Manhattan Trends Report Since November 2007

A: I only started to collect data from Streeteasy.com in late 2007, and that is when I launched my data widget and chart system. I wish I could have sealed a data partnership earlier but what can you do. Anyway, people have been asking me for data going back as far as I have it and I only had time to make the following two charts for you guys. Below are the trends for total active inventory in Manhattan & the 30-day moving average trend for contracts signed activity in Manhattan. Its always nice to know where you came from when discussing the Manhattan residential real estate marketplace. Since so many tend to cherry pick data and choose the best time range to support an argument, here is the real stuff that I had collected for just under two years now. When UrbanDigs 2.0 launches you will have many more tools available to analyze what is actually happening in our marketplace in real time. The goal will always be to keep you ahead of the curve.

Here is total active Manhattan inventory trends since NOV 2007:

As you can see from the above chart, inventory started its upward trend in early 2008 as the warning signs of the credit crisis started to flash. If you check out what happened in mid-September, there was a sharp upward move in total active inventory after Lehman collapsed and AIG had to be rescued. That was when this marketplace froze up and buyers disappeared. As I said many times here on this site, its all about the buyers! Don't let anyone fool you that the weak dollar, or foreigners, or that this is an island and supply will be limited are the main forces at work. Sure they play a role but in the end it is all about buyer confidence in the asset class, affordability, and the availability of credit to finance transactions. Should one of these dynamics dislocate we will see an adjustment in our marketplace, regardless of how weak the dollar is or how deep the foreign interest is for our inventory! We learned this lesson big time in Q4 2008 and Q1 2009.

Moving on, below is the Manhattan contracts signed trend since NOV 2007; with a 30-day moving average added to show you the general trend and smooth out the spikiness that comes with data that is influenced by little to no activity during weekends:

The 30-day moving average (black line trend) is what you want to focus on in the above chart. The moves are quite telling! If you compare the trendline to the above inventory chart, things start to make some sense. You can see how real time analytics can be an extremely useful tool for any buyer or seller in this fast paced marketplace.

You can see the sales volume fall significantly from early 2008 to the post-Lehman period between September 2008 and the fear months of February/March of 2009. In hindsight, that period of fear and very low volume was shown to be a great contrarian buying opportunity with desperate sellers hitting low ball bids to move property; now don't you think that real-time information is valuable for anyone aggressively seeking to buy at that time? Translating these charts and real time trends into buying & selling strategies is the future focus of this website.

Following the frozen period that defined the first wave down in prices, the 30-day moving average shifted from 10 or so on the left y-axis to about 35-40 or so by the end of June & July. This represented the surge in contracts signed activity that started around May and lasted for a good 3-4 months.

Since then we have slowed a bit as seasonality kicked in. Activity still seems higher than normal for this time of year but down from the levels in May & June. The chart shows that clearly. The recent surge in action will ultimately be reported in the lagging quarterly reports leading me to write about the coming qtr-to-qtr improvements. While y-o-y prices will still be pressured for a few more quarters (Q2 2010 report will have a very favorable prior year to be compared to as Q2 2009 basically defined the downturn) its the qtr-to-qtr rise in activity that will likely be the focus of the reports. In a commission based industry sales volume is the name of the game.

You want to be ahead of the curve, you keep it here!

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