Posted by Jonathan J. Miller -Friday, January 27, 2012, 10:25 AM
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I got a call from the New York Times recently in response to a Redfin study looking at the best time to list a house. Their conclusion seemed to be different than my experience in the NYC metro area, Washington, DC, Baltimore and Miami, all housing markets I have analyzed extensively so I dug deeper. I was inspired by the challenge and looked to Long Island for answers.
I think it really came down to the way Redfin used “winter” in the study since I came up with March as the best time to list using the extensive data over at the MLSLI (16,664 signed contracts from 12/10 to 11/11).
The Redfin report concluded that when you list in the Winter, you have less competition. However, you also have a lot less buyers so that benefit would be an offset by lower demand. This point is illustrated by the fact that the highest number of listings actually enter the market in March which is the month that results in the fastest marketing time.
When I drilled down to the day of the week, I caveated to the reporter (and was pointed out by the brokers in the article) that I think it really depends on the date of the broker tour day (the day brokers view new listings that came on the market). When I lived in Chicago, my town tour day was on a Friday and in my hometown in Connecticut, our broker tour day is on Tuesday. I would bet that Friday is a more common day for broker tours (to view all new listings that entered the market that week) which makes the findings somewhat contrarian since I would think Thursday would have been the best day to list (it was a close third best) because the property has time to get distributed before the tour day.
Of course this doesn’t suggest that a seller who decides they want to sell their home and it happens to be June, must wait until the following March.
Whatever the reasons or issues that are raised, we looked at over 16,000 contracts in a one year period marketed through the MLS of Long Island, excluding the Hamptons/North Fork. I was only measuring the time to market a property, not whether the highest price was achieved. I’ve got metrics on that but I want to crunch the numbers over a longer period to get more comfortable with them. I plan to do this in other markets I cover with MLS data.
Listing on a Wednesday, on average, results in the fastest marketing time.
Conclusion to the question: “When is the best time to list your property?”
These are mutually exclusive results but based on the data resulted in the fastest marketing time – days on market from original listing date to contract date.
Here other some other findings:
More listings enter the market on a Monday.
The most signed contracts occur in June.
Posted by Jonathan J. Miller -Thursday, January 26, 2012, 11:40 AM
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We released our report on the Long Island sales market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994.
We also published a companion report, The Hamptons & North Fork Decade 2002-2011 with a revised format, to lay out out the market in context over an expanded window of time.
Here’s an excerpt from the 4Q 2011 report:
There were 541 sales in the fourth quarter, 0.6%
more than 538 sales in the prior year quarter and
prior quarter. The level of sales remained above
the 5-year average of 484 sales. Despite the
relative stability of sales, the number of available
listings fell sharply. There were 1,728 listings
available at the end of the fourth quarter, 25%
less than 2,303 listings at the end of the same
quarter last year.
Despite the decline in listing inventory and
stability of sales, days on market and listing
discount expanded over the year. Days on
market, the number of days from the last price
change to contract date, was 201 days, 25 days
longer than 176 days in the prior year quarter.
Listing discount, the percentage difference
between the list price at time of contract and the
sales price, increased to 13.4% from 9.3% in the
prior year quarter.
Median sales price was $675,000, down 7.5%
from $730,000 in the prior year quarter. Average
sales price followed the same pattern with a
decline of 16.2% to $1,335,884 from $1,594,785
in the same period last year. The price indicators
in the prior year quarter were pressed upward
from the high end skew caused by concern over
the potential expiration of the Bush tax cuts
and rise in capital gains rate. Buyers and sellers
rushed to close before the end of 2010.
The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Hamptons & North Fork Sales [Prudential Douglas Elliman]
The Elliman Report: 2002-2011 Hamptons & North Fork Sales Decade [Prudential Douglas Elliman]
The Elliman Report: 4Q 2011 Hamptons & North Fork Sales [Miller Samuel]
The Elliman Report: 2002-2011 Hamptons & North Fork Decade [Miller Samuel]
Posted by Jonathan J. Miller -Thursday, January 26, 2012, 10:32 AM
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We released our report on the Long Island sales market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994.
We also published a companion report, The Long Island Decade 2002-2011 is the first of its kind, to lay out out the market in context over an expanded window of time.
Long Island remains weak, but considering the turmoil of the fall that began with the S&P downgrade of US debt in August that lead to significant volatility in the financial markets and the European debt crisis, this uncertainty resulted in a modest decline in housing prices and a nominal decline in sales activity. However this weakness has been a continuing trend.
Here’s an excerpt from the 4Q 2011 report:
Housing prices slipped in the fourth quarter,
dipping below prior year levels. Median sales
price was $339,000 in the fourth quarter, 4.8%
below $356,050 in the same period last year.
