Manhattan Inventory Trending Higher
A: UrbanDigs Charts, powered by Streeteasy, are still in BETA testing and will be for another few months. Still, the TOTAL ACTIVE inventory category is interesting to keep tabs on since early November. The data includes listings of co-ops, condos, and townhouses for the entire island of Manhattan where the full address is included in the listings and duplicates removed. This way, none of the open listings (W 70s, LUX New Dev, UES 1BR, etc..) spam is included in the data collection!
NOTE: Way too early to put any significance into this and hard to analyze without a longer time range in the charting system. I'll upgrade functionality of charting system once we are out of BETA testing in another 3 months or so! The goal will be to have a more real time gauge of what is going on in Manhattan real estate, so we don't have to wait for lagging quarterly reports! Use at your own risk right now.
Here is the chart showing you the generally upwards trend that total active listings inventory in Manhattan has done since the start of 2008:
Now, we had about 6,000 total active listings in DEC of 2006 and about 4,800 total active listings exactly one year later showing a decline of about 20% in our inventory. Over the past 4 weeks or so as we entered the wall street bonus season, it appears that listings rose about 8-10% or so; again, this is 4 weeks of data and not enough to warrant any conclusions from.
The purpose of this is to simply report on the rise, to state that it is completely normal for inventory to rise at this time of year, and that it will probably continue to rise as more listings come to market. The key factor in my mind to watch out for is sales volume as an indication of buyer confidence given the current macro environment and stock market selloff as a result. Should buyer confidence continue to fall, expect sales volume to be light and inventory & time on market to rise a bit; especially for those properties that are testing the market and pricing significantly above last years comparable sales! All worth watching!!
For those of you actively looking to buy a property, what are you seeing?
Posted by karim
Wed Jan 23rd, 2008 11:16 AM
Noah,
Thanks for the good job.
I am watching closely the manhattan market on streeteasy.com.
What I see is property staying longer and longer on the market. I see price drop. Some are ridiculous (the seller is playing some kind of game hoping to sell at two years ago prices) but some are such that they are really trying to adjust to the reality of the market at this time.
I am looking for a about 800sqft 1BR in Upper manhattan above 100th street on the west side and price are falling to something more reasonable. I believe they will continue to fall until income and price adjust.
HDFC are staying longer because of the income restrictions, flip tax, all cash deals etc...
Posted by Noah
Wed Jan 23rd, 2008 11:26 AM
good stuff Karim..thanks
Posted by robocop
Wed Jan 23rd, 2008 01:20 PM
As a soon to be seller of a 1 BR on the ues and active buyer of 2/3 BR on UES. I have seen an amazing low co-op inventory in the past 14 months. This continues today. Consequently co-op prices are almost overpriced versus a normal inventory market. The weakness I see is very clearly in the existing condo (non new development) market. Prices have been falling for the past six months and inventory is not bad. (prices are close to co-op levels here). A nice existing condo building is selling at $1100 to 1000 a square foot on properties east of 2nd. Some sellers here actual seem desperate (unlike the co-op market). I expect that to change when inventory returns. Strongly considering renting for a year then buying.
Posted by Steve
Wed Jan 23rd, 2008 02:27 PM
Robocop,
I don't agree, inventory is tight, the Fed is determined to jumpstart the economy(futures market pricing in 80+% of 75 basis again next week?). We may see short term and I do mean short term economic weakness but this is shaping up to be 2003 all over again. Mortgage rates are dropping for non and conform as we speak and the market is stabilizing. If anything the second half of the year will show the FED EFFECT..strong growth with asset appreciation. I would be a buyer of condos not a seller. But hey that's my opinion and I should disclose that I own Manhattan condo rentals. Good Luck.
Posted by jeanette zwart
Wed Jan 23rd, 2008 02:32 PM
Ihave been shopping for a nice-sized 1-br or 1br+study in Brooklyn for the last few months --focussing on condos (for the flexibility) in a full sevice building. To get the best construction and finish quality, we looked more closely as conversions, vs new construction. There was not much out there in Park Slope, the Heights, Cobble Hill, or Dumbo if new construction is factored out. (We just put a deposit on a really nice apt in the Heights -- tho the timing is now brining on more than a little anxiety!) We will be selling our 2br coop in Park Slope -- true comps (park block, historic district,great school district, prewar details, outdoor space) are very scarce. I am very nervous about selling given the market, but slightly encouraged by that fact. I think the market for new construction does tend to be somewhat distinct from the market for pre-existing or conversions, whether coop or condo, so not sure why Robocop sees a larger desperation factor from condo sellers?
Posted by Anonymous Banker
Wed Jan 23rd, 2008 03:46 PM
As a potential buyer of a 2 bedroom in downtown Manhattan (anywhere below 14th on the east side), the market seems to be in wait and see mode.
