Posted by Jonathan J. Miller -Wednesday, May 16, 2012, 3:47 PM
It’s time to share my Three Cents Worth on Curbed NY, at the intersection of neighborhood and real estate in the capitol of the world. And I’m simply here to take measurements.
Read today’s 3CW post on Curbed New York:
Since the Euro is creaking under the prevailing sentiment that Greece will flee, I thought it would be interesting to take a look at how Manhattan looks from Europe and the UK’s perspective. I threw in Canada and Australia for good measure. I applied their currencies against the US dollar and the Manhattan inflation adjusted average sales price (dark blue line)…
[click to expand]
Posted by Jonathan J. Miller -Tuesday, May 15, 2012, 1:16 PM
About five years ago, The New York Observer started a publicity campaign called The Power 100 where they selected 100 notables in New York Real Estate circles, put them on a list and threw a party to build loyalty and hopefully attract advertisers. It was a fun thing to be a part of. It wasn’t scientific and it wasn’t a serious endeavor nor was it taken seriously. It was just fun and created appreciation from those selected.
I was part of the list in three of it’s first four years. Myself and many others blogged about it. The effort got a lot of attention for NYO which was the intent.
I’ve always liked and respected the reporters there (still do) and I love the flagship NYO publication. I’ve subscribed for years and have been a regular source of market information for the publication.
However this year the publisher changed the methodology by switching it to their other publication The Commercial Observer and excluded media types and most residential types unless you owned a brokerage or sold a few apartments north of $20M.
Of course I’m down with that.
However I didn’t expect the publication to be mean about it. (Not to be confused with snark.) The Commercial Observer published a list of who was cast off (your’s truly) without disclosing the methodology change.
Imagine your kid applying to college but they don’t get accepted – only the college decides to publish their name in a list with all those who weren’t accepted?
I think the “Out” list is just as interesting as the “In” list – here’s a sample.
- Bill Ackman – Pershing Square Capital
- Serena Boardman – Sotheby’s
- Timothy Dolan – Archbishop, RC Church of NY.
- Steve Cuozzo – New York Post
- Si Newhouse – Conde Nast
- Howard Rubenstein – Rubenstein Communications
- Steven Rubenstein – Rubenstein Communications
- Sheldon Silver – Speaker NYS Assembly
- Lockhart Steele – Curbed Network
- Jay Walder – MTA
I’m going to start a new list “The Tepid 25″ since the word “Power” is a bit obnoxious.
Ok, enough of this drivel already. Back to work.
UPDATE: Here’s the response (tweet) to my post although they neglected to include my link and changed the topic – the social media person at TCO treated this as opportunity to expand the conversation thread rather than addressing the issue of right versus wrong. In media relations this technique is called “reframing the conversation” since my post was addressing how they mocked people being removed as being “Out” in a fit of self-importance, although many are sources for the publication and have been long time friends of it. When you don’t disclose your methodology you can’t do what they did. It’s simply wrong. No, it’s mean.
So here’s a lesson on what not to do on Twitter when your actions are challenged:
CO: Dear @jonathanmiller, you provide your list of the 100 Most Powerful, we’ll publish in our pages 2 weeks from now. Sincerely, The CO #co100
JM: @commercial_nyo yes I’m sure you would. #disconnect
CO: Weak RT @jonathanmiller @commercial_nyo yes I’m sure you would. #disconnect
We just got invites to attend the Power 100 party, presumably to celebrate our touted removal from the list. Really? JS needs a sit-down.
Posted by Jonathan J. Miller -Sunday, April 22, 2012, 11:15 AM
Well I’ve locked myself in my office for the past few days placing the finishing touches on the upcoming week’s (Thursday) housing market reports for Long Island and Hamptons/North Fork but noticed about 500 new followers on my twitter account.
Business Insider, the giant blog aggregator with an online newsroom, placed me on their “The 101 Finance People You Have To Follow On Twitter“
The only name noticeably absent (has to be an oversight!) is my friend Barry Ritholtz who is a twitter content machine, known to wear Ted Baxter ties.
Very cool to be on the list with the very people I already love to follow. Thanks @BusinessInsider!
