What is going on here (in Manhattan)?

Apartment sales are booming on the Upper West Side. Click to expand.

The talk around the water cooler in many brokerages these days is that the market has gotten surprisingly hot.

Such talk and my impression from searches that I have been conducting for various clients prompted my post a few days ago about the speed with which three- and four-bedroom co-ops and condos on Manhattan’s Upper West Side are finding buyers.

Today, with an MBA at my side, I decided to conduct a more thorough analysis, using statistics from the broker database (OLR).  We analyzed the number of contracts signed and apartments sold on the Upper West Side between 59th and 125th streets from Riverside Drive to Central Park West at intervals over the past year.

Sure enough, there has been an unseasonal surge in contracts signed (green) and transactions closed (orange) recently.

While the number of apartments that went under contract never increased more than 12 and went as low as one from time period to the next that we checked through last January, the total leaped by 88 in just the past week.  Similarly, the biggest rise in closed sales during the last year was 625 between six and four months ago.  But that number grew by 242 in just the last seven days.

(Of course, solds lag between going to contract and finally settling, a period that usually drags on for two or three months.)

Appealing supply is falling behind demand, apartments are selling in days or a few weeks and prices are starting to climb, often to unrealistic levels once again.

Reports from various brokerage firms already have established that spring sales were  uncharacteristically slow, while summer was unusually robust–thus the peak of 625 closings in September.

I don’t know whether past or even present is prologue, but I know that it’s pretty hard for my buyers to find what they want at a decent price these days.  Some are getting discouraged by what they perceive as the bad old days of a sellers’ market.  Others are wondering whether they’ve already missed the bottom.

It’s entirely possible, say the wise talking heads, that we’ll have a second dip in prices.  These, of course, are the same experts who failed to predict the bursting of the bubble.  This time–who knows?–they may be right.

What’s suddenly fueling the fast pace of sales?  It may be a bounce of consumer confidence.  It may be the billions of dollars of Wall Street’s forthcoming bonuses, though much of those rewards will not be in cash.  Or it may be nothing more exotic than pent-up demand as buyers have wearied of waiting for the right to time to jump into the market, perhaps while holding their noses.

Sellers must be praising the heavens, while buyers must be thinking, “This winter is the 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

M: 347-886-0248
F: 347-438-3201

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