YouSaid · the spoken record

Jonathan Miller

lines on the record: 153
first: 2023-09-01
most recent: 2023-09-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“FEMA prices flood insurance basically at a level that the private market can't compete. And so, in many ways, the federal government is encouraging development in”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“It's significantly challenging. What I find just maybe as a sidebar to this is on top of that, when you think of things like flood insurance and the cost of flood insurance.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's funny interface a lot with the affordable housing industry here in New York because our research is open market. We're not looking at subsidized housing or anything along that line. And the mantra when you talk about how many more to build, the answer across the board is, I don't know, but a ton more.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And then long term homeowners where they've paid down the mortgage. But, you know, so you think about transactional volume as being restrained by high mortgage rates, but you do have a large cohort of the housing inventory that is, or a potential inventory that doesn't have a mortgage. Issue with it, which I think is. Something that's probably not understood.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Of inventory. It's not conducive for a first time homebuyer environment to do that because of lending challenges. The other thing I thought was the numbers that have come out, I may, I don't know if I have this exactly right, but that the number of homeowners in the US without a mortgage is like 35%.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“They're skewed higher end. So I'd say there's a much more severe inventory challenge for starter homes, first-time buyers, then we really give credit for that it's the product mix has skewed higher end. Why has that happened? Because primarily land sales, right? I mean, you know, land appreciates and improvements depreciate, right? The way you should think of it, land is what appreciates. And I think we're now seeing a lot of home builders gobble up land to sort of anticipate the next wave.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. Well, no, it's more because if you look at the product that is being built in all the national home builders, in the last 10 years, they've really, there's been a lot of pivoting to higher end homes, luxury homes. And so when you look at just raw units.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And now you have submarkets where new construction is like 50% of inventory because 50% existing because the existing has collapsed, right?”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“but not correct, not drop sharply. And I think that's going to. Bring more inventory into the market, but still it'll be far inadequate. The interesting thing about the state of inventory today is normally new construction accounts for 10 to 15 percent of total inventory. That's true for Manhattan. It's true for the nation.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Good for inflation, good for pricing for new homeowners, because there'll be more competition. And frankly, at this time, The only thing I see of bringing rates down besides a recession, which we've been forecasting a recession in the next six months for the last couple of years, is the idea that we're going to see the Fed at some point perhaps soon is going to stop pushing rates higher. And when they do, and if they stay still for three, four months, I think you're going to see mortgage rates drift lower.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think, first of all, first thing it tells you is that if mortgage rates drift meaningfully lower and why meaningfully mean in the high fives, certainly I'm not talking about fours or 3% range, then you're going to see inventory enter the market.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“We're starting to see a little bit, but not in any significant way. I'd say, you know, we're a year in. So I'd say we're going to start seeing it in terms of better pricing over this next year, but nothing dramatic would be my guess.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And as a result, you can argue, well, sales are down 25%. So you say, you know, hey, it's mortgage rates of doubled. Well, it's also because you have dramatically less product. And then on an anecdotal level, just in sort of ground level chatter in various markets that I connect with, that the product that's coming in back to your like, how long does it take a seller to capitulate to market conditions? The product that's coming in is priced like it's still the boom. And so, you know, and it takes one to two years for a seller typically or a developer to capitulate to the current market, you know, because what do they do? They just don't sell. They wait. It's going to get better.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Because the distortion that has occurred in 2021 to early 23 has been significant. So in Florida, in almost every market, inventory is more than 60% less than pre-pandemic.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“We're depending on the market, we're generally about compared to, say, second quarter 19 compared to second quarter of this year. We're down about in the 20 to 30 percent range from normal. What's really interesting and what is so different is, yes, you have sales drop. So normally you'd expect inventory to rise. If you look across Florida, inventory compared to pre-pandemic, which became my alternative metric to year over year. Right.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“In a significantly higher volume that would be considered a normal volume in every market. And so we're coming off of that high. So year-o-year comparisons make it look like you're down 40%, but you are up 50, 80%. A year ago over the prior year, right”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Units that sold, but it's important to remember that a year ago was a rocket ship. It was an historical anomaly. It wasn't”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. So the idea that a rapid slowdown in sales, that's the first sales generally, depending on the markets are down 20 to 40 percent year over year. Transactions.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, the focus has been the inventory challenge and the doubling of mortgage rates. I remember in the beginning of the Fed pivot a little over a year ago now where we started to see rates go up, there was this thinking within the real estate community or just people that sort of tracked real estate weren't necessarily brokers that we were going to see when rates fall again, then everything's just going to go back to normal. And it's like that doesn't seem to be on the horizon. Goldman Sachs just came out and said, you know, maybe we'll see rate cuts by the second quarter of next year. But they're not rate cuts that bring it from seven to three. They're rate cuts that bring it from seven to maybe six or high fives.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