Posted by Jonathan J. Miller -Monday, April 16, 2012, 12:01 AM
[click to expand]
I’ll be speaking with Bloomberg’s Ken Prewitt and Tom Keene on Bloomberg Radio’s “Bloomberg Surveillance.” on Monday morning at 9am. We released our rental market report last week and we’ll be speaking about the relationship between the sales and rental market and the disparity between current peak and the last peak: credit policy between those two periods were polar opposites:
4Q 2006: Manhattan Rental Market sets a 20-year (the length of my data series) record high. Credit standards were essentially non-existent by that time in the housing boom causing prices to rise so rapidly that the lack affordability ultimately pushed buyers into the rental market.
1Q 2012: Current credit standards for mortgage lending are so tight that many potential buyers are forced to rent, competing with the existing rental pool and forcing rents to rise – they are currently just 5% short of the 4Q 2006 record.
- [Tight Credit] 1Q 2012 Manhattan Rental Report [Miller Samuel]
- Manhattan Rental Market Charts [Miller Samuel]
- Ken Prewitt and Tom Keene on Bloomberg Radio’s “Bloomberg Surveillance. [Bloomberg]
Posted by Jonathan J. Miller -Monday, April 9, 2012, 12:03 PM
New York Magazine does a really great job taking a visual approach to how I look at value by changes in floor level and views in Manhattan high-rises. I selected 301 West 57th Street (here are some view photos from a random listing in building) for the analysis since it has views of Central Park to the northeast, and it is a typical 1980’s development with (nearly) continuous unit lines from bottom to top. New development in the last decade abandoned that design approach by shifting towards larger units on higher floors.
Love how it turned out. Enjoy!
[Source: New York Magazine]
Posted by Jonathan J. Miller -Thursday, April 5, 2012, 2:02 PM
[click to open press release]
One of my issues with existing national price indices (I have many) has been that they reflect what happened after the fact. That in and of it self is not a bad thing at all. The problem concerns their use by the consumer and media. They rely on them and often have no idea of the severity of the trend lag (as much as 6 months). This lag is interpreted as the current market and then they proceed to mischaracterize or misunderstand what’s actually happening in housing right now.
Jed Kolko, the Trulia’s chief economist has come up with what looks to be a much better way to look at the direction of housing prices by following list price trends which lead home price trends by several months. He’s also created The Trulia Rent Monitor which addresses the same issues on the rental market. Both reports are based on what Trulia does well, aggregating and managing listing information by the boatload.
Trulia Price and Rent Monitors – March 2012 Download
The Trulia Price and Rent Monitors rely on the latest asking price or rent rather than the original to better track the direction of the market. Prices on MOM, QOQ and YOY on based on a 3 month moving average. Here’s the nitty gritty. Love the “technical” and “non-technical” FAQ notes detailing how it works. Jed is very clear that this is not a way to “game” the existing indices like Case Shiller and predict them in advance of their release (aka accurately predict what a 4-6 month old index result will be tomorrow) which serves an entirely different purpose I suppose.
I thought it was particularly interesting that some speculative and depressed markets are showing the most upside swing – i.e. Detroit, Miami, Phoenix. CA still weak throughout. The NYC metro results are consistent with what we are seeing throughout the region, prices down 3.3% YOY and rents are up 6.2% YOY.
From the press release, the Trulia Price Monitor for March 2012 shows:
- Asking prices up 1.4% quarter-over-quarter, seasonally adjusted. This is the first clear indication of a national home-price turnaround. Unadjusted for seasonality, prices were up 2.4%.
- Asking prices up 0.9% in March and 0.6% in February, month-over-month, after bottoming in January 2012.
- Strong year-on-year increases in asking prices throughout Florida, and year-on-year price declines throughout California.
The Trulia Rent Monitor for March 2012 shows:
- Rents up 5.0% year-over-year.
- Rent increases in nearly all large metros, especially metros with faster job growth.
Note: I have been on the Trulia Industry Advisory Board since its inception in 2006.
- Why US Housing Indices Make Terrible Investment Benchmarks [Matrix]
- Asking Prices on the Rise as Housing Recovery Expands [Trulia]
- Trulia Price and Rent Monitors – March 2012 [Trulia]
- Trulia Price and Rent Monitors – FAQ [Trulia]
Posted by Jonathan J. Miller -Sunday, March 4, 2012, 1:40 PM
Yesterday’s New York Post Article “The $lamptons: Unsold & foreclosed homes plague East End” got a number of people I know upset with the context of the piece. The article quotes reputable people (assuming I’m reputable) but not to reference the premise of the Property Shark report being cited.
Here’s the lead article quote:
Five years after the housing bubble burst, the number of unsold Hamptons homes has hit a 30-year high while prices have plummeted.
