[In The Media] Brooklyn Market Report Coverage on NY1

Posted by Jonathan J. Miller -Friday, October 28, 2011, 10:05 AM
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We released our Brooklyn market report last week – Jill Urban of NY1 does a nice segment, interviewing Dottie Herman, President/CEO of Prudential Douglas Elliman and moi.

Wore a new tie.

[In The Media] Bloomberg Surveillance 10-24-11

Posted by Jonathan J. Miller -Tuesday, October 25, 2011, 4:26 PM
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Got a chance to speak with Tom Keene and Ken Prewitt in studio this morning where we covered a lot of ground.

The S&P Case Shiller Index was a released just as I came on the show, as well as what is driving the Brooklyn housing market, why is NYC fairing well, what ails the national housing landscape, will it have further to fall, what are the problems with relying on CSI, foreign buyers and whether Tom is looking at a kick up in his rent next year. Always fun.

Miller Samuel’s Miller Says Home Prices to Fall 5-10% (13 min) [Listen]

[In The Media] Bloomberg TV’s Fast Forward W/Lisa Murphy 9-29-11

Posted by Jonathan J. Miller -Thursday, September 29, 2011, 5:15 PM
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Had a nice conversation this afternoon with Lisa Murphy on her show Fast Forward. Always fun to do.

Low mortgage rates are not our panacea to solve the housing crisis – their use has been over played. Seriously.

Home Sellers Opt To Rental, More Product Sways Buyers To Rent

Posted by Jonathan J. Miller -Monday, September 12, 2011, 6:00 AM
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I’ve always viewed the rental market as a leading indicator for the purchase market since rentals are more reactive to changes in the economy than sales are. Rental demand is generally strong across the US right now.

Does this mean higher demand for sales is close behind? No.

The increase in rental demand is not because the economy is improving, it’s because credit is so restrictive right now and getting tighter.

The angle to the rental market story is that people who are unable to sell their home are considering renting them out until the sales market improves. What’s unique in this cycle is that higher quality homes are now on the market for rent causing people on the fence between purchase and rent to consider renting since the available product is of a higher quality.

A friend of mine just sold his big house in our town and decided to rent for a year and look for a smaller home. When he was looking for homes to rent, the market was very tight…just what homeowners want to hear.

A few weeks ago the reporter for this segment, Jeanne Yurman, called me when I was hunkered down in my town library when we lost power at home the day after Irene. Being a good reporter, she “outed” me for using the hurricane as an excuse to work from home since, as it turns out, she lives in my hometown and was perfectly able to go to work in Manhattan. LOL. We had a good laugh about that. On Friday she interviewed me for this segment a few blocks from my house.

[WSJ] Comparing Manhattan’s Housing Market After 9/11, Lehman

Posted by Jonathan J. Miller -Thursday, September 8, 2011, 2:43 PM
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[click to expand]

Here’s something I wrote over at the WSJ’s Developments blog, comparing the housing market aftermath of the two events.

Comparing Manhattan’s Housing Market After 9/11, Lehman
(New York, NY 9/8/11)

The Wall Street Journal asked me to look at the period following 9/11 and the Lehman Brothers bankruptcy in September 2008 (and the related credit crunch) to see what, if any, housing market comparisons could be made. Of course, it goes without saying — but I need to say it — that on a human scale, 9/11 is not comparable to the Lehman bankruptcy in any way.

To look at the markets following of both events, I assessed how each economic shock impacted sales activity of Manhattan co-ops and condos, which account for roughly 98% of the Manhattan single-unit residential market. I compared both event timelines by using a three-year window. I track quarterly closed sales, and they lag contract signing by an average of 45 days at that time — but you get the general idea.

One important similarity between the two periods: Both were already influenced by recessions, whether people were aware of it at the time or not.

Sept. 11: The housing market was already sliding down that slippery slope as sales activity weakened and marketing times expanded. The go-go market created by the tech boom in the preceding few years was unwinding and prices were beginning to soften, especially at the upper end of the market. Access to credit remained reasonably accessible, unlike today.

In the weeks that followed 9/11, the housing market was a virtual ghost town with little contract activity. A well-known brokerage firm issued a press release saying that prices had fallen 30% overnight, but I took issue with that claim since there were essentially no sales to measure the market — a classic mark-to-market situation. That press release was subsequently withdrawn.

When the Federal Reserve pushed rates to the floor shortly after the attack and mortgage rates fell sharply, consumers responded. We observed a surge in demand firsthand about five weeks after the attacks — the market restarted at the entry-level priced apartment segment. This was made clear to me when we were engaged by a bank to appraise the purchase of a one-bedroom apartment in the East 50s in a non-doorman building. The contract was signed after a five-way bidding war. Soon we were seeing many such bidding wars and the market began to boom from the bottom up.