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2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“But anybody could get hacked, right? So there's no real answer yet on what they're going to do. And I just, I've never heard of a situation where, you know, Know that's going to really impact the transactional volume in these markets.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, they get their data various ways. But yeah, like it could create, who knows how long this will go on. And it's, you know, the MLS looks bad because, hey, you got, you know, shut down.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“They power MLS systems like in the And they can't, you know, they're stuck, sort of like what happened in, I think it was Suffolk County, the ransomware attack on public records where these people make a living out of using MLS systems and they don't have access or there's lots of problems. And I just thought about big data and the real estate community and then you start seeing the, you know, there's more things go online, you're more vulnerable to attack. And that's real problem for the housing. So I imagine.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“They control about 50% of them. There's also a contingent that are anti, but it is a product of the brokerage community and it is an essential tool to them. And so this recently one of the big, there's three or four major software companies that drive the MLS systems. CordLogic is one of them with Matrix. There's FlexMLS. And a big one is also Rapatoni. And Rapatoni just had a ransomware attack.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, what I wanted to sort of comes to mind is something that hasn't really happened in a significant way in the real estate industry, but there is multiple listing systems across the United States, which are essentially a database for real estate agents and for managing listings.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And I remember I used to call my father when he was alive. I'd call him at the beginning of the class and say, hey, Dad, I just taught my class. And he said, Jonathan, you're so respectable. And I'm like, What do you mean? Wasn't I respectable before? Like, is this like it put me over the top? The official impression.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's nothing better than talking about a topic that you're really comfortable with and really smart people ask you questions that cause you to maybe think a little bit differently about the solution or whatever. I just love the experience Columbia has been very good to me and I appreciate it. And the thing that I like most about it is, you know, by the end of the class and you're asking questions, like they'll answer in unison, you know, 150 students. Like it's like locked into their brain. And it's totally satisfying. That sounds like a lot. And I've been doing it for about five years. And my ritual was, and they wooed me for like, they spent like a year and a half taking me out to lunch and say you'd be perfect and say, sure, you have the right Jonathan Miller. And then I did it.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Panels in. But the program is fantastic. And I'm one of those people that run up and down the aisles. Yeah, talking. And the other sort of secret passion is I get to tell the same dad jokes every year.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Architecture school. It's a master's in real estate development. And so my students are mostly in their 23 to 29, super smart and very eager to get into the business. And so what it has allowed me as a venue, I teach every summer. It's not year-round. I usually have about 150 students during when we were Zooming during the pandemic. I had like 190, which there's a lot of icons on your Zoom screen, right?”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“The affluent, yeah, they bought in the Hamptons a second primary home. I called it co-primary at the time and high-end markets in the county surrounding New York definitely did better. And people moved farther. I mean, my wife and I moved a half an hour farther from the city because... We figured we weren't going to be going into the city five days a week. And you get a lot.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And it fell by half because during a global pandemic in a multifamily building, are you going to let strangers into your apartment, right? The thinking was, no. But in reality, the buyers that Zoomed out to the suburbs were largely from the rental market because they weren't anchored to another asset. They didn't have”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, the way I look at it is in the city itself in Manhattan and most urban centers, sales activity didn't fell by half.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Almost eight and a half years of unsold supply. And that's including active inventory for new development, unsold condominiums, whether actively listed for sale or in shadow inventory that the developer could sort of dip into when they ran low of sales. After the pandemic and because of this sort of the pandemic sort of introduced strength to the high-end market, the share of or the activity continued to favor the high end of the market. So instead of being a market that was sort of the low end was where all the action was, it became a market where the high end was Strong because the share of unsold condos fell from 8.3 years to about just over three years, meaning it fell by more than half. In terms of what it would take to sell off the supply in New York, it was dramatic.