Reality: Prices fell sharply after Lehman collapse in 2008, but the overall market generally remained stable for the past 3 years so I’ll focus on the foreclosure numbers.
One of those upset with the piece was Enzo Morabito, a real estate broker who has long been a top producer in Long Island and the East End. He cites the article’s disconnect with his first-hand experience and emailed me this comment along with data to back up his view:
As I’m sure you all agree, this poorly researched article is sensational, inflammatory and potentially very damaging to the real estate market in the Hamptons.
For me, the New York Post has always been a guilty pleasure of mine for my commute home. Details such as their trademark use of “$” as replacement for “S” in real estate headlines are part of the package – hey, it’s a tabloid. While I’m always appreciative of being included in the New York Post for their real estate coverage, I happen to agree with Enzo and think this one went too far with hyperbole. Admittedly I am skeptical that this single article will damage the East End housing market – and I do think the real estate brokerage industry nationally worries too much about the power of the media over the housing market. But I get their concern because the appraisal industry has been a recipient of blame for housing’s woes in recent years.
The story is based on some sort of report by Property Shark, who is an essential NYC data provider trying to get traction on the East End. I’m sure reports like this are designed to garner PR attention – hey that’s how the media world works.
Are foreclosures expected to rise nearly everywhere in the United States over the next few years? Of course but by widely varying degrees – and that’s not the point being made in this post.
I haven’t been privy to the Property Shark report, but I know the BBC segment and the NY Post article were based on their report – the following quote and link was at least a part of it:
More than 48 homes in the Hamptons worth more than $1 million each are in foreclosure.
Here’s a Suffolk County “distressed” property map by Property Shark which would include short sales that was sent with their release to the media. The problem with this map, as with the old Google Base maps for distressed housing (don’t think they are displayed anymore?) is they are not updated and give the impression that every single property in every market is distressed.
Here’s the latest MLS data crunch recap sent to me by Enzo:
There are 117 Hamptons properties listed on the MLS that are “Short Sale” or “REO/Bank Owned.”
Hamptons includes: East Hampton and Southampton Townships: Eastport, Montauk, Flanders, Water Mill, Bridgehampton, Amagansett, East Hampton, Speonk, Sag Harbor, Westhampton Village, Westhampton, Quogue, Remsenburg, Hampton Bays, East Quogue, Southampton and Southampton Village.
- 74% are under $500K
- 14% are in $500-700K range
- 8% are in $700K to $1 million range
- 4% are over $1 million
HLS/Realnet (MLS) currently 5,116 properties listed as being actively for sale in all of the Hamptons (same communities as noted above), 2,728 above $1M
So I took a look at the numbers provided by Enzo, consistent with my experiences, and applied my math:
- 53% of all East End listings are above $1M
- 34% of all East End 2011 sales were above $1M
- 4% of all East End listings above $1M are short sale/REO
- 1.76% of all East End listings above $1M are REO.
- Market share of foreclosure activity declines moving from bottom to top.
I would guesstimate that overall foreclosures in the East End market are historically just under 1%.
After considering all this, I found Property Shark’s pronouncement that 48 foreclosure listings are the highest total in 30 years is misleading because no context was provided.
Although I don’t have and historical data series for Hamptons REO going back 30 years, just because Property Shark cites it as the “highest” doesn’t mean it is a “high” number.
I’m not being an apologist for anyone here but c’mon data providers and media, let’s remember to provide context for everything we analyze and present. People trust information they read to be at least reasonably reliable.
Posted by Jonathan J. Miller -Monday, February 27, 2012, 9:45 AM
[Interview starts at about the 31:30 mark.]
Had a nice interview about new and existing US home sales with Michelle Makori in the NASDAQ Marketsites studio on the street level at Times Square. She’s the anchor of the Friday evening broadcast of Biz Asia America, a show on the English-language channel of China Central Television (CCTV), China’s largest national broadcasting network. It is a 24-hour international news channel, which can currently be viewed in more than 120 countries and regions. They are making a big push in the US expanding operations in DC and NYC.
Have you recently sat down in front of the TV and tried to find national and international news? Aside from the inconvenient timing of network news, its nearly impossible and frustrating. Remember CNN Headline News? Now its HLN/Nancy Grace. CNN International is basically the same content as the US version. Bloomberg TV is one of the only US (real) news channels out there today other than when Anderson Cooper is on the scene at a disaster.