Lehman: Sales activity in the housing market peaked in 2007 and prices peaked a year later in 2008. Sales activity was erratic in 2008 leading up to Lehman but the trend was clearly weakening. The slowdown actually began during the summer of 2007 when the mortgage system started to break down. When American Home Mortgage collapsed and the two Bear Stearns hedge funds famously imploded during that summer, the pace of the market began to cool. By the time Lehman went under (and Fannie Mae, Freddie Mac and AIG were bailed out at nearly the same time), the consumer and mortgage lenders went into the fetal position and waited.

Unlike the 9/11 timeline, the Manhattan housing market took nearly two years to reach levels seen in September 2008 and have not come close to peak sales levels reached in the two years prior to the credit crunch (obviously because artificial credit conditions were in place). Unlike the months following 9/11, residential mortgage credit has continued to remain unusually tight and has in fact tightened since the beginning of 2011. Hard to rally the consumer when the Fed continues to keep rates too low for banks to be incentivized to lend.

Leading up to 9/11 a lot was done to reduce oversight of commercial lending, neutering regulators and allowing investment banks step into the mortgage process. The Fed kept rates rock bottom through June 2004, fueling an unprecedented housing boom. Prices were rising so quickly in the first half of the decade that affordability waned and banks removed all underwriting standards in order to keep the pipeline full as Wall Street off-loaded the risk to investors across the globe.

Of course, it all ended badly, marked by the Lehman bankruptcy.

[Jornal da Globo] Brazil: Sao Paulo up 85%, Rio up 100%. Bubble?

Posted by Jonathan J. Miller -Saturday, August 20, 2011, 11:15 AM
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A primary news service in Brazil, Jornal da Globo, interviewed me on the housing market and I did a quick overview of the 2008 and laid out the US part of the story. If you blink you might miss me but its a balanced story and it seems to me like Brazil is in year 2006 of our cycle.

[click to see video]

The reporter told me that their economists and regulators say they are not in a bubble. However consumers have easy access to credit and there has been double digit multi-year housing growth far outpacing rental prices. That’s a housing bubble, no?

Incidentally, the day before this interview I was interviewed by a Chinese Television station with a similar story but less optimistic about the state of their market – saw it as a bubble.

Here’s a good Financial Times article on the Brazil housing market from last spring: Housing boom raises fears of Brazil bubble [subscription]

Entenda as causas do crescimento nos preços dos imóveis no Brasil [Jornal da Globo]

Understand the causes of growth in property prices in Brazil [English Translation]

[In The Media] Bloomberg TV’s ‘Fast Forward’ 7-11-2011

Posted by Jonathan J. Miller -Monday, July 11, 2011, 3:11 PM
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I had a great conversation with Lisa Murphy on her Bloomberg TV show Fast Forward (the clip labels the show as “Bottom Line”). Always fun.

Manhattan rental market key points:

• Unemployment and credit have not materially improved.
• Tight mortgage lending conditions have driven some purchase demand toward rental.
• Economic uncertainty has caused consumers to be more cautious, with some delaying their purchase decisions.
• Rents rising as landlords have removed concessions from the market.

The reports discussed are part of a series I have authored for Prudential Douglas Elliman since 1994:

Manhattan Sales 2Q 2011 [Miller Samuel]
Manhattan Rentals 2Q 2011 [Miller Samuel]

[Bloomberg Law] Five More Years Of High Foreclosure Rates

Posted by Jonathan J. Miller -Thursday, June 30, 2011, 4:27 PM
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Had a nice discussion with Lee Pacchia, Esq, at Bloomberg Law about the state of housing right now. Always fun. (Gotta love YouTube’s auto freeze frame of me with my eyes shut – what does it infer?)

[In The Media] PBS Nightly Business Report 6-22-11

Posted by Jonathan J. Miller -Thursday, June 23, 2011, 10:09 PM
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Watch the full episode. See more Nightly Business Report.

My segment begins at the 9:15 mark.

I spoke with Erika Miller (no relation but we went to the same junior high and high school!) does a solid segment on housing market’s shadow inventory (properties that are not listed for sale yet), triggered by the CoreLogic report.

RealtyTrac reports much more in the foreclosure process. CoreLogic’s takeaway is that shadow is declining but it will take 5-10 before those levels return to normal – moving in the right direction but there is a long way to go. This is also consistent with what RealtyTrac has been saying.

Exactly.

My Life Story, One Appraisal At A Time

Posted by Jonathan J. Miller -Monday, June 20, 2011, 4:27 PM
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Roland Li wrote a nice profile of moi in the current issue of Brokers Weekly. They’ve done a nice job moving the publication online.

Check it out: Jonathan Miller tells it like it is