By Roland Li
With the country still recovering from the worst economic crisis since the Great Depression, and national housing market experiencing extended pain, many in the industry are uneasy, consolidating business and attempting to trim costs.
But Jonathan Miller, president and CEO of Miller Samuel, a New York appraisal firm, is preparing to expand.
For Miller, who began the firm in 1986, along with his wife, Cheryl, who is CFO, and his sister, Dina, COO of Miller Samuel, it is a time of opportunity. He will begin analyzing housing markets outside of New York, including Baltimore and Maryland for Metropolitan Regional Information Systems, as well as Florida, for a Prudential affiliate. Last year, the firm launched MillerQA, a housing market seminar, and Miller and John Cicero, a veteran appraiser, began Miller Cicero in 2002, covering commercial properties.
Miller credits the company’s strong position to discipline during the boom. While competitors succumbed to grossly overvaluing properties, he said he resisted the temptation to expand, and kept the numbers real.
“I have a wife, four kids and a mortgage. I’m in this for the long haul,” said Miller. “We didn’t sell our soul.”
He said that before the recession, 75% of his business came from retail banks, but they are now only a quarter of customers. Private banks and wealth management companies, which have to hold mortgages, have replaced them. Miller Samuel also works with developers and small property owners.
Miller sees his firm’s position in between that of academia, which is detached from the actual properties, and brokerages, which have inherent bias when it comes to market reports. Ultimately, he seeks an objective view of the housing market, with accuracy being the main goal.
“Our orientation is neutrality,” he said.
He takes issue with one the nation’s most prominent housing reports, Standard & Poor’s Case-Shiller home index, which he describes as a tool to hedge housing futures. The report’s data is based on closings from two or three months ago, which means that its numbers lag far behind real-time market conditions, he said.
And he cites a general problem in housing reports: lack of context, particular in the wake of the boom. When, for example, purchase activity is reported to have risen 7% compared to the previous month, Miller said, it’s often not mentioned that the modest rise is minuscule compared to the numbers of pre-recession years. Miller expects the national housing market to endure further declines, followed by flat home prices.
Miller grew up in Bethesda, Md, a suburb of Washington, D.C. He went to Michigan State University to study hotel management, but after a couple years in the business, he knew it wasn’t for him. In 1985, he joined a Century 21 residential brokerage branch in Chicago, rising to become one of the top agents in the office. But after visiting Long Island to attend the wedding of a family member and staying in a hotel in Manhattan, he and his wife realized that New York was their ideal home. The density and sprawl of the city, combined with the vibrancy and velocity of its people made an immediate impression, and Miller described returning to Chicago to “stepping off an escalator.”
They quit their jobs, sold their cars and moved to the city. Miller continued residential sales, working as the sales director at the Astor Terrace, a 290-unit condo building on the Upper East Side.
The Millers were on the brink of starting their own residential brokerage, but at the verge of the beginning, they reconsidered. On Oct. 1, 1986, they instead founded Miller Samuel, entering appraisal, growing to 18 employees within the year. (Samuel is the name of a former partner who has left the company.)
The stock market crash of 1987 sliced the firm’s employees in half, but the market would eventually recover. Miller recalls the early, gritty days in the city, traveling to appraise properties amid the Tompkins Square Park riots.
Miller’s favorite buildings are 740 Park Avenue, the Rosario Candela-designed limestone co-op, along with open loft spaces like 30 Crosby Street. However, he lives in a 200-year old house in Connecticut, which has a basement that was used as part of the Underground Railroad.
Appraisal was a better fit than brokerage, Miller said, appealing to his affinity for numbers and desire to truly understand the market. He also appreciated straight objectivity, rather than approaching data with the intention of selling apartments.
“You’re selling your credibility,” he said.
In 1994, Miller sought to publish a regular housing report, and pitched the major residential brokerages. However, he stipulated that he would have complete control of the analysis, in order to preserve the purity of the report. Prudential Douglas Elliman was interested, and Miller has been preparing their data ever since. He credits the brokerage with giving his company complete control and never interfering. The report uses data from Elliman, as well as Miller Samuel. When federal agencies began seeking the data, Miller realized that he had an audience, and the report continues to appear on a quarterly basis, now accompanied by other firms. (Corcoran was the first firm to have such a report.)
The internet has irreversibly changed the residential homebuying process, making data more transparent and accessible. But while access has diminished the role of the brokerage as gatekeeper, housing data can be inscrutable for many.
“Just because it’s transparent doesn’t mean it’s understandable,” said Miller.
Desire for analysis has put Miller in high demand, making him a ubiquitous presence on the airwaves and in print – clippings from newspapers, declaring housing boom and bust, adorn Miller’s office in midtown.
But perhaps his biggest mark has been digital. Miller said that he’s been called one of the first real estate bloggers, and he would soon begin contributing to the real estate blog Curbed. He credits the audience for improving his analysis – as well as the appearance of his graphs – and also writes on his own blog, Matrix. He frequently uses Twitter and also runs a podcast, the Housing Helix.
In the coming months, Miller hopes to streamline his blog and podcast under one platform, making things easier to navigate. While the move will undoubtedly strengthen his brand, the real goal is to allow him to concentrate on enjoying the process. Indeed, while he also enjoys biking, boating, skiing and spending time with his four sons, Miller’s foremost passion is real estate, and talking about real estate. It also happens to be his job.
