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.
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
I did a couple of events and was interviewed for a couple more.
My favorite housing market/economic charts of the week made by others
Post by @josephpolitanoView 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:
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
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
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Reads, Listens and Visuals I Enjoyed
- Short-Term Rental Registration [NYC311]
- Real Estate Heiress Hatched Plan to Demolish Marilyn Monroe Home [The Real Deal]
- 551- Office Space — 99% Invisible — Overcast [Stitcher]
- Lease Expirations and CRE Property Performance [Boston Fed]
- The Golden Days of Buy-to-Let in the UK Are Over [Bloomberg]
- New Yorkers ❤ South Florida Office Buildings [Highest and Best]
- The Future Of The Office Is No Longer A Debate. Now What? [Bisnow]
- Visualizing Existing Home Sales [Mike DelPrete]
- The Fed Sees a Softer, Higher Landing [Apricitas Economics]
- Zombie Renovations Are Coming [Curbed]
- Why Denmark's Housing Market Works Better than Ours [Aziz Sunderji]
- The ocean is rising — and so is Miami’s skyline [VOX]
- The $100 Billion Luxury Complex That’s Sitting Empty and Unfinished [Wall Street Journal]
- Renting vs. Buying: When You Shouldn't Buy a House [A Wealth of Common Sense]
- Wildfire-prone California to consider new rules for property insurance pricing [ABC News]
- Airbnb Really Is Different Now [The Atlantic]
- NAR: Existing-Home Sales Decreased to 4.04 million SAAR in August [Calculated Risk]
- America's biggest private-equity firms are screwing over college students [Business Insider]
- Does the U.S. Risk Another Housing Market Fall? [J.P. Morgan]
- Airbnb says it's cracking down on fake listings and has removed 59,000 this year [ABC News]
- Powerball winner Edwin Castro splurges on new $47M LA mansion in latest lavish purchase after $2B win [NY Post]
- Homes in parts of the U.S. are "essentially uninsurable" due to rising climate change risks [CBS News]
- The furniture industry is on its last leg [The Hustle]
- The Truth About Buying a $1 House to Fix Up [Lifehacker]
- Mapped: The Migration of the World’s Millionaires in 2023 [Visual Capitalist]
- Does Resurgent House Price Growth Signal a Bottom in the Housing Market? [First America]
- [Terra Logic] Understanding The Value of Manhattan Apartment Outdoor Space
My New Content, Research and Mentions
- Castle Village Is a Snapshot of the Pressures on City Co-ops and Condos [Habitat Magazine]
- Fed’s Rate Decision Is Disappointing News—Even for Luxury Housing [Barron's]
- South Florida snaps streak of record home prices. Is this the beginning of a new trend? [Miami Herald]
- South Florida snaps streak of record home prices. Is this the beginning of a new trend? [Yahoo News]
- Co-ops in crisis: Financial trouble snares an Upper Manhattan community [Crain's New York]
- Fed’s Rate Decision Is Disappointing News—Even for Luxury Housing [Mansion Global]
- WSJ News Exclusive | CrossCountry Mortgage CEO Fetches $30 Million for Fort Lauderdale Home [Wall Street Journal]
- CrossCountry Mortgage CEO Fetches $30 Million for Fort Lauderdale Home [Mansion Global]
- Former Miami Heat player sells Miami Beach mansion to Royal Caribbean executive [Miami Herald]
- Empire State Of Rent: Navigating The Sky-High Costs Of NYC Living [Yahoo Finance]
- California Dreamforce, Autoworkers Strike: Your Saturday US Briefing [BNN Bloomberg]
Recently Published Elliman Market Reports
- Elliman Report: Delray Beach Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Deerfield Beach Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Coral Gables Sales 2Q 2023 [Miller Samuel]
- Elliman Report: Boca Raton 2Q 2023 [Miller Samuel]
- 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]
Appraisal Related Reads
- Industry veteran welcomes new position [Valuation Review]
- Appraisal Process Report [NAR]
- Ripple effects of months-old cyber attack continue to have major impact on homebuyers, sellers in Cincinnati [WCPO]
Extra Curricular Reads
- The new phone call etiquette: Text first and never leave a voice mail [Washington Post]
- We Are Not at War. We Are at Work. [The Atlantic]
- New York’s Hottest Steakhouse Was a Fake, Until Saturday Night [NY Times]
- FOUND: lunch with an old friend [Found NY]
- Historians race to find Great Lakes shipwrecks before quagga mussels destroy the sites [AP News]
- FOUND: cheat codes [Found NYC]
- What Spain’s Women Lost [NY Times]
- Exclusive: Oscar Mayer reintroduces Wienermobile to the road [ABC News]
- Today’s Kindergartners May Never Have to Fill Out a Scantron [The Atlantic]