2-MTH ACRIS Sales vs Pending Trends

Posted by urbandigs

Wed Nov 10th, 2010 09:34 AM

A: I want to thank all of you who came to my crash course last night, for all the feedback and great questions raised about the new platform. I also wanted to devote this piece to the one guy that asked about the drop in sales pace of about 30%, in October. When I went and put the chart on the big board, I realize now that I only put the month of October in there when we should have used a two or three month chart instead to see the full decline in sales volume. So, let me put up that new chart now and it should make more sense.

One of the attendees wanted to see if my real time system caught the 30% drop or so in sales pace at the end of October, as reported by many media outlets. I should have showed a chart from September or August to the end of October so we can see the relative 30% decline in sales volume, but instead I showed only a chart of October and the decline was far less. My mistake. So here you go:



So lets interpret this a bit and recall Josh Barbanel's article, "Co-op, Condo Sales Drop Off" from late October:

The sales volume of Manhattan co-ops and condos fell sharply in October, and analysts said it was likely to remain subdued through the end of the year.

The pace of closed October sales reported to City Hall as of Wednesday was down 16.5% versus September and about half the pace of sales during a comparable period in June, when sales were booming.
I am showing a 31% decline in sales volume from Sept 1 to Nov 1, as the slowdown continued into October - in line with what the attendee in last night's seminar was expecting. This is NOT surprising because our real time pending sales measure has declined steadily from a level of 2,553 on June 25th, 2010 to a bottom level of 1714 on October 7th, 2010 - a decline of 33% or so.

This decline in pending sales will LEAD Manhattan recorded sales by about 3-5 months or so as deals that were signed into contract ultimately close and are recorded by the city register. So...

1. Expect a weaker Q4 --> With pending sales bottoming for much of Sept & Oct, we don't have much fuel to fire a surge in sales for Q4. The pipeline of sales is significantly lower than it was in June-August.

2. Recent Tick UP will hit in Q1-2011
--> Our market usually slows down as we get past turkey day and into the December holidays. However, the recent tick up of new deals being signed in the last 4-6 weeks likely will close in January, and be reflected in Q1s report released April 2nd, 2011.

The good news is our real time ACRIS sales charts should show you any rise in volume as it happens so you don't have to wait until April to know what's going on in Manhattan today!