Buyers are looking at the markets and pausing to assess whether the market will plunge.
Sellers seem to be looking at the markets and hoping that the market isn't going to go south. There doesn't seem to be any significant repricing going on. Perhaps rightly so given the lack of inventory.
I've been running a search on price changes on StreetEasy on a daily basis for the past 3 months and I'm seeing no discernable uptick in the number of price reductions.
Either way, I'm starting to get more bullish from an affordability perspective. 3 months ago a $1.4mm jumbo ARM would have cost me 6.125% or $85,750. This same mortgage is today 5.125% and $71,250. Another way of looking at it, I can buy a $1.4mm mortgage today for the same cost as a $1.163mm mortgage 3 months ago.
NYC property is getting cheaper even if prices aren't falling.
With another 50 or 75 basis point cut at the end of the month, the market will be primed to sell. Runnning the math on 4.75%, a $1.4mm mortgage would cost $66,500 (or $47.5k after the impact of tax deductibility on the 1st million).
Buying will be much cheaper in real terms and the market will be primed to sell.
Posted by Steve
Wed Jan 23rd, 2008 04:02 PM
Look at that market!!!!!! Don't Fight the FED
Posted by Buyer
Wed Jan 23rd, 2008 07:14 PM
Well, I don't know if I count, but I was a buyer over the last 6 months, when practically everybody told me not to buy. There is no inventory (inventory could double and still not meet demand), and NYC is a global city, cheap on a worldwide basis. Mortgage rates are heading down, retirees and foreigners want to live here, and just try to buy a sunny family 3-bedroom apartment over 1750 sq feet near transportation in a good school district without a bidding war, so you don't have to die of boredom in Westchester or Long Island. Just try. You can keep looking, but the doom and gloom market timing advice given here rarely works. At any rate, I got mine in the last 6 months, so good luck to everyone else out there looking to own a piece of Manhattan. I wanted lower prices also when I was buying, but if wishes were fishes ....
I work in finance, and I know all about price to rent ratios , historical averages, etc. I have friends who sell mortgages in Florida (aka Armageddon). But Manhattan has worldwide demand and no inventory. Supply and demand sets prices. You do the math.
Posted by Noah
Wed Jan 23rd, 2008 07:33 PM
all valid points Buyer! Inventory is still very tight and there are buyers out there! Not arguing that at all; its just confidence that Im saying has dropped..
Steve - yea yea..I know, people told me that when fed cut 75 bsp the last few times in late 2007, and the market went to 11750..we must expect a tradable bounce after a 17% drop!
bounces are sharp and short in bear markets. Lets see what happens to this one to see if we are in a bear market now! Plus the rally was because of rumour that NY State Insurance assoc is trying to put together a bond insurer bail out package; NOT because of rate cut Tues morning! Rate cut helps, but that was clear sign that things are bad out there.
Posted by Anon
Wed Jan 23rd, 2008 08:14 PM
It's true that interest rates are coming down so that apartments are getting "cheaper", but as inflation picks up, the actual value of that apartment will also be lower.
Is this just imaginative thinking or is it possible that the fed is cutting rates at the cost of inflation so that to the average American, it won't seem as though housing is "falling" as much even though the actual worth in terms of buying power is down?
Posted by Buyer
Wed Jan 23rd, 2008 08:18 PM
Early bird gets the worm. I also bought an estate sale in Manhattan a few weeks after 9/11, so I must like ignoring other people's advice. If you wait until everybody is comfortable, the price will be higher!
Personally, I jumped on the first semi-reasonably priced place I could that met my family's needs. Amid all this falling prices talk, where are the family apartments near transportation with good light? Mine won't be for sale for maybe 20 more years. If someone is selling theirs' cheap, please link the listing.
Posted by Noah
Wed Jan 23rd, 2008 08:23 PM
Anon - No, homeowner's want inflation! Hard asset prices rise in inflationary environments. Its deflation you have to be scared about! As for rates, careful cause they are not directly linked to FFR, and are higher in this environment due to credit crisis. Low bond yields & FFR means uncertain economy!
Posted by Noah
Wed Jan 23rd, 2008 08:31 PM
Buyer - I bought in Nov 2001 as well, and everyone told me I was nutz! Opportunity baby!
This time is different though. Prices appreciated 100% in 5 years, and this crisis is fueled by housing and other debt defaults where leverage is 10x higher than it was after the dot come bust! Housing is illiquid and this pain will be around for a while and plenty of dead cat bounces in equity markets along way.
For Manhattan re, no sig correction until you see fierce seller competition, and that means a sig rise in inventory to 6,500-7,000 from where we are now!
