Peak Millennial, So Instead Lets Talk About A $2 Million Housing Market Record

For the past couple of months I’ve been speaking to NYC real estate agents about millennials and their impact to the housing market. My last event was a few days ago where I reached critical mass on the topic and I don’t want to talk about it anymore. After I left to return to the office, I got a call from a journalist about another topic and we got to speaking about the millennial discussion frenzy. She too was getting tired about the topic and mentioned all the pr pitches for new development projects she received. The angle seemed to be how well suited millennials were for that particular project. While we were speaking, she received yet another millennial email pitch.

There you have it. Peak Millennial.

And yet millennials are not that special…except for my four sons. I should make an April Fool’s day reference today. But happily it is also the birthday of my third oldest son. He’s a millennial (sorry).

1Q 2016 Manhattan Housing Market Report Published

Manhattan_1Q16

Today Douglas Elliman published our Manhattan research for 1Q-2016. There was a lot of interest in the story for a number of reasons:

  • The Average sales price broke the $2,000,000 threshold for the first time in the 27 years I have been tracking the market (sorry, I’m not a millennial). I know everyone likes it when we break thresholds of even numbers, but really, this $2 million is just a number. I remember back in in 2004, when the average sales price of a Manhattan apartment was cracked the $1 million threshold, I was being interviewed by a Japanese TV channel on the street in Midtown Manhattan and was asked what the meaning of reaching this threshold really meant. I pretty much said what I feel now. It’s an incremental number that makes us pause and reflect on the market. But the next day we move on and focus on more important stuff. Not sure if this ever aired in Japan. 😉

1q16manhattan-medianavg

  • With the slow down in contract signings within the super luxury new development market ($5M and above), many were wondering if there would be a correction. The super luxury housing market in Manhattan cooled off quite a bit about a year ago. It has taken about a year for market participants to talk openly about it instead of tiptoeing around it. The momentum of five years of frenetic development activity made it hard for the market mindset to shift gears quickly. But now the challenge is to articulate the market change in the correct context. New development contract signings above $5 million, referred to as super luxury, has cooled off considerably. However that threshold represents 8.9% of the market. Ironically this market is the reason we cracked $2 million. Super lux contracts signed in 2013-2015 and early 2015 within buildings whose construction is now completed, are entering the market in large volumes. In fact, new development closings are up 94.1% YOY and much of that is skewed to the super luxury market. There were 60 sales to close at or above $5 million in 1Q16. Throw in the re-sale market which comprises 78% of all sales that has limited but rising inventory and prices have continued to rise. About 48% of all sales that closed in the first quarter were at or above list price.

1q16manhattan-$5M$10

1q16manhattan-overunder

Something Scarier Than A Haunted House

You’ve Got Another Chance to Buy the $1.25 Million New Jersey Mansion That’s Being Watched by a Maniac Thirsty for Young Blood [NY Mag]

SEO friendly headline aside, I think this situation, if true, is far more scary than a visit from a ghost out of Davey Jones’s locker. The idea that there is a stalker who threatens you and any prior owner of a home is awful. A little over a decade ago, my wife and I were in a bidding war for a home and we lost. We found out later that the reason the sellers were leaving was due to the nightmare neighbor next door. Phew.

housestalker

Stop Dissing Apple Maps, It Was Google Maps This Time

Maybe. I am always amazed how people are completely dependent on technology to the point that common sense isn’t considered. Imagine coming home one day and someone accidentally demolished it.

Big Mac Prices See More Appreciation

There was a fun piece in Realtor.com:

How Much Have Housing Prices Gone Up in 30 Years? Hint: Less Than a Big Mac

There have been studies that show how long a fast food hamburger can last so this index is a fair comparison.

bigmacindex

There is not a U.S. Appraiser Shortage

Here are the numbers as presented by Dave Bunton of the Appraisal Foundation. Read it.

UPDATE A well informed long time friend and appraiser colleague gave me the head’s up that the use of the word “credentials” by the author in the following chart is a bit misleading. The article interchanges the word “credentials” with “appraisers” yet 27% of appraisers have more than 1 credential (i.e. licensed or certified in more than one state). For example, I am licensed in 2 states so I would count as 2 appraisers within the chart. The actual number of individuals who appraise is about 79,000 or 19% less than the number of credentials. And there are many people with credentials that don’t actively appraise. Still, the premise is the same, there are plenty of appraisers, just not enough that are willing to work for half the market rate in an AMC dominated bank appraisal market.

afappraisers

More Charts On The Manhattan Housing Market

My apologies to all my non-NYC readers but you have to admit, this market is fascinating to watch.

Here are a few more of the charts I’ve created on the market:

1q16manhattan-condomedian

1q16manhattan-coopcondoavg

1q16manhattan-invbymonth

1q16manhattan-newdevresaleinventory

1q16manhattan-numberstrata

1q16manhattan-ppsfnewdevshare

If you need something rock solid in your life (particularly on Friday afternoons), sign up for my Housing Note here. And be sure to share with a friend or colleague (or millennial). They’ll immediately want a Big Mac, you’ll feel satiated and I won’t be an April Fool.

See you next week.

Jonathan Miller, CRP, CRE President/CEO Miller Samuel Inc. Real Estate Appraisers & Consultants

 

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