Cranking The Housing Market Up To Eleven

Because I endeavor to show you how the sausage is made, and participants are currently struggling with low transactions volume and low vegetables, here’s how to crank it up…


Did you miss last Friday’s Housing Notes?

September 15, 2023: Manhattan Record Rents Stayed Flat After Extreme Ironing Month Over Month

But I digress…

Existing Listing Inventory Remains Historically Low

According to NAR, listing inventory remains incredibly low, and August is usually the year’s peak month. However, the amount is nominally different than the other months of the year. Using NAR’s monthly emails since 1999, I came up with this.

One other insight: Manhattan inventory for August is the seasonal low of every year, and the patterns are magnified.

Mike DelPrete whipped up some visualizations on existing home sales and listing inventory. Subscribe to his newsletter.

Calculated Risk also has a thorough analysis on the existing inventory and existing sales situation.

Urban Digs Webinar: Valuing Outdoor Space

This webinar was held earlier this week with several hundred people in attendance.

Noah and John at Urban Digs invited me to talk about my approach to valuing outdoor space in NYC. I documented it back on May 5, 2010, after years of getting calls from real estate agents asking how to value them: [Terra Logic] Understanding The Value of Manhattan Apartment Outdoor Space. For other “How to” valuation discussions, please go here: “How to Value” and Other Favorite Posts

It goes for quite a premium, and its relationship has changed over the years, but my methodology remains sound. Urbandigs looks at it differently, but it apparently comes out the same in the wash. I love these guys.

Check back here for the video shortly – it wasn’t available when publishing but should be momentarily will be shared next week!

Ratewatch: 2024 is Sliding Into 2025

The residential real estate economy’s anxious eyes seem fully trained on the notion that rate cuts might happen in mid to late 2024. While we continue to see signs of weakness in an otherwise robust economy, It seems fantastical to contemplate Fed cuts with unemployment currently at 3.8%. I’m not a trained economist, but the industry doesn’t have a good track record on this topic either.

I’ve been enjoying this substack lately Apricitas Economics on the topic.

The recurring theme seems to be that rates will remain higher for longer.

I also did a little pontificating for Mansion Global – Fed’s Rate Decision Is Disappointing News—Even for Luxury Housing.

Miami-Dade Housing Price Growth Take A Breather

The Miami Herald reported that the median price of Miami-Dade single family housing prices slipped month over month for the first time since last December.

I said this in the piece:

“This shows the market taking a breath. That’s certainly helpful to buyers, but it doesn’t mean prices will correct year over year,” said Jonathan Miller, CEO of Miller Samuel real estate consultancy. “The next couple of months we don’t know if this is an outlier or the beginning of a pattern. It is too soon to tell.”

My concern about most Florida markets is that the listing inventory is 50% to 60% below pre-pandemic levels, resulting in unusual bidding wars. Here’s a look at the market share of bidding wars for Miami in the most recently completed quarter.

There was an interesting post by First American’s Chief Economist Marc Fleming: Does Resurgent House Price Growth Signal a Bottom in the Housing Market?

House price movements vary by market, but it’s clear that house price growth in many markets has resumed. In fact, nominal house prices increased on a month-over-month basis in 43 of the top 50 markets we track in May. While many expected that a higher mortgage rate environment would prompt house prices to adjust downward, the lack of housing inventory amid a resilient economy is keeping a floor on how low prices can go. Of course, these dynamics vary dramatically by market.

This matrix places Miami in the “Boom-No Bust” quadrant.

The Florida housing market is holding up better than most of the country, in part, because of the prevalence of cash buyers, who are not deterred by rising mortgage rates, making demand more resilient.

Manhattan Monthly Maintenance Surges After The Pandemic Era

Inflation hits co-ops while the unit mix for condos skews bigger, causing the monthly numbers to surge. Crains featured a deep dive on this topic: Co-ops in crisis: Financial trouble snares an Upper Manhattan community. It’s a great read.

The piece referenced the numbers we track each quarter. Our research is based on transactions, not the entire housing stock.

Sage Advice Giver, Dan Gershburg, NYC Closing Attorney

My friend Dan of Konner Gershburg Melnick Darouvar comes clean about his Amazon lights and how to think of the fall market (using hand signals). Additional props to any law firm without an ampersand in its title. Also, I’m working on a data metric thing with Dan’s firm to be shared here in the coming months.

Highest & Best Newsletter: New Yorkers ❤ South Florida Office Buildings

I continue to love this new Florida newsletter: Highest & Best from Oshrat Carmiel, formerly of Bloomberg News…The content focus connects New York and Florida.

