Jonathan Miller is the city’s expert real estate appraiser. All the properties his firm Miller Samuel Inc. assesses are worth up to about $5 billion every year.
Miller looks at a wealth of data from almost all the real estate transactions in the city, and produces about 28 market reports annually, for the brokerage Douglas Elliman. Miller’s reports are regarded as the “reports of record.” And he is the go-to guy for real estate media, quoted about every week.
“I was just interested in what created value and what took away from value,” said Miller. “To me, I never get tired of that.”
Real estate in New York is a spectator sport with all eyes on the big transactions, and Miller is basically the sports commentator.
He is also a prolific contributor to several media and is a big user of social media. He blogs, he shares articles on Twitter, charts on Pinterest, and posts food and family photos on Instagram and tumblr.
“For me, every market is just fascinating to see—what the patterns are and why the patterns occur, and what it means for the future,” Miller said. “A lot of data flows through my hands in this process, and it’s why I get up in the morning.”
Family Business
Miller lives in Connecticut with his wife of nearly 31 years and they have four sons. When he’s not talking about real estate (which isn’t often, as it’s “morphed into this backyard barbeque conversation”), he’s out on the Long Island Sound on his boat.
“I am a very unsuccessful lobster fisherman, averaging one lobster a year,” he said with a laugh. Though there is a moratorium on lobster fishing this coming year, he'll just be exploring the waters. Miller feels at home on the water, having grown up and spent most of his life near the coast.
Two of his sons have spent a summer working at his firm, but he doesn’t think any of them will be interested in working in real estate. “They’re fiercely independent, and we have no doubt they'll branch out on their own,” he said. They take after Miller and his wife.
Miller has always had a real estate background: his father owned a brokerage and was a residential developer where he grew up in Delaware. But Miller went to college thinking he'd get into the hotel business. He discovered he didn’t like it.
So he moved to New York to sell homes in new developments. Miller kept seeing appraisers come into the buildings with no information and thought: he could do that. His family had the industry expertise, and they were computer literate, which was not common in the 1980s.
“We started collecting information and we opened up in 1986,” Miller said of the family-run Miller Samuel. He is also the co-founder of Miller Cicero LLC, a commercial real estate valuation firm.
Their clientele was three-quarters banks, but it dramatically changed with the 2008 financial crisis. Basically, he said, banks became less concerned with what properties were actually worth.
“They saw appraisers as deal enablers,” Miller said, and the problem was, “we weren’t morally flexible.”
It was 2005, and Miller remembered watching his competitors grow as his business shrank. “I remember thinking, ‘in three years we’re going to be out of business.’”
Three years later, they inversed their client list. Three-quarters of the list was private clients, and the banks were private ones in wealth management.
“Now every year is a record year for us, and it’s not because we’re doing higher volume, but because we have better clients.”
Objectivity
Fifteen years ago, Miller remembered appraising a one-bedroom apartment in Greenwich Village. The seller spent $50,000 to install a purple, built-in entertainment system.
To the seller, it was a tangible asset. To a buyer, it was worth minus $3,000 to rip it out and repair the walls.
The appraisal process can be broken up into two main parts: collecting the objective information, and comparing the property to similar ones.
But people have the impression that appraisers have a checklist of things and can go through one house and give the seller objective figures on specific amenities, Miller said.
“The emotional factor is one of those things that’s harder to factor in,” he added. And buying a residential property is almost always an emotional decision.
It can sound like strange science.
“Is a park view of more value than a river view? Is being on the third floor more valuable than being on the second floor, no change in view?” Miller said.
Yet, experienced appraisers like Miller look at all the factors to get it right. And the factors change every few years.
“A lot of people tend to get stuck and they develop rules of thumb as to how housing markets behave, and then they live and die by those,” Miller said.
