Posted by Jonathan J. Miller -Thursday, April 26, 2012, 3:39 PM
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Miami-based Douglas Elliman has had my Miami market report handiwork translated to both Spanish and Portuguese to better serve their South American clientele. Market demand from South America has been a significant force over the past year and a half. The weak US dollar continues to be one of the factors driving housing demand in Miami and one of the key reasons why the non-distressed market continues to thrive.
Elliman Report: Miami Sales (Spanish)Elliman Report: Miami Sales (Portuguese)
[click to open reports]
I took five years of French in high school so it’s a bit disorientating to see my analysis translated, but very cool at the same time. We are expanding our South Florida market analysis significantly over the next several months (no, France is not on the rollout list…yet).
Posted by Jonathan J. Miller -Thursday, April 26, 2012, 2:36 PM
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We published our report on Hamptons/North Fork sales for 1Q 2012 this morning. I’ve been authoring this report series for Douglas Elliman since 1994.
Here are some takeaways:
- Overall housing prices (median sales price up 1.2% ) continued to show stability.
- The luxury market showed larger year over year increases in the price indicators than the overall market.
- Number of sales were up nominally from same period last year (0.5%).
- Listing inventory is down sharply year over year (down 17.5%) – home sellers are more cautious about entering the market (ie sales flat but inventory falling).
- Properties taking somewhat longer to sell and there is a little more negotiability on price between buyer and seller (days on market and listing discount expanded)
- Despite strength in prices at high end, we saw an uptick in market share of sub-million sales – the decline in mortgage rates and warm weather brought buyers out sooner.
Here’s an excerpt from the report:
Median sales price edged up 1.2% to $630,000
from $622,500 in the prior year quarter. Average
sales price increased 17% to $1,437,597 from
$1,228,857 over the same period, largely due
to continued strength at the upper end of the
market. In the median sales price by quintile
analysis, the fifth quintile increased 24.8% yearover-
year, while the remainder of the market
segments showed modest change and mixed
results over the same period…
I’ve got a tool to build custom data tables and view charts on the market.
Posted by Jonathan J. Miller -Thursday, April 26, 2012, 2:20 PM
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We published our report on Long Island sales for 1Q 2012 this morning. I’ve been authoring this report series for Douglas Elliman since 1994.
Here are some takeaways:
- Housing prices were mixed – median sales price unchanged 0% but average sales price fell 5.4%. The drop in mortgage rates shifted mix to lower priced homes.
- Pending sales unexpectedly jumped from year ago levels (+21.2%) as mild winter weather brought consumers into the market earlier than usual.
- The luxury market was somewhat weaker than the overall market. Luxury median price slipped 2.6% year over year.
- Listing inventory was also down (4.1%) as sellers were more cautious about listing their homes.
- Properties taking somewhat longer to sell and there is a little more negotiability on price between buyer and seller (days on market and listing discount expanded)
Here’s an excerpt from the report:
Although the number of sales slipped 1.2% from
prior year levels, the mild winter weather brought
an unexpected surge in first quarter pending
sales. There were 5,209 signed contracts
outstanding in the first quarter, 21.2% more
than 4,297 in the prior year quarter. The unusual
amount of pending sales activity this quarter may
temper the levels of the second quarter, typically
a high water mark for sales activity each year.
Listing inventory slipped 4.1% to 20,358, the
lowest first quarter total in six years…
I’ve got a tool to build custom data tables and view charts on the market.
Posted by Jonathan J. Miller -Wednesday, April 25, 2012, 9:28 AM
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Quest Magazine asked me to write an intro piece on the luxury housing phenomenon i.e. “Real Estate Renaissance” followed by a number of housing types from the markets they publish within. Quest is a beautiful magazine with some interesting editorial perspectives and great visuals on high end real estate.
Here’s what I wrote (I’m arguably the driest writer in the magazine, but hey, it’s how I think):
Real Estate Renaissance: Jonathan Miller – April 2012
One of the primary characteristics of the U.S. coastal housing markets, after the dust settled from the collapse of Lehman Brothers, has been a sustained period of high-end market strength. Trophy properties are seeing new demand.
