Clearing Up The Inventory Picture

Posted by Noah Rosenblatt on July 7, 2007 at 9.04 AM

A: Following up on yesterday's post regarding the # of new listings to hit the Manhattan marketplace each month of this year, I just wanted to provide you with some data as reported by superstar appraiser Jonathan Miller 4 days ago. Given the surprise in what I discovered yesterday, it should help better explain the current NYC real estate marketplace.

All of this is from the article in CNN Money published July 3rd.

  • Listing inventory fell 31.5% to 5,237 units compared with a year ago

  • Apartments are staying on the market a shorter period of time - 117 days on average, 10.1% less than a year ago

  • Co-op apartment inventory dropped more than 40% and Condo inventory 22%

    • And some notable quotes from the article:

  • Jonathan Miller explained that more than 96% of new product is condo, enough to offset half the inventory drop but not enough to match demand rise. "You're walking around the city and seeing all these new buildings, yet inventory still dropped."

  • "The number of sales is the highest ever for a quarter," said Miller.

  • "So many closings of co-ops were in small apartments, however," said Hall Wilkie, president of Brown Harris Stevens. The average co-op sold was 8% smaller than last year, accounting for much of the difference.

  • According to Pam Liebman, Chief Executive of Corcoran Group, three kinds of buyers are helping fuel the increase in home appreciation. "You can't underestimate the impact of Wall Street," she said. With hedge fund managers and investment bankers awash in cash, posh apartments close to work are in great demand. The second group comes from overseas. "New York is a bargain for many foreign buyers," said Liebman. Wealthy Koreans, Irish and Russians are some of the newer nationals from high cost foreign countries are drawn to the business centers and cultural attractions of the city.

    • I am posting this article today because too many readers didnt understand the inventory data I reported on yesterday, assuming that I was showing TOTAL inventory trends for Manhattan. Those numbers are way too low to be total inventory. Rather, yesterday's post was on the # of new listings to actually come to market for each month of 2007. I was curious to see the trends expecting to see a dropoff in new listings for the past few months. But that didn't happen.

    It seems sellers are hearing the call to sell in the generally slower summer months as this time around there is very little competition and still healthy buyer demand. However, there still is not enough product to meet demand giving prospective buyers a hard time. More to come on inventory trends as this story continues to write itself.

    In the meantime: WE NEED MORE PRODUCTS TO SELL TO MEET DEMAND!!

    Comments (3)

    Mr. Digs -- Not sure where your numbers are from, though I appreciate your pain in trying to get hard numbers in our too-secret world.

    The comment you got yesterday about Halstead data was probably based on some slicing and dicing form the Q2 Halstead report http://media.halstead.com/pdf/Halstead_QuarterlyReport_2Q07.pdf . The “inventory” number they report (see p7 of the report) is always New Listings, rather then total-available-for-sale, which has always bothered me, but that’s another story.

    I didn’t take a calculator to their figures, but they show *roughly* 3,500 new listings in the most recent quarter, which is more or less consistent with what you found. BUT they show roughly the same number as new for the first quarter of the year (NOT consistent with what you counted), and again (roughly) the same figure for the second quarter of 2006 (with significant variation between neighborhood and apartment size).

    Just more grist for the mill.

    I blogged about some of the data differences between the various firms’ reports this week. Miller Samuel counted 13% more sales than Halstead/BHS. Between Miller Samuel, the two Terra firms and Corcoran, there was a range of 5% to 13% on change in average price per square foot year over year. Quite a spread!

    Keep up the good work!

    Posted by Sandy Mattingly | July 7, 2007 11:35 AM

    Hey Sandy..I use TAXI for this search under the NEW LISTINGS/UPDATE search section. I highlighted the neighborhoods I mentioned, highlighted co-ops, condos, condops, selected NEW LISTING Actv, Bom, excl, coex, cbrk, and open. Apt sales. Then I simply entered START and END date and did a COUNT. I spot checked each one to make sure it only included listing start dates in dates I entered.

    Very frustrating that this isnt easier or more reliable.

    We should get together and discuss it sometime.

    Thanks & u2!

    Posted by Noah | July 7, 2007 12:27 PM

    Noah,

    Is it possible that some of the decrease in Condo inventory is from new developments that are underperforming changing to rental units? It must impact the numbers to a certain degree, right? In some neighborhoods it could have a large impact on the mubers, I would think.

    Thanks.

    Craig

    Posted by Craig | July 9, 2007 2:04 PM

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