More Than Market Reports: Jonathan Miller on the ‘Fun’ of Appraising Real Estate in NYC

Jonathan Miller has been called many things over his nearly 40 years in New York City real estate, from the reverential descriptors “go-to expert,” “market guru” and “data whisperer” to the more effusive “oracle,” “true Rockstar” and—our personal favorite—”the DJ Khaled of real estate.” Although he appreciates the many flattering appellations, Miller would prefer they didn’t tend to overshadow the title that best speaks to the core of his business: appraiser. Jonathan Miller Such is the case, however, for the president and CEO of Miller Samuel Inc. , the real estate appraisal and consulting firm he cofounded with his family in 1986. Since he and the firm began issuing more than 200 reports a year on a number of U.S. sales and rental markets on behalf of  Douglas Elliman , Miller has become synonymous with the meticulous methodology and unimpeachable integrity of his firm’s market analyses. “I remember the first time I realized that people outside of the brokerage industry were reading the research was when the Federal Reserve reached out to complain that we didn’t have the report yet on our website,” Miller recalled. “I thought to myself, Oh, we’re onto something .” Now mandatory reading for “an alphabet soup of federal agencies in Washington,” from HUD to the FHA, the reports are valued by government, Wall Street and the brokerage community alike for their independent, unbiased calls on the state of the housing market. View the latest Elliman Reports prepared by Miller Samuel Inc. “Our reports are not marketing brochures,” Miller said. “Each one is a piece of research—when the market is good, it’s going to say so, and when the market is bad, it’s going say so, with no sugarcoating to it. We apply the same thinking to our appraisals—right down the middle.” But while Miller does devote the majority of his time to the reports, he is keen to remind his real estate colleagues that he is more than “just the guy who does the market studies” and that appraisals—particularly the kinds of non-market valuations his firm specializes in—are what make NYC real estate so endlessly fascinating for him. To illustrate the point, he recounts a favorite anecdote of conducting an estate appraisal of a downtown Manhattan condo, where he arrived to find a brood of live chickens in the cigarette-smoke-filled living room, before racing uptown to assess a palatial Upper East Side townhouse between Fifth and Madison. “You never know what you’re going to get into.” “It had gold-plated ceilings and statues—the other end of the spectrum,” he recalled. “The fact that you can have a $239 million condo in one building and a tiny $500,000 studio in the building next to it, that’s intriguing to me. The market changes block by block, building by building, which makes it difficult, but it’s also what makes it fun. You never know what you’re going to get into.” By his count, Miller has been inside and valued more than 8,000 properties to date. Apart from his experience with the broad variety of NYC real estate, he also knows how to work with its notoriously “raw” market data. “When I started out in the ‘80s, there wasn’t clean MLS data,” Miller said. “The city has made strides in making more data available in service and a much more open system than 10 years ago. But the quality of the data, especially on the transactions, I find to be generally very dirty—extra commas, extra zeros, which kind of makes a difference.” Miller and his team of appraisers (all of whom are salaried employees, not contractors) bring decades of experience to a process that requires exceedingly diligent and exhaustive research, cross-checking multiple sources and “triangulating” various data points to establish the value of a property—often at a particular point in time. “For appraisals, we try to establish what a property is worth today ,” he explained. “But in valuation, we value things in the future and in the past. For example, for estate appraisal, we often have to appraise something at the time of a principal’s death, which could be six months ago. In divorce appraisals, I’ve had to value something as of 20 years ago, which is difficult. You have to get yourself in the mindset of that period of time and consider the market conditions then—we’ve amassed a whole library of commentary about market conditions going back three and a half decades. Or if someone is planning to renovate a kitchen or bathroom, they ask us to estimate the value six months or a year from now.” Promoting diversity in appraising Recently, Miller has been focused on lowering the barriers to entry for the appraisal industry, which he blames for perpetuating a lack of diversity and growth across the profession. In June, he was one of five expert witnesses (and the only appraiser) invited to testify on the subject of bias and the lack of diversity in appraising in a three-hour hearing convened by the Appraisal Subcommittee and carried live on C-SPAN (a personal “bucket list check-off”). “I’ve been writing aggressively about this issue for about five years,” Miller said. “And everybody on the subcommittee—the heads of all the agencies that touch the mortgage process—all read my newsletter, and they’re asking questions based on things I’ve written, which was very professionally satisfying.” As it happened, during the first hour of the hearing, Miller’s wife, who was in attendance, abruptly left the committee room to answer a phone call from their son announcing the birth of their fourth grandson. “When the hearing was over, several representatives from the various agencies came over to compliment me on my testimony,” he recalled. “My wife and I ended up showing baby pictures to the head of the FHFA, which regulates Fannie and Freddie.” As he recounted the episode, Miller couldn’t resist falling into number-crunching data-analyst mode. “We have four sons, and I’ve done the math,” he said. “One to three kids per couple is my prediction. The median of one to three is two, two times four kids is eight, we’ve had four, so we’re at 50% of forecast.”