Our housing market is undergoing major change

Inventory has nowhere to go but up, but don’t expect a surge. Click to expand. (Source: Miller Samuel Inc.)

The word all of us have been using to describe the housing market in Manhattan is “stable.”

Well, as any prospective buyer of a well-priced apartment will tell you, much of the market has changed in a big way.  Open houses of new listings are jammed, and that is just part of the evidence.

The chief reason is inventory that is sharply down from previous years.

Respected appraiser/data hound Jonathan Miller has pulled together some astounding numbers.  Continue reading

Don’t try this at home: analyzing comparables

The field-emission environmental scanning electron microscope (SEM) is a state-of-the-art instrument at the Environmental Molecular Sciences Laboratory (EMSL) that scientists use to examine aerosols and other samples. The samples can be studied using a field-emission source electron beam both in standard SEM and environmental modes of operation. (Flickr photo by EMSL)

Any seller can wish for a high price for the property about to be listed.

And any broker can guess at the right offering price.

That’s asking for trouble.

The truth is, Continue reading

A bombshell calling ‘the bottom’ lands online

Housing starts (Click to expand via Calculated Risk)

Bill McBride, who is a highly respected blogger on finance and economics, lobbed a bombshell the other day that has been predictably controversial.

On CalculatedRisk.com — which I check two or three times a day for his latest news, information and insights on real estate — the full-time blogger declared the following:

The Housing Bottom Is Here

He contended that Continue reading

Why is ‘boring’ housing market’s Q3 catchword?

(Courtesy of Prudential Douglas Elliman via Curbed)

Executives of the largest brokerages and those who craft reports on Manhattan’s housing market kept using “stable” to describe the second quarter.

For the third quarter, a word I’m seeing — as you doubtless are as well — is “boring.”

The term arises from some, though not all of the statistics. I’ve also noticed an attempt at “normal.”

I’m not so sure.  Variable?  Confusing? Troubling? Continue reading

Wall Street sneezed. Now what?

(Flickr photo by Mash Potato)

Few of you would disagree with the thought that the gyrations on Wall Street cannot be a good thing for the housing market in Manhattan.

After all, it is axiomatic that our market catches a cold when Wall Street sneezes.  And Wall Street suffered much worse than a fit of sneezing.  It briefly went into intensive care and, unfortunately, could be rushed there again.

I didn’t need the latest consumer confidence level, the latest statistics in the listing database or the following e-mail on Saturday from buyers with whom I have been working to know that the impact on Manhattan’s housing market has to be severe:

[We] have been discussing our outlook for NYC and we have come to the conclusion that we do not think that we want to spend approximately $500,000 for a 1/2 bath or 2nd bath.  We think that for a savings of $500,000, we can manage with 1 bathroom. . .  

This economy has made us more conservative. I thank you in advance for your understanding.

Indeed, how could I not understand, as I wrote in my response?

(Flicker photo by Diego da Silva)

I don’t see how the housing market can fail to freeze.

Consumer confidence plunged in early August, as the Wall Street Journal noted.  The Thomson Reuters/University of Michigan index for early August recorded a startling drop to 54.9 from 63.7 at the end of July and 63.8 in early July.

That is not a good, though unsurprising, sign of things to come.

The preliminary August current conditions index fell to 69.3 from 75.8 in late July, the Journal reported. The expectations index plummeted to 45.7 from 56.0.

Because it is August and little is happening anyway, I view with a grain of salt the numbers in the OLR (OnLine Residential) database.  But they may be worth a gander.

Compared with the month ended July 17, the time since then has registered what I take to be an insignificant 1.74 percent decline in the median listed price, to $811,400.  At the same time, the (lagging) number of signed contracts fell 6.14 percent, to 76.

To me, the most revealing statistic for this admittedly crude analysis is the number of listings with price cuts.  They actually plummeted by 220 to 969, an 18.5 percent change over the month.

Not so alarming, you might conclude.  But. . . but. . . fully 170 of the 220 — that is, 77 percent — of the reductions over that period occurred in the last seven days!

If you have the stomach for more numbers, consider, too, August’s angst compared with the especially accurate statistics that Noah Rosenblatt of UrbanDigs compiled for July.  He notes that only 1,168 new listings came on the market in July, the 10th consecutive monthly decline in new supply from the previous year.

Moreover, he finds a mere 713 contracts signed that month, down from 988 in June and also down from 760 one year earlier.

At the same time, pending sales — those at some stage after having gone to contract and before closing — have continued a steep downward trend that began in June.  They are down 8.7 percent as of now, though seasonal decreases are normal.

Seasonal or not, I’m wondering whether this won’t be the fall and winter of our discontent.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

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The Big Apple: CPW sale turns tidy profit. More!

She who hesitates hardly is lost

Mildred Furiya bought her townhouse in Brooklyn for $16,000 in 1966 with a cash gift from her father. Now she plans to list the dwelling for approximately $1.895 million.

A sale at that price would represent an 11,744 percent increase over 45 years — or an annual return of about 11 percent, says the New York Times.

Numbers cruncher says he’s bullish on Manhattan

Manhattan just doesn’t behave like the rest of the country Continue reading

The Big Apple: Rent market hot, otherwise warm

Manhattan condo prices have yet to recover fully

From its peak in December 2008 to its trough in May 2009, the RPX Manhattan Condominium price declined 24 percent, according to Radar Logic.

Since then, it has regained only about half of the value it lost during the crash.

As of March 31, the RPX Manhattan condominium price was $1,017.10 per square foot, which is 16 percent above its cyclical trough of $923.24, but still 12 percent below its all-time peak of $1,212.83.

Sales activity also remains well below pre-crisis levels.  Activity during March 2011 was 18 percent lower than it was during March 2008, before the national housing crisis took hold of the Manhattan market.

Although the rate of sales increased robustly during 2009, its recovery has faltered since, with the transaction count declining 3 percent over the last year.  There has been a clear shift in the concentration of sales from smaller to larger units over the last year.

Buyers are still out there and having offers accepted

Buyers continue to step up and sign deals for Manhattan property at a very strong pace, according to a new post by Noah Rosenblatt of UrbanDigs.

Finding in his excellent data Continue reading