Inventory Trend Check: July Slowdown
A: I decided to do some research in inventory trends, and specifically new listings (condo, co-ops & condops) to hit the market in the most popular neighborhoods of Manhattan for every month of 2007. I was curious to see how inventory has changed since the frenzy months of JAN - APRIL and today. Now you must keep in mind that this chart ONLY shows you the # of new listings to hit the market for each month of this year and NOT the total number of active listings on the market. Unfortunately my internal systems are not accurate in producing this data leaving me left to report on what data I have access to that I deem reliable. Of course, there is no way for me to check every single piece of data to verify its reliability, but I did do spot checks on each month to make sure listings fit into the criteria I set; and I found it was fine!
Neighborhoods included: Beekman, Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village
Conclusions: Hmm, very interesting and NOT what I would expect. With inventory so tight right now, I would expect to have seen a decrease in new listings hitting the market in the months of May, June and July; which led to the tight inventory environment we see today. Instead, I see a consistent increase in new listings hitting the market with a peak in June. It appears there will be a HUGE dropoff come the end of July as only 108 new listings have hit the market so far this month. Part of that is obviously due to July 4th holiday but come the end of the month I expect total number of new listings to be significantly lower than the 1,190 registered last month!
Inventory right now seems very tight to me. I am having trouble finding good products for all my buyers, who range in budget from $500,000 to about $2.4M. This is something I am used to working in Manhattan real estate, but this environment seems especially tough. Good products that are priced right are selling fast while high priced products don't seem to be cutting their prices as quickly as one would hope. The reason probably is that with such tight inventory, even overpriced listings are getting good traffic; and with good traffic comes stingy sellers unwilling to aggressively lower their price.
I wish I could find out the actual number of contracts signed per month for this year so we can see how that trend compares to the # of new listings that hit the market. It would also be very helpful to have an idea of TOTAL ACTIVE inventory for each month of this year to see if there is in fact a dropoff in the months of May & June. One thing I can tell you, is that the frenzy months of JAN - APRIL did produce great sales volume that removed alot of inventory from the open market; one contributor to today's tight inventory problem.
Posted by sam
Fri Jul 6th, 2007 12:21 PM
I received a advert from Halsted. The stats showed that in the UES 2 bedrooms dropped 10% in price and one bedrooms 5% in price. This isn't consisten with your posts and I doubt Halsted would be sending out that information if it weren't true or probably worse. How do you reconcile your experience with huge traffic between sept-april and these stats?
Posted by Noah
Fri Jul 6th, 2007 12:34 PM
First off, I am not sure WHERE Halstead gets there stats? Second, there was a report out on NY times where it stated a 28% increase in condo prices from this time last year. Now this is prob due to very high end skewing data, I do NOT see anything consistent with a 10% price drop in UES 2BR's and 5% drop in 1BR's. No way.
http://www.nytimes.com/2007/07/03/nyregion/03prices.html?_r=2&ref=nyregion&oref=slogin&oref=slogin
Can you provide link to where these Halstead stats are published? Is it based on TOTAL market anaylsis or only Halstead transactions?
Honestly, data can be presented in a number of ways. The data I published here was VERY suprising to me, and I thought it was because the system was wrong, but I checked about 75 times in total and all came out fine based on criteria I entered. This led me to assume it was accurate.
I saw HUGE traffic in the months of JAN - APRIL. In May I started noticing a slight slowdown in buyer activity. Now, I see that same level; surprising that it didnt slowdown further in past 6 weeks or so like it normally does.
Take it for what it is, and opinion of mine. I see very tight inventory and prices still high. I do not see price drops. And I ask you, if you see such great deals because of 10% drop in 2BR's, please show me where they are.
Thanks
Posted by Craig
Fri Jul 6th, 2007 02:13 PM
Noah,
Maybe I am confused, but unless more than 3,039 apartments in these neighborhoods have been sold in the past 3 months then the inventory is growing, as it is not keeping up with the influx of new apartments in the market. As for tracking apartments that go into contract, this is again a faulty statistic because not all apartments that go into contract get sold at that point. I believe the industry standard is what, around 20% that go to contract but not to completion? These apartments are then put back on the market, but they are removed from the inventory listing and counted as SOLD, even though they are not. In fact, the same apartment could then go into contract again and be counted for 2 sales even though it is no longer in the inventory numbers! This completely skews the numbers and artificially creates a sense of "tight inventory" in the marketplace and I am sure that 90%+ of people looking for an apartment don't know this. I use that phrase ("tight inventory") because you happened to use it 5 times in a 3 paragraph sequence....sort of like "getting the message out there".