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.

Highest & Best: New Yorkers ❤ South Florida Office Buildings

Dinner With Nora in West Palm Beach

H&H Bagels! A NYC staple, opens in West Palm Beach.

Fun House: 50% Stonehenge, 50% Flying Saucer

Zillowaire_max is a good follow on Instagram. He confirms 1961 Was Peak Conversation Pit.

Speaking Events

I did a couple of events and was interviewed for a couple more.

Video shared above

Getting Graphic

My favorite housing market/economic charts of the week made by others

Post by @josephpolitano
View on Threads

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 Cincy Rappatoni Scandal Continues

Rappatoni has been ready for the Cincy MLS to turn it back on like the rest of their MLS customers for a few weeks, including San Francisco. Still, Board members are financially connected with Perchwell and want everyone to sit on their hands for three weeks to get Perchwell going. Am I missing something?

The bad news for Cincy agents and appraisers is growing, and the board has been spinning this story hard:

Ripple effects of months-old cyber attack continue to have major impact on homebuyers, sellers in Cincinnati

1,000 Realtor-members signed a petition to return to Rapattoni services as a primary listing service among complaints aimed at Perchwell listing services

The reality is that I’m told the board could turn back on Rappatoni today and finish the development of Perchwell until it is ready. Instead, they continue to freeze the market.

Please take a critical look at the self-dealing by the board.

Fannie Mae Continues Their Effort To Get Rid Of Appraisers: Sends “Tips”

For the past year, Fannie Mae has sent unsigned complaints to state appraisal boards; when they see something they don’t like, they write it up and send it to the state. In their recent newsletter, this effort is called “Tips.” They emphasize they are not automated:

LQC reviews are not automated. Our expert analysts
validate the appraisal results by asking questions
like “Do the comparable sale selections make
sense?”, “Is the data accurate?”, “Did the appraiser
make appropriate adjustments?” and “Are we
getting the most probable value?” in context of a
comprehensive database of property characteristics
and market transactions.

Yet because these “tips” are not signed and the reviewer is not identified, there is no accountability to the reviewer. I always thought the accused could face their accuser in a court of law in America. Fannie Mae plays havoc with appraisers’ livelihood and infers that the reviewer is perfect in every one of their reviews.

This is incredibly unethical on the GSE’s part and speaks to the absolute lack of respect for the last person in the home-buying process that stands in the way of a transaction.

Fannie Mae Continues Their Effort To Get Rid Of Appraisers: Property Data Collector
Independence Requirements

As this property data collector thing moves along, there continues to be no legitimate reason for Fannie Mae’s motivation to push this so hard other than they want the valuation process fully automated and can pay $25 for an untrained inspector to view a home. It shows a fundamental lack of understanding of what appraisers do. Fannie Mae sees the appraisal process as “inspection + value.” Yet, the idea of sitting at the desk and relying on some stranger to gather the nuances of the property to generate a value is wildly flawed.

Fannie Mae culture has always believed they can do everything independently with their numbers. Still, they are diluting the quality of those very same numbers by allowing random people to collect on-site information. It’s insane, actually.

Now take a look at NAR’s Appraisal Process Report: Notice anything missing?

Lawrence Yun, Ph.D., Chief Economist and Senior Vice President
Jessica Lautz, Dr.RealEst., Deputy Chief Economist and Vice President of Research
Meredith Dunn, Research Manager
Sidnee Holmes, Research Associate
Brandi Snowden, Director, Member and Consumer Survey Research

How about some appraisers? There is a real estate appraiser section with some of the brightest appraisal minds in the industry, and yet…no contribution to this report about property data collectors. I’m only making the point that appraisers seem to be the last people asked when looking at the appraisal process by virtually every institution that does so. Perhaps that’s by design, in this case, to make the results more compelling.

Here’s the last item on the executive summary:

According to the survey responses, the majority of participants (76%) perceive the quality of property data collected by data collectors to be lower than that collected by appraisers themselves. Conversely, 23% of respondents believe that the quality of data collected by data collectors is comparable to that of appraisers.

OFT (One Final Thought)

Spelling “Business” is really tough…wait for it.

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons at 2 p.m.) 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 crank it up to 11;
– You’ll get loud;
– And I’ll upgrade my spellchecker.

Brilliant Idea #2

You’re clearly full of insights and ideas as a reader of these Housing Notes. Please share them with me early and often. I appreciate every email I receive, as it helps me craft the following week’s Housing Note.

See you next week!

Jonathan J. Miller, CRE, Member of RAC
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog

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