Average sales price showed a similar trend,
declining 5.1% over the same period to $412,060
from $434,424 in the prior year quarter.
The number of sales for the quarter totaled
4,222, essentially unchanged from the 4,252
total of the same quarter last year. However,
pending sales declined 7% to 4,134 from 4,447
over the same period. Listing inventory slipped
1.6% over the year to 18,447 from 18,742 in the
prior year quarter. During the fall, housing market
participants were confronted with a series
of economic woes, such as financial market
volatility after the S&P rating agency downgraded
US debt last August, and the financial crisis in
Europe. As a result, they appeared to press the
“pause” button, taking longer to make decisions
and waiting until more time had passed before
returning to the market.
The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Long Island Sales [Prudential Douglas Elliman]
The Elliman Report: 2002-2011 Long Island Decade [Prudential Douglas Elliman]
The Elliman Report: 4Q 2011 Long Island Sales [Miller Samuel]
The Elliman Report: 2002-2011 Long Island Decade [Miller Samuel]
Posted by Jonathan J. Miller -Monday, January 23, 2012, 12:47 PM
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Last week’s post on the “hole in the house” was picked up by Business Insider and the crossfire of coherent comments and righteous indignation ensued. I largely stayed out of it until today.
The threads on my original post on Matrix and Business Insider are worth a read.
Some observations and feedback as a result of my post were fascinating:
- One appraiser in Michigan who commented on the Business Insider repost tweeted me to say he was blacklisted by Rels, the firm cited in my original post.
- I was entertained by the diatribe of a couple of people who rambled about things that weren’t in or inferred by the post.
- One commenter “Ken” knew of the property so well I can only assume by his arrogance he was the appraiser or review appraiser on the assignment in question and was saving his bacon by reframing the conversation.
- It was interesting to see people respond to the post as if they were reviewing this as some sort of appraisal when I was simply pointing out that an AMC appraiser used a “comp” that was an outlier from other data available, that was condemned, had a notice visible from the street and would have at the minimum, raised a flag to the condition of the interior of the property.
- The defensiveness of some of the comments inferred that the homeowner was unrealistic and the market had declined. Doh!
An appraiser friend of mine forwarded me this response from an AMC who saw the post to get a chuckle:
A couple of comments:
*There is no mention of what the subject collateral is, it’s condition, or if there is any improvement – or the relevance of this comp – in other words, what was the Scope of Work? An appraiser is supposed to select comps that are similar, proximate and timely.
*The article states that the borrower did get the loan – which at least on the surface might indicate that the comp was sufficient for the lender’s needs.
*There is no mention of what kind of appraisal product was ordered – drive-by or other.
*The author suggests that the siding had not been removed – does that mean the hole is newer than the appraisal?
*and sometimes there are lousy appraisers
[redacted]: As candidly as possible, I receive an anecdote similar to this periodically and in almost all cases, after full review, it is an optics issue – the appraiser performed the work properly based on client instructions and the Scope of Work. Not always – but almost always.
Two final points:
*There continue to be complaints about quality but it nearly always ties back to someone not getting the value assigned that was hoped for. The market continues to slide and by nearly all estimates will continue to do so in 2012. The messenger continues to be shot and will be for another 1-2 years….
*Did you know that Freddie and Fannie have both stated publicly that appraisals that go through AMCs statistically are “better” than not going through AMCs?
Other than appraisers causing you misery, I hope all else is well in your world.
Thank you for checking in.
My favorite point made here was the comment:
As candidly as possible, I receive an anecdote similar to this periodically and in almost all cases, after full review, it is an optics issue – the appraiser performed the work properly based on client instructions and the Scope of Work. Not always – but almost always.
In other words, depending on the scope of the assignment, the appraisal may be meaningless and this type of quality would be reasonable. Throw comps denoted as “condemned” onto the report because it is a recent sale even though as even a drive-by, the sale would be suspect.
Why go throw the appraisal exercise if you can’t rely on it? Those entrenched in the AMC world, in terms of their business practices or quality say its just as good as non-AMC work. Given the decimated ranks of the good appraisers, it’s become a self fulfilling prophecy.
Posted by Jonathan J. Miller -Monday, January 23, 2012, 8:55 AM
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Ok, at least it’s it’s Year of the Dragon, not the Year of the Rat but the Chinese New Year does bring to mind some other associations with housing in the post-credit crunch world.
Here are names I have associated with each year since the fall of Lehman and the impact on housing.
2008 (Rat) – Year of the return to reality. Appropriately named, the year notes the final punctuation mark on the credit boom unraveling and the fact that the entire world lost it’s mind.