I think that you do a great job of balancing the industry, but more people need to understand that the numbers that are touted created more of a sense of urgency and "tight inventory" in the market than there really is. I don't think this disparity completely explains away inventory numbers, but it should be a clear part of the discussion each and every time the subject of inventory is brought up and it is not.
Finally, I hope that you and your family are doing well and I offer my condolonces on your dad.
Thanks.
Posted by Noah
Fri Jul 6th, 2007 03:36 PM
Hey Craig,
Thanks!!!
In Manhattan, I do not think it is 20% of signed contracts that do not eventually get sold. I think that number is significantly lower; even accounting for board turndowns and not able to secure financing. I wouldn't venture to guess, because I have no idea, but I would think its lower.
You bring up a great point: "...but more people need to understand that the numbers that are touted created more of a sense of urgency and "tight inventory" in the market than there really is."
I agree. In this case, the report is on # of NEW LISTINGS coming to market and NOT Total Active Inventory for those neighborhoods. I cant get that data because that search section has a max of 300 listings. The one I used does not have a max so I can see real numbers based on neighborhood and time frame and property type and search type.
In my opinion, there is very little inventory out there and this research surprised me. Nevertheless, I decided to post it up. I would love to know #'s of contracts signed during these months and total inventory to get a clearer picture.
Posted by john
Fri Jul 6th, 2007 10:57 PM
Do you include new construction in your inventory?
Also, why is it to so hard to get these numbers in Manhattan. Every other place, inverntory numbers sales numbers etc much easier to get . No wonder so many peopl distrust numbers that are put out there. The only transparency I see is provided by your blog. keep up the good work...
Posted by Noah
Sat Jul 7th, 2007 08:20 AM
John,
No public MLS here in Manhattan. Because the brokerage systems I use are antiquated and serve no purpose in bringing in more money to brokerage houses to provide this data to agents. The purpose of these systems is to provide property searches and data regarding the listing; not past or present analysis on the whole market.
There is a max of 300 search listings for most search types which doesnt allow me to see the whole picture. The search I used for this doesnt have a max, which is why I did this type. Sucks I know. Perhaps in the future I will work to bring these types of reports to you.
Thanks! Trying my best to make it more transparent for you guys!
Posted by huh?
Sat Jul 7th, 2007 01:56 PM
July is not over yet dude. Run the query again at month end.
Posted by Noah
Sat Jul 7th, 2007 03:47 PM
huh? - no shit. Didnt you see that I said...
"..but come the end of the month I expect total number of new listings to be significantly lower than the 1,190 registered last month!"
I will check at the end of the month and post it here. There was no reason for me not to at least show how many new listings hit the market thus far when I posted.
1 week in - 110 listings or so..Times by four and chances are we will get around 500 or so new listings for the month, a 55-60% decrease or so from June if it works out that way. We'll see.
Posted by huh?
Sat Jul 7th, 2007 04:53 PM
urbandigs, I saw what you said, but I also saw the huge graph at the top of your post that misrepresents the data you gathered. The graph indicates that you gathered data for all of July, when in fact you only have a few days worth. And the little data you do have is gathered from a holiday week.
July inventory may be down, but let's give it a couple more weeks and then have that discussion.
Posted by Noah
Sat Jul 7th, 2007 05:49 PM
huh - I cant argue that with the exception that given the post was published July 6th, I assumed readers will know that it doesnt include the remainder of the month that has not occurred yet.
In my mind, how can you misrepresent if you explain that you included only the first week of the month and are anticipating a decline from what is seen so far. Plus, Im out in the field everyday. There is very tight inventory. So, to include July in the graph means giving readers as much info as I had access to up to that point. I pointed out holiday and rest of month in paragraphs after graph. People just need to read and use some common sense.
Im putting my money on a significant decline come the end of the month..lets see how it pans out!
Posted by sam
Sun Jul 8th, 2007 12:05 PM
Noah
I am not in the realestate business, I got an advert in the mail. Just sharing that with you. I have a hard time believing that a realtor company would put out that information if not true.
Seems contrary to their business goals.
S.
Posted by Noah
Sun Jul 8th, 2007 03:36 PM
not saying its not what they found, Im just saying that data can presented a number of ways and obviously other firms data vary. Its clear inventory has dropped and that co-op prices only showed some minor declines. Condos rose.