The latest East End market report by Douglas Elliman is a “can you top this” example of incompetence.
Want to see the Douglas Elliman 1st Qtr 2011 Market Report?
Get it [HERE]
To start with, the Douglas Elliman/Miller Samuel report says there were 379 properties sold on the East End in the 1st Quarter. They missed 88 sales; they just didn’t record them, and therefore, all the market statistics, which are derived from the sales — HAVE TO BE WRONG! Check our public website, www.eastendlistings.com. We show 467 transfers of single family homes taken from Suffolk County records — which ones does Douglas Elliman/Miller Samuel believe do not count?
Get a list of all 467 transfers [HERE]
How Could Douglas Elliman/Miller Samuel be that far off???
Neither Miller Samuel nor Douglas Elliman collects the raw data themselves. They buy the data from Long Island Real Estate Report [HERE]. Even though the report from Elliman says there were 379 sales, and they say they get their data from Long Island Real Estate Report, the Long Island Real Estate Report website shows only 318 sales for the 1st quarter of 2011 (Southampton 131, Riverhead 42, East Hampton 94, Shelter Island 11, and Southold 40). The Long Island Real Estate Report was wrong, under-counting by 149 property transfers.
Note: On 4/22/11 I reported (on The Real Deal website) the problem of faulty data from Douglas Elliman and Long Island Real Estate Report. The next day, Long Island Real Estate Report [HERE] changed the numbers from those in the previous paragraph to: Southampton 151 from 131, Riverhead 45 from 42, East Hampton 100 from 94, Shelter Island 12 from 11, and Southold 43 from 40.
Now the Long Island Real Estate Report Shows a total of 351 records in the five towns, still 28 less than shown by Douglas Elliman/Miller Samuel and 116 fewer properties than reported by Suffolk Research Service, Inc. from Suffolk County records.
How do we know that we are right and the Long Island Real Estate Report and Douglas Elliman and Miller Samuel are wrong? You can count them yourself. We publish each property transfer on www.eastendcomps.com [HERE] and [HERE]. I ask Douglas Elliman/Miller Samuel the question:
What we do, and what our competitor, The Long Island Real Estate Report does, to collect the data, is not rocket science. We go to the county center and record the transfer information from deeds on the County’s computer into our computer. Then we proof the data and run it through computer programs to process the data.
Douglas Elliman/Miller Samuel shows data for the 1st qtr of 2011 compared with the previous quarter and the 1st qtr 2010 in the chart above. Turns out, the data reporting of The Long Island Real Estate Report (and therefore Douglas Elliman/Miller Samuel) was off less in those quarters (Elliman missed 8 sales in 4th qtr 2010 and missed 62 sales in the 1st qtr 2010).
These Douglas Elliman/Miller Samuel numbers show a decrease in sales from 4th qtr 2010 to 1st qtr 2011 of 29.6% and a decrease from 1st qtr 2010 to 1st qtr 2011 of 22.0%, because of the large under-counting (they missed 88 transfers) in 1st qtr 2010. The actual decrease to 467 sales was 14.4% — quarter to quarter, as reported by Suffolk Research Service, Inc. from Suffolk County records.
It is this Douglas Elliman inaccurate and incompetent report of a 29.6% drop in sales units (when it is actually 14.4%) that caused the “The Sky is falling” report to be published in The Real Deal [HERE] on April 22, 2011.
About the Douglas Elliman 1st Qtr 2011 Market Report, The Real Deal said: [HERE]
“The East End residential real estate market completely collapsed in the first quarter of 2011, according to a Prudential Douglas Elliman market report released today, but the report’s preparer said the numbers were an anomaly created by fear surrounding the possible expiration of the so-called “Bush tax cuts” this past December. (President Barack Obama eventually extended the cuts for two years in late December.)
“Jonathan Miller, president and CEO of Miller Samuel and the compiler of the report, said that buyers who feared Bush tax cuts would expire in 2010 moved early on their East End purchases, thereby inflating last quarter’s sales numbers and depressing statistics for the first three months of this year. The combination set the first-quarter report up for drastic declines.”