2009 (Ox) – Year of the first time buyer. The first year after the September 2008 fall of Lehman Brothers that marked the beginning of a new credit environment as well as a new housing market. Mortgage rates fell to the floor and the Federal government introduced the first time homebuyer tax credit – later expanded to existing homeowners. For appraisers it was the “Year of the Appraisal Management Company” as the Cuomo/Fannie Mae agreement effectively prevented the residential appraisal industry from becoming a reliable and impartial benchmark provider.
2010 (Tiger) – Year of the short sale. Preceding the incoming flood of foreclosures, the banking industry understood that it was a lot cheaper to effect a short sale rather than go to foreclosure. Unfortunately they had no idea how to manage the process and many fell into foreclosure. Here’s some free advice to banks looking to cut losses on foreclosure activity: actually pick up the phone.
2011 (Rabbit) – Year of the foreign buyer/trophy property sale. The DC politically charged debt ceiling debate leading to the S&P downgrade of US debt and economic debt problems in Europe drove many foreign buyers to the US housing market as a safe haven. A byproduct of this trend was a surge in the sale of unique high end properties in the US. Think Candy Spelling and Sanford Weill. I had originally dubbed 2011 as “Year of the foreclosure” but the “robo-signing” scandal in late 2010 tempered servicer/lender plans of releasing foreclosures into the market until they were more confident they could prove ownership and the right to actually foreclosure (what a time we’re living in).
2012 (Dragon) – Year of the foreclosure/election year do-nothingness. Servicers/lenders will begin to ramp up the foreclosure process again as more time has passed for them to get their ducks in a row. I am doubtful there was enough time to do much of anything considering the millions of potential transactions but it’s likely to start this year and heavier than usual volume should last for at least 3 years. This is a good thing because we need to clear the market before claiming a housing recovery. We will likely see a surge in election year political promises as an attempt to help troubled homeowners such as a more streamlined shortsale process, an improved loan modification process and an expanded refinance policy, but judging from all feeble attempts so far and the stalemate in DC on economic policy and their stunning lack of understanding about what ail’s housing, we’ll probably get the status quo instead.
The next Chinese New Year will be named Year of the Snake. Uh, I’ve never liked snakes.
Posted by Jonathan J. Miller -Thursday, January 19, 2012, 10:17 AM
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We released our report on the Brooklyn sales market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994. This report is the first to provide comprehensive insight and analysis for both counties beyond standard MLS stats.
Overall Westchester price indicators were mixed while the number of sales slipped from the same period a year ago. Overall sales were up but single family sales fell 5.4%. Sales of Westchester 1 families comprised 57% of all county residential sales, their lowest market share in 30 years (as far back as the data goes). Over the last few years there have been quarters that have been close. The uptick in everything else (lower priced or rent driven) caused the low market share. Putnam showed a jump in overall sales while the price indicators were mixed.
Here’s an excerpt from the report:
The price indicators for the quarter were partially
mixed partially, as a result of a significant variance
caused by the surge in entry-level co-op sales.
The average square footage of a residential sale
was 2,082, down 2.8% from 2,143 in the same
period last year. As a result of the decline in size
and shift in the mix to smaller sales, the fourth
quarter median sales price and average sales
price were nearly identical. The median sales
price of a Westchester residential sale was
$525,000, up 16.7% from $450,000 in the prior
year quarter. The average sales price showed
the opposite trend, falling 9% to $524,722 from
$576,512 in the prior year quarter.
The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Westchester & Putnam Sales [Prudential Douglas Elliman]
The Elliman Report: 4Q 2011 Westchester & Putnam Sales [Miller Samuel]
Posted by Jonathan J. Miller -Thursday, January 19, 2012, 9:53 AM
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We released our report on the Brooklyn sales market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994. This report is the first to cover the entire borough.
There was a 27.6% surge in lower priced co-op sales in the fourth quarter bringing down the overall price indicators. The jump was influenced by the sharp drop in mortgage rates during the fall. Overall sales for the borough were 6.1% above the prior year quarter. I thought it was interesting that the two lowest priced regions, South Brooklyn and East Brooklyn, posted a sharp increase in sales and drop in price indicators while the two highest priced regions, North Brooklyn and Northwest Brooklyn posted declines in sales and increases in prices.
Here’s an excerpt from the report:
The housing market saw year-over-year gains
in sales for the fourth quarter. There were 1,558
sales, 6.1% more than 1,468 in the same quarter
last year. The increase in sales was largely due
to the increase in market share for co-ops,
which comprised 22.5% of all borough sales,
up from 18.7% over the same period. The surge
in lower priced co-op sales was a result of the
sharp decline in mortgage rates during the fall
after the S&P downgrade of US debt, which
occurred at the end of the summer. Listing
inventory declined 4.8% over the same period
to 5,908 from 6,203 in the same quarter last
year. As a result, the number of months to sell all
inventory at the current pace of sales fell to 11.4
from 12.7 over the same period, but above the
10.4 average of the past three-and-a-half years.
