Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1052

I was searching around trying to find data on long-term real estate prices and I came across a paper by Tom Nicholas and Anna Scherbina called, Real Estate Prices During the Roaring Twenties and the Great Depression .

Here are some stats about Manhattan real estate (from the paper) that you all might find interesting:

- In 1930, Manhattan housed 1.5% of the US population, but had approximately 4% of all US real estate wealth.

- To construct their price indices the authors randomly collected 30 real estate transactions per month in Manhattan between 1920 and 1939. The mean price per square foot in 1929 was $6.91 (year of Black Tuesday ). And the mean price per square foot in 1939 – 10 years later – was $2.29.

- Buildings containing a store at grade tended to sell at higher prices. The authors speculate that this could be because a zoning change in 1916 made it difficult to open stores in “residential” areas.

- Buildings with three, four and five storeys tended to sell at a discount. Six storeys or higher and the buildings generally had an elevator, which resulted in higher pricing.

- Manhattan real estate prices reached their highest level in Q3-1929 before falling 67% by 1932. Prices remained more or less flat during the Great Depression.

- If you bought a “typical property” in 1920, it would have retained only 56% of its value (in nominal dollars) by 1939. In fact, it took until 1960 for assessed property values in Manhattan to exceed their pre-Depression pricing.

- An investment in the stock market index during this same time period, 1920-1939, would have outperformed real estate by a factor of 5.2x.

Much of this probably seems hard to believe given the market today. Imagine waiting 40 years for the value of your property to come back.

Photo by jesse orrico on Unsplash

Who better to talk about on Black Friday than Amazon’s Jeff Bezos. Supposedly he’s now worth $100 billion .

I just finished watching this short 60 Minutes clip about Amazon from 1999. If you can’t see it below, click here .

[youtube https://www.youtube.com/watch?v=fjjUOemW-_Q?rel=0&w=560&h=315]

Amazon was founded in 1994, so this was 5 years in. Already the company had gone public and had a market cap of somewhere around $30 billion.

Now, keep in mind that this was right in the middle of the dot com bubble, but already Bezos was a billionaire on paper.

What is clear from the above clip is just how obsessed Bezos was and is on the long game (”I don’t go in for carpe diem”) and on his customers. Here he is worth quite a bit, but driving around in a Honda Accord. 

Bob Simons, the interviewer, pokes fun at him a few times for his reluctance to spend money. But Bezos says that it’s all about spending money on things that matter to customers and not spending money on the things that don’t.

That’s customer obsession.

P.S. The title of this post will make sense once you watch the video.

There’s certainly lots of buzz these days around the Blockchain and cryptocurrencies. 

Some of it is negative. 

Here is a recent New York Times article talking about how celebrity-endorsed “initial coin offerings” have created a new gold rush. Most of these ICOs are scams.

But some of it is quite promising. 

Here is a brief summary of how the Blockchain is being leveraged for the real estate industry. Many jurisdictions are already using it, or experimenting with it, for their land registries.

I’ve been writing about Bitcoin sporadically since about 2013. But I really should spend more time getting deeper into this world. Many believe it will underpin the next wave of innovation in the tech space.