Like Al-Jazeera English and France 24, CCTV is filling the English speaking news void created by traditional US cable news outlets like CNN, Fox, MSNBC and others who focus on celebrities, tabloid style news and gossip. Let’s raise the bar people.
Posted by Jonathan J. Miller -Thursday, February 16, 2012, 12:18 PM
I was originally going to call this post: When Pundits Have No Idea What They Are Talking About but changed it to be more direct.
I have been a long time reader of City Journal and have been a fan of Nicole Gelinas’ writing. That’s why I was surprised to read a slanted rant-fest in the Winter 2012 edition called: The Rental Mania That Wasn’t. It’s inaccurate real estate stereotyping at its worst.
She writes a cynical critique of last weekend’s New York Times real estate story by Vivian Toy, a solid veteran reporter and friend of mine.
Gelinas demonstrates a lack of understanding with the Manhattan rental market, inconsistent with her long established writing credentials. She pontificates that the article was hyperbole and concludes the housing (rental) market has peaked because the New York Times said there was plenty of room to go:
If the Times thinks there’s no ceiling in sight, you can almost bet that the ceiling has already been reached. The paper of record has a track record on this. In 2005, the Times Sunday magazine ran a nearly 9,000-word story on the nation’s real-estate boom.
Remember the Time Magazine cover on housing?
Well the rental market still has plenty of wiggle room if we are talking peak. We are currently 27% below the inflation adjusted rental peak reached at the end of 2006. In other words we are not in uncharted territory as a rental market.
The Manhattan sales market didn’t peak until mid-2008. And the reference to Bob Toll confuses the national housing market with Manhattan market. The national market peaked in mid-2006, 2 years before Manhattan did.
The rental market is up 9.5% year over year and continues to rise. Why? Because credit remains tight and likely will remain tight for the next several years driving many people to rent rather than purchase.
And then there is the issue of “froth”:
Toy further notes that “to compete for top rents, some landlords are undertaking expensive apartment renovations in older rental buildings. Even 10-year-old properties are being subjected to face-lifts.” That points to landlord worry, not complacency. You don’t plunk down tens of thousands of dollars in free cash flow to overhaul an apartment unless you’re nervous that newly built apartments are going to pose a threat. In a sizzling rental market, nobody insists on a washing machine or a hardwood floor.
This logic also shows a lack of understanding with the current dynamics of the market. The renovations are being done because the cost of renovations are far less than the resulting increase in achievable rent. There is a premium on upgraded space. You can see it in the market.
And the closing snipe is hypocritical since Ms. Gelinas is held to the same standard as Ms. Toy.
Neither Toy nor the Times editors did their job here—unless their job is to sell real-estate advertising.
My recommendation to Ms. Gelinas is to be more responsible with your platform and actually understand the issue you are writing about. I live and breath housing metrics every day and was offended by the inaccuracy and mischaracterization of your writing.
The Rental Mania That Wasn’t [City Journal
For Rentals, No Ceiling in Sight [NY Times]
Posted by Jonathan J. Miller -Thursday, January 12, 2012, 7:51 AM
We released our report on the Manhattan rental market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994. Douglas Elliman Florida is making waves in Miami. This report is the first of it’s kind, providing neutral insight for both the distressed and non-distressed housing markets (hint: they are different).
Overall prices increased largely because lower priced distressed sales continued to lose market share as the “robo-signing” scandal of late 2010 caused foreclosure volume to drop sharply as lenders and servicers got their paperwork act together to show they actually had the right to foreclose. It’s a temporary situation as volumes are expected to rise over the next several years. The US Dollar continues to drive demand for new development.
Here’s an excerpt from the report:
The lack of differentiation between the distressed and non-distressed markets continued, despite the significant difference in housing stock. In the fourth quarter, the average size of a non-distressed condo sale was 24.7% larger than a distressed condo sale, and the average size of a non-distressed single family sale was 34.1% larger than a distressed single family sale.
There were 4,568 sales in the fourth quarter, the second highest fourth quarter total since the mid-decade market peak, and 6.1% less than last year’s fourth quarter. The average seasonal decline from third to fourth quarter has averaged 5.7%, yet the prior year quarter showed a 2.2% increase. This was likely due to the rush to close at the then end of 2010 out of concern that the Bush tax cuts might be eliminated.
The data tables will be updated shortly, if not by the time you read this. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Miami Sales [Douglas Elliman Florida]
The Elliman Report: 4Q 2011 Miami Sales [Miller Samuel]
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