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, what's interesting if you dig a little deeper is not that the whole world is just paying cash. It's that the number of transactions for cash buyers and financed buyers both fell sharply year over year. The aggregate total was about 40% year over year. Wow. And I'm sort of making this simplistic, but cash buyers fell 20% and buyers buyers buyers bu”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So in Manhattan, the second quarter had the highest market share of cash transactions in history. Two-thirds of the transactions, about 65%. Amazing.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it should be going negative. And I mean, it should be rising and it's not. And so what that does, you're not seeing prices fall because we're actually seeing right now in the second quarter, just looking at the suburbs around New York City, like Westchester, Nassau County, Fairfield County, the market share of properties that closed in this recently completed quarter, the market share of all closed sales, depending on the location typically about 45% of the transactions went to a bidding war, meaning that they closed higher than the last asking price of the transaction. And that doesn't happen when mortgage rates double, right? It makes your brain crack thinking about it because it's so contrary. And that's because the inventory factor is what is throwing all the modeling off.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And we have this collapse of inventory that is now sort of, when you think about the home valuation or just market trends, typically when there's a negative external event like, you know, a spiking interest rate. So if you saw interest rates, the 30-year fix is more than double what it was a little over a year ago, you expect sales to slow down. They did. And you expect inventory to pile high to the sky, and that didn't happen. And in fact, right now, new inventory is falling. New inventory meaning inventory is coming in right now is actually going negative. Year year year.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's funny you say that because in the beginning of this year, when people said, what do you think 2023 is going to be like? I dubbed 2023 the year of disappointment because people weren't going to get their 2021 price. The sellers weren't, but the buyers weren't going to see a substantial savings in pricing that prices weren't going to correct.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, wait. The answer to that question is always consumers, when they're uncertain, they pause. And so you see the transaction volume drop, but the pricing, that's the greater fool theory, right? Continue until there's no more buyers. And then the price is correct.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And sales were going straight down. And you can see it because sales actually lead price direction by a year in many cases.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Collateral is what it looks like. The collateral won't be adequate or could would or wouldn't be. A perfect example of that is sort of the when you apply like the greater full theory to South Florida real estate in the 80s where it was all about carpenters and nurses flipping quitting their jobs and flipping real estate and becoming a lot of money. And then they would turn around and sell it to somebody else for double and double and double and double. And if you actually stood back and looked at a chart of what was happening, prices were going straight up.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, the challenge is that when we're looking at valuation of a property, we're looking more than price. Price is sort of the caboose at the end of the train. Leading indicators would be contract activity and listing inventory, sort of transaction based rather than price-based. And so...”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Keep it fit. It's like Rodney and Caddyshack. Just keep it fed. The term back then was, here's a good appraiser, good in air quotes, and good translated into making the number.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And so now there's all kinds of restrictions post Dodd-Frank introduction to the process where people can't talk to you like they could.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, sort of. I mean, essentially, what no one understood in the industry and still don't understand today in the real estate industry is that when appraiser is doing an appraisal for the buyer that's getting a mortgage, their client is actually the bank.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you remember that ad, the National Association? I think he wrote a piece about I might have? Yeah, I think where there was one month out of like the last 20 years that it wasn't a good time to buy”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“You got to be transparent. And what's really interesting to the industry's credit is there's a lot of market studies out like we publish, but the brokerage community. Compared to what it was in the 80s and 90s is dramatically more transparent, even though not perfect about what's happening as opposed to in the dark days of Lehman collapsing and, you know,”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“I remember being in a New York Times front page story about prices dropping X percent. And I remember a real estate. Brokerage CEO to remain nameless called me and said, What are you doing? This is wrong. You can't talk. And I said,”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“And then I was sort of attacked by my industry, at least the local competitors who were very morally flexible and were really doing well. And in 2008, that same journalist came to me and said, this is the guy who told us three years ago that this was going to happen. And I...”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, actually, I thought leading up to the great financial crisis, I thought to myself, We're going to be out of business within a couple of years because nobody wanted an independent valuation. Everybody knew the number but the appraiser. And so the system incentivized mortgage brokers to hire the appraisers that made the numbers for them because they wouldn't get paid until the deal closed. And we weren't morally flexible And so that was really a lean period. And I remember I was interviewed on some national TV. Program interviewed me and said, what do we not know? And I said most of the appraisals being done through mortgage brokers aren't worth the paper they're written on. And I'd say 75% of them.”
2023-09-01 · Masters in Business · Jonathan Miller on High Mortgage Rates · IDENTIFIED FROM THE TRANSCRIPT · source