The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Brooklyn Sales [Prudential Douglas Elliman]
The Elliman Report: 4Q 2011 Brooklyn Sales [Miller Samuel]
Posted by Jonathan J. Miller -Thursday, January 19, 2012, 9:26 AM
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We released our report on the Queens sales market for 4Q 2011 this morning. I’ve been authoring this series for Douglas Elliman since 1994.
Queens saw significant price skew from the 127.7% increase in year-over-year sales of lower priced co-ops in response to the drop in mortgage rates during the fall. Even with the surge in co-op sales, overall sales declined 19.3% over the same period. New development posted it’s second highest market share since the credit crunch began. However it would be fair to characterize the entire borough as weaker than last year at this time.
Here’s an excerpt from the report:
Median sales price for the fourth quarter
declined 7% to $343,000 from $369,000 in the
prior year quarter. Average sales price showed
the same pattern, sliding 2.5% to $395,264
from $405,489 in the same period last year.
The decline in the overall price indicators was
primarily due to the large shift in the mix toward
co-op sales, the lowest priced property type. As
buyers took advantage of record-low mortgage
rates during the quarter, the lower priced market
quintiles saw larger year-over-year declines in
median sales prices.
The custom data tables are updated and ready for you to play with. The chart section on the new site remains a work in progress.
The Elliman Report: 4Q 2011 Queens Sales [Prudential Douglas Elliman]
The Elliman Report: 4Q 2011 Queens Sales [Miller Samuel]
Posted by Jonathan J. Miller -Tuesday, January 17, 2012, 3:08 PM
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My senior staff appraiser shared the following nightmare story – about a friend of his who is going through a mortgage refinance with one of the big US national banks regarding a house in Long Island, NY. Rather not say the bank name but a stagecoach comes to mind.
An appraisal was ordered through a big appraisal management company – Rels. Their appraiser used a condemned house with a big hole in the side of it – visible from the street – as a comparable sale presented in the report
Attached are the photos of the condemned house used by the appraiser in my friends appraisal…They are still fighting to have a new appraisal done. I will be honest the house was not this bad (when it was sold) as most of the siding has been removed. However, it was bought by a developer/LLC (not a person) and the condemned sign was on the door had the appraiser gotten out of the car. The hole in the side I believe was there as you can see that is the side with some siding still remaining.
The condemned house appears to have sold well under market value because a developer bought it to renovate and flip at market levels. No commentary or awareness of this was evident in the report. This condemned house is in the same neighborhood but the borrowers property happened to be updated and in good condition. Interestingly, I’m told the condemned sale was the outlier of the other sales presented in report that pulled the value well below the other “non-condemned” sales.
The slogan on the Rels web site is: Quality appraisals — and rapid turn times.
However I see the terms “quality” and “rapid” as mutually exclusive. “Quality” is more aligned with “timely” and “rapid” is more aligned with “fast and furious without review”.
The borrowers are peeved because although they can get a mortgage, the suspect report is in their file and they are worried it will haunt them later with a home equity application or something they haven’t thought of – after all – they paid for it. In fairness to Rels, it doesn’t sound like they are in the loop and the bank just wants to close the loan. The bank is making comments along the lines of “the appraisal won’t stay with your file, so just close” which seems to stray from my understanding of file documentation for lending.
Lesson?
Housing doesn’t recover until appraiser amateurism is eliminated from the lending process. Amazingly, large institutions still seem more interested in efficiency and a built-in “low” bias than getting valuation services that provide reliable results in order to make informed decisions to generate business with.
Posted by Jonathan J. Miller -Tuesday, January 17, 2012, 11:00 AM
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Last fall, Vivian Toy of the New York Times wrote a good piece on combining apartments: Combine and Conquer: Your Place and Mine and used the phrase I coined in the first paragraph:
…referring to Manhattan’s premium for larger contiguous space on a price per square foot basis.
When I was contacted for last weekend’s article On Fifth Avenue, 1+1+1 = $25 Million? I had gleefully suggested a modification to my phrase:
…in reference a story about a triple-combination apartment and how all the sellers would likely benefit by allowing a buyer to return the apartment to its origination (or close to it’s) configuration. In combination sales, while the value of the total usually reaps a premium over the sum of the individual values, the resulting layout may turn out to be something less valuable as compared to an apartment similar in size that was originally designed that way.
When there is an opportunity to restore an apartment back to it’s original configuration before it was cut up (commonly during the housing shortage after WWII in Manhattan), the value of the apartment would likely be comparable to similar sized apartments originally designed to be single units.
Like domain parkers, I’m staking my claim to a third phrase:
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