Posted by uwsider
Wed Jan 23rd, 2008 10:21 PM
Start of forclosures in prime Manhattan? 3.7M condo in downdown:
http://www.brownharrisstevens.com/detail.aspx?id=564551
Wonder how many more fools are out there...
Posted by Noah
Thu Jan 24th, 2008 07:33 AM
uwsider - whatever you do dont tell this to the streeteasy forums! Spunky and eah will have a hissy fit
Posted by anon
Thu Jan 24th, 2008 09:22 AM
Noah - I know open houses have picked up. Not unusual for this time of year. How do they compare to open houses last year at this time and what are you seeing from a bidding standpoint? Are there bidding wars?
Posted by anon
Sun Jan 27th, 2008 12:25 AM
To: jeanette zwart | January 23, 2008 2:32 PM
Big mistake putting deposit down on property without selling your existing property. Perfect example of someone going without a broker. Knowledge is power -
Posted by anon
Sun Jan 27th, 2008 12:28 AM
Anonymous Banker | January 23, 2008 3:46 PM
Most intelligent post I've ever read on this site! Remember though, a home is a home, not an investment. The more it works for you as a home, the easier it will be to sell when your ready to get rid of it. I don't care what any number crunchers on this site says.
And that's right, I'm a broker - and I don't make my money on 1brs.
Posted by anon
Sun Jan 27th, 2008 12:37 AM
-- Buyer | January 23, 2008 7:14 PM
Another sane comment! Congratulations. Someone needs to call Noah out! All this doom and gloom he says is just not true. As he says, he's an equities trader with a passion for real estate. He is not a buyer or a seller or a broker doing tons of deals. This site truly lacks what is happening on the street. And the constant brandishing Manhattan data without segementing it into East Village, West Village, or even by streets - just totally misses the point that real buyers and sellers are dealing with daily.
Yes, I'm a broker and yes, its going to be tough for brokers but not anyone repping anything of any value. And if the property has no value, its the broker's responsibility to get the right price, given the doom and gloom market.
If you're a real buyer with good credit, as Anonymous Banker says, you can get a great rate, and that is how prices are coming down, not by silly streeteasy!
Streeteasy, what a joke. So what if some loser broker took a high listing and now is dropping the price. 30 percent of these losers do that everyday. It has no bearing on you and your search for a perfect home for your family.
A home is not numbers. A home, is a home. And when you're wife is pregnant, or you want the right school district, and you don't want to move to Montclair, its going to be difficult and it will take some work.
My advice, fine a good broker and work them. Noah is an equities trader with a passion for real estate.
P.S. I love this site.
Posted by Noah
Sun Jan 27th, 2008 12:14 PM
anon - why do you just assume that I do not service my real estate clients properly?
Damn you people! Any discussion of actual reality and everyone that may be at risk, gets personal! Anon, its great you love the site, but at least admit that what I am discussing is ACTUALLY HAPPENING!
Problem is, people immediately interpret that to think that I expect Manhattan to fall 50%. Its just not true.
Why is everyone so scared to admit that Manhattan real estate is a market, and just like any other market, it could fall a bit! Mention these words in any way, and all of a sudden, Im not a real estate agent, Im an equities trader with a passion for real estate.
Posted by Noah
Sun Jan 27th, 2008 04:02 PM
anon - "So what if some loser broker took a high listing and now is dropping the price. 30 percent of these losers do that everyday."
So, you are condoning the fact that brokers LIE to sellers and promise then high prices to get the listing, and worry about reductions later?
This practice is SO common in this city its scary. I just went on 2 sales picthes in past week, and both potential sellers said the price quotes from other brokers were easily $150/sft HIGHER than the last comp in the building. So, the seller asked, don't you think thats stretching it a bit? The seller then tells me that the brokers response, at both places was: "I deliver marketing services above and beyond other brokers, so I get my sellers a much higher purchase price"
WHAT A CROCK OF SHIT AND A TOTAL LIE!
Say what you want about my views, my correct views on what is really going on out there, but at least I am an honest broker who tells it like it is, and says the things that may blow a deal hear and there! Ill take pride in that. Too many used car salesman out there bullshitting buyers/sellers to get their commission with no intention of their interests other than to provide them with a paycheck at closing
Posted by anon
Sun Jan 27th, 2008 08:28 PM
Not condoning anything, just saying that this happens everyday by brokers that can't get the price they promise.
Yes, I believe there are brokers out there that work hard to get the price they promise and some are better than others.
Not a lie at all, just some see RE as a full time job, not as a passion.
an honest broker. . . HA! - Just a equities trader with a passion for real estate.
No one is bullshitting, come on there are major brokers out there who know how to get a higher price per square foot than you and probably me -
Well maybe not me. . .