The sudden end to an era of reckless bank underwriting and subsequent entry into a period of fiscal austerity was expected to disproportionately crush the luxury housing market. Easy access to credit allowed for many consumers to live beyond their means.
The onset of the credit crunch led to the overnight evaporation of the secondary market for jumbo mortgages, too large to be purchased by ailing Fannie Mae and Freddie Mac. While the federal government focused on the former GSEs, little attention was given to improving access to mortgage financing for high-end housing. Banks now have to hold jumbo mortgages in their own portfolios rather than offload the risk to investors hungry for bigger returns. The much tougher jumbo mortgage financing requirements were expected to bring a collapse of high-end housing prices and grind sales activity to a halt. But that isn’t how it played out. The price spread between high-end and starter homes has expanded over the past several years despite irrational mortgage underwriting standards for jumbo mortgages. In fact, a remarkable number of home purchases at the high end of the market have been paid with cash rather than obtaining mortgage financing at commercial banks, thereby bypassing the lending industry’s legacy of poor lending decisions in the prior decade. The global accumulation of wealth during the global economic boom enabled many investors after its end to seek out luxury housing in the U.S., helping coastal markets outperform others.
The weakness of the U.S. dollar against other foreign currencies, specifically in Europe, South America, and Asia has brought investors to U.S. soil in droves. Initially, this was viewed as a currency play where wealthy foreign investors were simply taking advantage of the sharp discount for U.S. housing. While the favorable exchange rates may have tipped the balance towards the acquisition of U.S. assets like housing because of the perceived discount, investors were also moving their assets into a relatively more politically and economically stable environment.
Will the use of cash in housing purchases continue? It seems likely, perhaps out of necessity. Rational jumbo mortgage underwriting standards and the creation of stable secondary market for jumbo markets is not expected to return for years. Once those problems are eventually resolved, the widening gap between luxury housing and the balance of the market could very well widen further.
Posted by Jonathan J. Miller -Wednesday, April 25, 2012, 6:00 AM
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Trulia’s Chief Economist Jed Kolko keeps punching out dials and gauges on the housing market. He’s also got a “Price Monitor.” These tools are really growing on me because they provide context to the current state of the market – something that is sorely missing.
With his Housing Barometer, he combines three key housing market indicators:
- new construction starts (Census)
- existing-home sales (NAR)
- the delinquency-plus-foreclosure rate (LPS First Look).
Here’s the full write up: Trulia’s Housing Barometer: Recovery Slips Backward in March
and constantly asks:
What does a “normal” housing market look like, and how far away are we?
Posted by Jonathan J. Miller -Tuesday, April 24, 2012, 11:11 PM
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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:
By far the three most popular observations about the Manhattan housing market to date in 2012 are: “mortgage rates are at historic lows” and “listing inventory is tight” and…ok, there are just two that are worthy.
I thought I’d mash them together and see what happened since I’ve never made the direct association. Admittedly I was surprised with the visual that resulted….
[click to expand]
Posted by Jonathan J. Miller -Monday, April 23, 2012, 11:04 PM
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[click to expand]
Recently I was contact by The Real Deal Magazine to take a look at the correlation between the stock market performance and the housing market. I personally don’t believe it and I have written about correlation and how silly it can get.
The thinking goes like this:
The Dow Jones Industrial Average rises, the housing market rises = correlation = a housing market indicator, but…
“Twenty-five percent of New York City wages come from financial services,” Miller said. “It’s part of the fiber of being here and so there’s always been a propensity to correlate the Dow Jones industrial average with housing here. I don’t ascribe to that belief. Housing is not a stock. [Rather,] if you have a robust and actively traded market, in theory, employment is more likely to be stable, which consummates sales transactions.”
Actually, Manhattan’s market share was 37% in 2009 after reaching 44% in 2008.
For years I’ve been posting a DJIA versus Manhattan inflation-adjusted sales price chart and there wasn’t much correlation – I also tried a non-inflation version to no avail. But the reporter’s call inspired me to revisit the topic and compare DJIA against Manhattan sales and the patterns were actually pretty similar (see top chart).
