Appraisal quality will be questioned for months and possibly years by the GSE’s! These are tough days for all involved. Let’s get through it!
OFT (One Final Thought)
A tenant’s NSFW plan to keep rent down…
Brilliant Idea #1
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– They’ll iron it out;
– You’ll take up extreme ironing;
– And I’ll see if the rent stops rising.
Brilliant Idea #2
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See you next week!
Reads, Listens and Visuals I Enjoyed
- Renting vs. Owning a Home, by State [Flowing Data]
- Bankrupt Mohamed Hadid's 'jewel' home sees near $200m price cut [Daily Mail]
- How Much Value Is Your Home Accruing? It Depends on What It Cost. [NY Times]
- How Condo Inventory Loans Keep Condo Projects Afloat [The Real Deal]
- Uber-Luxury Sales Fall Globally, but Remain Above Pre-Pandemic Levels [Mansion Global]
- Luxury Apartment Glut in South Florida Offers Some Price Relief [Wall Street Journal]
- Another Labor Day Came And Went Without A Spike In Office Occupancy [Bisnow]
- Wealthy Homeowners in Florida Are Facing Sky-High Insurance Premiums to Protect Their Waterfront Properties [Robb Report]
- New York City’s 15,000 (and Counting) Private Pools [Curbed]
- ‘Brady Bunch’ House Sells for 42 Percent Under Asking Price [Hollywood Reporter]
- Can a £25 Million London Palace Sell on Instagram, or Is Caché King? [Bloomberg]
- An Important Shift in Fed Officials’ Rate Stance Is Under Way [Wall Street Journal]
- Are You a Guppie? Bleak Housing Market Spawns Sad Version of ‘80s Yuppies [The Messenger]
- Just Kidding About Affording a Home [NY Magazine]
- Apartments are getting built at a record clip — it’s too bad they aren’t the right kind [The Hustle]
My New Content, Research and Mentions
- Dolce & Gabbana is Now a Condo in Miami [Highest & Best]
- Average Manhattan rent remains over $5,500 a month [Fox 5 NY]
- New York City Rents Are Through the Roof [The Real Deal]
- Cliffhanger: The Bloomberg Open, Americas Edition [Bloomberg]
- NYC Billionaires’ Row Penthouse Cuts Its $250 Million Price Tag [Bloomberg]
- Manhattan monthly median rent still at all-time high of around $4,400 [The News International]
- Manhattan rents plateau after reaching record highs earlier this year [Daily Mail]
- NYC rents at record-high levels in August, but runaway increases appear to be slowing down [Daily News]
- More tenants chose to renew in August as rents for new leases in NYC hit record highs [Brick Underground]
- Rents hit record highs again, but the end seems to be in sight [Crain's New York]
- Manhattan median rent remains at record high of nearly $4,400 a month [CNBC]
- Housing remains key component to bringing inflation down [Yahoo Finance]
- Manhattan Rental Market ‘Topping Out’ as Prices Hover at Records [Bloomberg]
- Bloomberg Markets: The Close 09/11/2023 [Bloomberg]
- Supply Shortage Chokes Manhattan, Brooklyn Resi Markets [The Real Deal]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 8-2023 [Miller Samuel]
- Elliman Report: California New Signed Contracts 8-2023 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 8-2023 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 8-2023 [Miller Samuel]
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 7-2023 [Miller Samuel]
- Elliman Report: California New Signed Contracts 7-2023 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 7-2023 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 7-2023 [Miller Samuel]
- Elliman Report: San Diego County Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Orange County Sales 2Q 2023 [Miller Samuel]
Appraisal Related Reads
- Appraisal Institute launches online program for aspiring veteran, minority appraisers [Housingwire]
- Appraisal Process Report [NAR]
- Is it 2007 again in the housing market? [Sacramento Appraisal Blog]
- Stellar MLS Partners with the Appraisal Institute to Launch Their Online Program for Aspiring Appraisers – Practical Applications of Real Estate Appraisal (AI PAREA)
Extra Curricular Reads
- New Year's resolutions [Found NY]
- Do Not Underestimate the To-Do List [The Atlantic]
- The 2023 Fall Foliage Prediction Map [Kottke]
- FOUND: eggs & caviar [Found NY]
- Construction Workers Plow a Shortcut Through the Great Wall of China [Smithsonian Magazine]
- Twinkies and Jam to Mix as Smucker Buys Hostess for $5.6 Billion [NY Times
- All of the 8,291 License Plates in America [Kottke]
- Twitter appears to throttle New York Times [Semafor]