Posted by Jonathan J. Miller -Wednesday, January 11, 2012, 6:00 AM 1 Comment
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Last fall Prudential Douglas Elliman turned 100 years old and they asked me to write an article for their Elliman magazine. If you’ve been living in a cave, I’ve been writing their housing market report series since 1994.
What started as a simple project morphed into a fun, albeit gigantic, research project. I learned a lot about the evolution of the Manhattan housing market, largely through the amazing incredible New York Times archives. This was right about the time of my web site revision and semi-necessary hiatus so I am cleaning out my desk of posts I have been itching to write so please indulge me.
The article I wrote for Douglas Elliman was beautifully presented by their marketing department and prominently inserted in their Elliman magazine (and iPad app!).
I have the feeling my project is going to morph into something bigger – it’s just too interesting (to me). A few things I learned about the Manhattan market over this period:
Douglas Elliman published the first market study in 1927 [heh, heh] not counting other marketing materials written before WWI)
Real estate media coverage in the first half of the century was social scene fodder (same as today) but with extensive and excessive personal details presented on tenants, buyers and sellers yet housing prices and rents were rarely presented in public.
Manhattan made a rapid transition from single family to luxury apartment rentals and eventually co-ops.
Housing prices and rents by mid century weren’t that much different than the beginning of the century.
Manhattan’s population peaked at 2.3M around WWI.
Wall Street in the 1920’s was seen as the driver of the real estate market.
Federal and state credit fixes in the late 1930’s help bail out the housing market.
• Change Is The Constant In A Century of New York City Real Estate – pdf [Miller Samuel]
• My Theory of Negative Milestones [Matrix]
Posted by Jonathan J. Miller -Wednesday, March 26, 2008, 12:55 PM Comments Off
I have always had what I considered a jaded view of the electorate. Overall I think citizens tend to vote with their wallets.
So I continue to be amazed at the delayed response and awareness over the last year on a federal level to the housing market problem as it related to the economy. The Federal Reserve began to react in late summer, but it was at minimum, a year late. Here we are well into the presidential campaign, and only now, does housing begin to take a bigger role in policy declarations by the candidates.
“I will not play election-year politics with the housing crisis,” he said, adding he would evaluate all proposals. ”I will not allow dogma to override commonsense.”
Of course that doesn’t address election-politics to applied to all other issues being discussed. Again, a disconnect on the federal level continues to apply to housing.
”I will consider any and all proposals based on their cost and benefits,” the certain GOP presidential nominee, who has acknowledged the economy is not his strong suit, told local business leaders south of Los Angeles.
Hillary Clinton addressed her approach to the problems only this week.
On Monday, Democratic presidential candidate Sen. Hillary Rodham Clinton proposed several remedies to the home mortgage problems, including aggressive federal intervention to ease the strain on homeowners.
Among her ideas is to create an Emergency Working Group on Foreclosures to deal with the growing foreclosure crisis. These would include Paul Volcker (former Fed Chair), Robert Rubin (former Treasury Secretary) and Alan Greenspan (former Fed Chair). All are distinguished individuals and sharp financial minds. I can’t help but note the irony of having Greenspan on the panel since he was at the helm during the housing market build up and argued that housing was not a problem.
Senator Obama’s proposed $10 billion foreclosure fund is a mere one-third the size of Senator Clinton’s, yet another failure on his part to acknowledge the size and scope of this crisis. When Senator Obama says that Senator Clinton’s plan will “reward people who are wealthy and don’t need it” he shows himself to be out of touch with average Americans. Senator Clinton’s plan only helps subprime borrowers, a population that is disproportionately low-income.”
The problem is, the credit markets won’t likely recover before the fall election and with the economy continuing to erode, housing will likely continue to erode.
So where are we?
In banking jargon, the analogy that housing would be “too big to fail” but I think in political jargon, it’s more appropriate to say the housing/credit market problems are “too big to see.“
Posted by Jonathan J. Miller -Thursday, July 12, 2007, 12:35 PM 3 Comments
Yesterday I got the word that a New York Times story on parking spaces I was interviewed for was going to make the front page, known as A1 or Page One by regular readers. About 20 minutes after I got the call, I started getting email alerts that Lady Bird Johnson had passed away at the age of 94. Not to get sidetracked from the point her but I really enjoyed Robert Caro’s 2 biographies of Lyndon Johnson: Means of Acent and Path to Power.