Posted by anon
Sun Jan 27th, 2008 08:30 PM
I notice you didn't make any comments about my correctly telling the co-op brooklyn buyer/seller she made a MISTAKE putting down money on a new property without selling the current one -
That's call professional advice -
Second,
I notice you didn't comment about the real lack of inventory that readers right on this site are talking about, while you dribble on about the numbers on Streeteasy.
Posted by Noah
Mon Jan 28th, 2008 08:00 AM
anon - your the best broker out there buddy! And I advised clients before to sell their property first before signing the contract for an upgrade/new place.
You call it professional advice. I call it fairly entry level intelligence with a spot of honesty by the broker to advise they follow common sense. You really think that pushes your status to a ultra professional? Come now!
I work my a$$ for my seller clients and I spend my own capital in addition to my corporate budgets on targeted marketing. To assume this is just a passion and that I service my clients half-ass is pretty ignorant of you!
Why dont you just stop reading this site! Obviously you dont get that there is a macro component that goes outside Manhattan re...
As for inventory, I've admitted time and again on this site for over a year now that inventory is very tight and that without fierce seller competition you will not see significant price declines. Oh wait, you just ignore that part!
Go away! I dont need brokers like you coming here and telling me that I dont work hard for my clients.
Posted by Noah
Mon Jan 28th, 2008 08:09 AM
Anon - look at this listing at Corcoran:
http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=1046395
I got this seller 2.3M in 2007 and they rejected. They said Citi-hab couldnt service a high end listing. They gave it to Corcoran and the agent promised 2.6M. So they list at 2.595M.
Now its at 2.2M, and rumor I heard (I know a family member of seller) is that they accepted 2M.
How do you respond to this besides the market was much better 10 months ago? And if you do respond that way, than you prove my point of declining buyer confidence.
This broker blatantly lied and promised a unrealistic price. Caused the listing to be on market for 4-5 months with drastic price cuts. Now, they blew 300K.
I worked my a$$ off selling this property and negotiating on my clients behalf to get 100K over ask! And it was only 1 bidder. Another shady broker using her reputation to promise a unrealistic price gets rewarded! I delivered 300K more, and I wasn't rewarded! Real life anon.
Posted by noah sold my apt
Mon Jan 28th, 2008 10:10 AM
hey anon - obviously trashing Noah because he is talking his mind and building a great site here is pissing you off.
Noah sold my apartment in midtown west last year, consulted on what work to do before hand, convinced me to spend 20K less than I was willing to, and got a bidding war in 2 weeks and a price I was very happy with!
Even today prices seem to be a bit lower than what Noah got me. Why do you say he is not professional and does not take his job seriously? Did you ever work with him on a deal? Do you see how he handles open houses and his seller clients? What are you basing that on other than pure opinion?
Posted by anon
Mon Jan 28th, 2008 10:28 AM
Noah is not pisssing me off, I like him and I hike this site.
I don't like the macro economic advise that has very little relationship to real buyers and sellers in Manhattan and I believe that NYC real estate should always be talked about on a very very local, almost block-by-block context.
Lastly, my point is proven even in Noah's attack of me about the {look at Corcoran listing)
No Seller should ever compare selling their unit by what Citi-Habitat or Cororcan or Elliman Or Halstead or Bond NYC tells them. That's foolish and in fact, it mirrors macro-economic thought thats always po-poooed on this site.
A seller should always go with the broker, the relationship of the broker, the rep of the broker, the drive of the broker, and pay little attention what company they are at. Secondly, Corcoran and Citi-Habitat, have the same parent owner, to exemmplify my point further.
There are major brokers at smaller firms that you may never have heard of: Edward Lee Cave is a boutique firm on the Upper East Side that does millions and millions of sales and doesn't have a cool website like the above, as they rely on relationships - Not macro economic numbers.
Posted by Noah
Mon Jan 28th, 2008 10:55 AM
point made anon - I dont agree with the macro side, but I do agree that good talent, and great brokers could be found at even small and less reputable firms.
you attacked me and when you said: "My advice, fine a good broker and work them. Noah is an equities trader with a passion for real estate."
it is easy to interpret that I am not a good broker, dont work with me, that I am a trader who just enjoys real estate.
Whatever..no need to drag on. To be truthful, many top producers are great marketers and salesman/saleswoman...and they don't need to have any knowledge about general macro economic fundamentals. Im fine with that, just like to service a different target buyer/seller who wants this consulting
Posted by anon
Mon Jan 28th, 2008 12:45 PM
Come on Noah, don't get down!
Howard Stern was great when he had Tom, his boss to rail against everyday,
Now he's just O.K.
I'm just trying to stick it to you a little, this site becomes a little self serving -
and by the way, my economist girlfriend dumped me years ago.
Posted by Noah
Mon Jan 28th, 2008 07:58 PM
ha! not down at all bud..enjoy having you here!!
keep it coming!