September may be cruelest month since August

This graph by UrbanDigs shows quarterly average sale price trends.

When I visited 14 open houses from Central Park to the Hudson River and 62nd to 93rd streets on Sunday, I came away with the impression that our housing market was beginning to develop some strength

Buyers were out there, and a couple of brokers said they already had offers in hand.

Given that there were 461 open houses scheduled on the entire Upper West Side that day and my observations had to be skewed, I decided to see what I could learn from OLR, a prime broker database that fails to be comprehensive or otherwise completely accurate as broker, numbers cruncher and blogger Noah Rosenblatt convincingly argues.

A chief reason: Many brokers fail to update their listings in a timely manner (as anyone who searches, and other databases knows).

It turns out that I was in for a surprise.

Bear in mind that the UWS may not reflect all of Manhattan and, especially, that September is a weird month. The numbers depend on when Labor Day and the Jewish high holidays fall, making comparisons hard to calculate with any confidence.

In addition, larger apartments–three- and four-bedroom units and up–tend to be reserved at least until after Labor Day, and their presence can readily alter average and median prices.

Also, September is when properties taken or held off the market during the somnolent summer months show up as active listings.  And sellers who have languishing apartments and who are hoping for a return to a more robust season, may finally cut prices as they come to grips with reality.

It turns out that the average listing price for all condos and co-ops on the Upper West Side slipped 1.56 percent from $1,605,612 to $1,580,628 between August and September.  But the median price inched up 0.64 percent to $986,000.  (It doesn’t appear to me that townhouses are included; if so, they would be a negligible number.)

The average price per square foot edged up from $1,092 to $1,096, a mere 0.37 percent rise.  There were 139 newly listed apartments in August and 273 in September, nearly double the previous month.

The number of co-ops and condos that went to contract slid a whopping 20.65 percent, to 123, from August even as the quantity of new listings grew.  The result: The supply of available units dropped by only 3.76 percent, to 1,537, from then to now.

As anticipated, 206 properties had price reductions in September in contrast to 87 in August, a jump of 136.78 percent.

Aside from the factors I mentioned earlier, these other considerations may have contributed to this month’s apparently weak results:

  • The continuing standoff between buyers seeking the market’s bottom and sellers hoping for better times;
  • Bonus expectations;
  • Wall Street’s volatility;
  • Weather;
  • Consequences of the homebuyer tax credit, which advanced sales before June and closings throughout the third quarter;
  • Apartment mix, not only by size, but by price, location, type (condo or co-op), age, condition and so on;
  • Uncertainties about so-called shadow inventory.

With regard to the mix of apartments by size, I learned from OLR that of 273 apartments that went on the market in September, 63 had three bedrooms or more, fully 23 percent.  Thanks to the inadequacy of OLR, I cannot compare the figures to August, but that 23 percent represents a significant proportion of properties for sale.  Their average price was $4,939,339.

A total of 185 one-and two-bedroom co-ops and condos were listed this month at an average price of $1,154,308, so you can see how distortions easily can occur.

The number of closings has nosedived so far this month, off 31.16 percent, from 199 sales in August to 137 in September.

Unfortunately, I don’t see how the numbers add up to anything but a generally wan housing market. September has proved to be cruel indeed.

There will be a blizzard of quarterly reports on Friday, and I’ll be updating my blog with their contents that morning.

But don’t count on any particularly useful information: They won’t provide you with a scintilla of data about Manhattan’s housing market this minute.  What you’ll get is a lot speculation of based on nothing close to science.

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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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