I had been certain my story would get bumped from A1 forever or another day. I was pretty excited this morning to find Vivian Toy’s story: For Parking Space, the Price Is Right at $225,000 on the front page. Its my 5th time on the front page of the NY Times (but who’s counting) and it is not any less exciting than the first time (back in 2000).
But I digress…
One thing I learned from Vivian is that developers allocate about 150 square feet for a space. 10′ x 15′ Thats about the same size as a separate maid’s room and a similar price point.
Private parking spaces are is a rare commodity in Manhattan. Its a geographic area, where the majority of residents, don’t drive for their commute everyday. The mayor is attempting to initiate congestion pricing to make it more expensive to drive a car or truck south of East 86th Street, which is about half of the island and the most densely occupied. This concept has been successful in London. Commuting by car is not easy within Manhattan. It is expensive and slower than using the subway or other public transportation services. The public transportation system is inexpensive, generally reliable and accessible. Yet the the cost of owning a parking space is relatively expensive, given the current price point of Manhattan real estate.
It is interesting that a premium is being placed on the right to purchase a parking space since this is an area of public transportation commuters. But hey, its all about supply and demand.
My good friend and appraisal colleague in Chicago, Chip Wagner shared with me some stats from what is arguably a much more car-dependent city:
$300,000 to $500,000 condo units parking spaces are $25,000 to $40,000
$500,000 to $100,000 condo unit parking spaces are $35,000 to $50,000
And highest I know of is $75,000 for over $2,000,000 properties.
Supply/Demand of parking is not out of flux like your city. Most of the new developments, the ratio is 1:1. Actually, some buildings, the parking spaces may be 4 spots for every 5 units, therefore in a building that might have a balanced or oversupply of units, might have an undersupply or balanced supply of parking spaces.
Based on a median sales price of about $550,000, the price ratio in Chicago is about 7% while Manhattan is about 25% ($225k/$895k).
As Manhattan housing’s fortunes go, so does parking.
Posted by Jonathan J. Miller -Saturday, June 9, 2007, 5:54 PM Comments Off
Its Saturday, so its about time I place my Friday Three Cents Worth post for Curbed online. This week I go all geological on listing inventory by analyzing the sharp drop in igneous (co-ops) and metamorphic (condo) rocks.
Posted by Jonathan J. Miller -Thursday, June 7, 2007, 10:48 AM 4 Comments
Been traveling quite a bit – back on schedule next week (I know, I know, you’ve heard it before)
Source: New York Observer
For about the past five years, I have been telling, explaining, cajoling, articulating, ranting and lamenting (I am sure there are a few more terms to add to the list) the direction that the appraisal industry has moved towards. Its actually more like 15 years, but the past 5 years became intolerable. The industry has involuntarily taken the “please hit me again” position and has been powerless to do anything about it.
“Itâ€™s a jokeâ€”the system is a joke,” Mr. Miller said. “There is very little independent analysis of what collateral is really worth.”
I have spoken with everyone who would listen over the years, and some who would not, about whether the lending industry wants an accurate assessment of the collateral or simply a form filled out for the file. Don’t get me wrong, there are a lot of great appraisers, mortgage brokers and lenders out there, but honestly, they are few and far between.
Why? Because the current lending system is flawed as I and others have discussed in nearly every post on Soapbox and quite a few here on Matrix. Here are the the two choices when ordering an appraisal. If you have a commission riding on the appraisal report outcome, which choice do you make?
Get an appraisal for a low fee, nearly immediately and always at the value required to do the deal.
Get an appraisal for a fee commensurate with the complexity of the assignment in a reasonable period of time (no impact on the closing date) with a comfort level that the collateral is accurately reflected.
The current actions by the New York State AG’s office is a step in the right direction and I can only hope we don’t end up with simply a law they makes it illegal to pressure an appraiser.
New laws will make the stakes higher to be pressured but it won’t change a thing. (Rinse lather) repeat.
Making appraisal pressure illegal will not change a thing. There needs to be a regulatory environment created where appraisers are insulated from pressure, but still held accountable for accuracy.
Posted by Jonathan J. Miller -Thursday, May 31, 2007, 4:54 PM 1 Comment
Its Thursday, so its that time of the week to provide my Three Cents Worth as a post for Curbed. This week I listen to my readers and chart price per square foot based on size. I kicked the tires so much when creating the chart, I hurt my right foot.
Had a fun interview with Tom and Sara this morning on the always MUST watch/listen Bloomberg Surveillance. We talked housing, rentals, vacancy and inventory. An added bonus was the addition of Adam Davidson – co-founder and co-host of Planet Money... Read More