When I think about the housing rebound in the dark days just after the Lehman tipping point and how stock-market orientated we are in Manhattan, the only thing that seemed to push consumers back into the market was the roar of the stock market in the first quarter of 2009. This comparison against sales (transactions) seems show the same trend. While I’m still not on the correlation bandwagon, the 20-year trend is quite compelling.
Posted by Jonathan J. Miller -Sunday, April 22, 2012, 11:15 AM
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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 -Thursday, April 19, 2012, 4:39 PM
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We published our report on Brooklyn sales for 1Q 2012 this morning. I’ve been authoring this report series for Douglas Elliman since 1994.
Here are some takeaways:
- Listing inventory fell sharply from the same period last year and is now below the five year average. Falling inventory has helped the market stabilize and caused the listing discount to compress.
- Housing prices slipped below year ago levels, largely due to the increased market share of lower priced co-op sales. While all types saw a decline, the share for co-ops expanded. The housing market is currently characterized as stable.
- New development continues to see consistent market share. The 1Q12 market share of 15.2% is consistent with the 15.7% four year average.
- Properties took one month longer to sell in the first quarter than in the same period last year. Part of the increase is contrarian – it is attributable to tight inventory forcing more older listings to be absorbed.
- The East Brooklyn area saw a sharp gain in market share to 18.6% of the borough from 10.3% in the year ago quarter largely because of the increased amount of distressed activity.
Here’s an excerpt from the report:
Housing prices slipped from prior year levels,
largely due to the shift in mix of property types
that sold over the quarter. The sharp decline
in mortgage rates to record lows resulted in
an increase in co-op sales market share, a
lower priced property type. Median sales price
declined 5.3% to $450,000 from $475,000 in
the same period last year. Average sales price
slipped 0.8% to $565,291 from $569,799 over
the same period. Listing discount, the difference
between the list price at the time of contract and
the sales price, was 3.5% tighter than 4.8% in
the same period last year The number of sales fell 23.9% to 1,807 from a
three year high of 2,373 in the prior year quarter.
Listing inventory also saw a large decline, falling
16.7% to 6,092 from 7,316 in the same period
last year. As a result the absorption rate, the
number of months to sell all active inventory
at the current pace of sales, increased to 10.1
months from 9.2 months over the same period…
I’ve got a tool to build custom data tables on the Brooklyn markets and I am updating the charts and will place them here. You can also see other market areas and other generally cool housing market charts (IMHO).
Posted by Jonathan J. Miller -Thursday, April 19, 2012, 3:59 PM
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We published our report on Queens sales for 1Q 2012 this morning. I’ve been authoring this report series for Douglas Elliman since 1994.
Here are some takeaways:
- Entry-level apartment sales continued to surge as buyers took advantage of record low mortgage rates.
- New development market share expanded to 7.3%, the second highest share since Lehman (2Q 11 has an 8.9% share)
- The sharp decline in inventory outpaced the decline in sales. As a result the absorption rate (number of months to sell all inventory at the current pace of sales) accelerated to 12.2 months from 15.7 months in the same period a year ago – the market was more efficient.
- Price indicators slipped modestly – pulled down by the surge in lower priced sales in response to record low mortgage rates.
- West Queens saw the largest gain in market share over the past year, followed by South Queens.
Here’s an excerpt from the report:
There was a 16.2% decline in the number of
sales in the first quarter to 2,176, down from
2,598 in the prior year quarter despite the surge
in co-op sale market share. Co-ops represented
28.7% of all sales in the first quarter compared
to a 13.2% share of condo sales and a 58.1%
share of 1-3 family homes. The increase in coop
market share was largely caused by the
sharp drop in mortgage rates last fall. The entrylevel
market is more immediately responsive to
changes in mortgage rates. Listing inventory fell faster, declining 35% to 8,851 from 13,609 in the
prior year quarter. The result of declining sales
and more rapidly declining inventory resulted in a
sharp drop in the monthly absorption rate. In the
first quarter, the number of months to absorb all
active inventory at the current pace of sales was
12.2 months, more than 3 months more efficient
than the 15.7 month rate in the prior year quarter…
I’ve got a tool to build custom data tables on the Queens markets and I just updated the all the charts for Queens. You can also see other market areas and other generally cool housing market charts (IMHO).
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