We don’t believe Jonathan Miller’s theory on Bush tax cuts expiration’s affecting the market. Miller’s statement about Bush tax cuts, like his market report is BALONEY. The problem was not in the market’s decline, it was in the inaccurate and incompetent report on the market published by Douglas Elliman, due to chronically inaccurate data provided by the Long Island Real Estate Report.
The Long Island Real Estate Report business is simply managed poorly; they are very sloppy, skipping over and not including deeds that were recorded at the County offices.
To make the situation worse, at least three agencies other than Douglas Elliman use The Long Island Real Estate Report for their data supplier, and therefore, the reports produced by these companies are inaccurate and often virtually useless (Town and Country, Corcoran, and Brown Harris Stevens).
Douglas Elliman Report that High End sales had dropped is WRONG!
Miller Samuel says:
“First quarter of 2011 saw less high end activity. There were 15 sales that sold at or above $5,000,000 in the first quarter compared to 24 sales in the prior year quarter …”
The real data (our Suffolk Research Service, Inc. data) shows that this is not true. See the table to the right. The “high end” is not hurting; it is doing fine. We show 28 total sales over $5M, including 24 residential/home sales. Douglas Elliman/Miller Samuel doesn’t define what their data includes. Whichever way you look at the figures, there isn’t a statistically significant 1st qtr 2011 decline at the high end of the market on the East End.
The Douglas Elliman “high end” figure of 15 sales is dead wrong. They report a big decline at the high end which is not happening.
The Miller Samuel figures of “days on the market” is very deceiving and virtually useless. “Days on the Market” in all other markets (MLS LIBOR for instance) means “Days on the Market” — the days the property has been on the market. The Elliman/Miller Samuel “Days on the Market” refers to how many days since the last price change on the property. Average days on the market for Hamptons property is 900 days or more, when the contrived Elliman figure shows much less than that (167), I believe on purpose to mislead their buyers and sellers.
And the “days on the market” figure pertains only to Douglas Elliman listings, not all properties in the market. There is no way to check these internal Douglas Elliman figures, and I for one would not trust Douglas Elliman. Likewise, the Miller Samuel “Listing Discount”, “Listing Inventory”, and “Absorption Rate” are Douglas Elliman only figures, not the entire market. There is no proof that these numbers are representative of the Market, or that they can be believed.
I ask the question. Even if that information could be trusted, who needs it?
The entire Douglas Elliman/Miller Samuel report is poorly sourced (does it include Riverhead or Shelter Island — if Shelter Island is included, is it in the “Hamptons” or the “North Fork”?). The report does not identify whether the properties covered are homes only, or include other types of properties. The preparation and presentation of the report is dishonest and amateurish.
The report contains many graphs (8) and tables (11) with all sorts of comparisons and ratios. I’m in the business and find them useless — just fluff.
Market reports are statistical in nature, and should be prepared by a statistician or engineer. This report looks like it was prepared by a salesman bullshitter.
I emailed [HERE] Jonathan Miller of Miller Samuel with some of my concerns with his report. I wasn’t at all satisfied with his response [HERE], and an analysis of the numbers show that he was being disingenuous [HERE].
He claims that because his data comes from:
“…more than just LI Real Estate Report, such comparisons are not applicable”.
This is total BALONEY, and Jonathon Miller knows it. There is only one data source. That source is the Suffolk County Clerk’s records, and comparisons are applicable. If each of us collected data 100% accurately, they would all be the same.
The Douglas Elliman report is wrong, WAY WRONG.
Some five years ago, Douglas Elliman Marketing VP (called “Prudential Long Island Realty” in those days) did a terrible job of preparing a market report.
I emailed Dottie Herman saying.
” I would think that you would have a Marketing VP who knew something about Marketing”
– The VP of Marketing was gone from the company in a few weeks.
See the Suffolk Research Service, Inc. 1st qtr report [HERE]