Power Thursday - Manhattan Markets on Fire

Posted by urbandigs

Thu Feb 24th, 2011 09:24 PM

A: Sorry for the slow posting week, Ive been swamped the last few weeks. In terms of pace of demand, the Manhattan market is en fuego. I've been watching the 30-Day pace of new contracts signed for a while now and the last few weeks has seen a sustained rise in the trend. Today alone our Manhattan residential sales tracking system has booked over 70 fully executed contracts; pushing the 30-Day pace to over 930 newly signed deals. This is up from the mid 600s at the start of the month and on pace to beat out the same period of last year.

Here is a chart showing you the last 2 years of Manhattan Monthly Contracts Signed:

FEB2010-manhattan.jpg

Notice how we booked 849 new contracts signed last February. So far, the closest thing we have to how this February is trending is the 30-Day Contracts Signed in our Real-Time Listings Ticker.

Note: It's always best to view the markets on a year-over-year (y-o-y) basis to account for seasonality.

Looking back at this time last year, I would definitely say that the 2010 'active' season (lets put the Manhattan 'active' season between January-May or so) was strong. We had three consecutive months of 1,000+ new signed deals (see chart above) between March and May. When the markets see that kind of activity, most brokers, buyers and sellers out there feel the change. To me, the markets feel this way right now. Whether or not we can sustain it for another 2-3 months like we did last year is the question.

Here is another look at the Manhattan Market ticker with 1 more ROLEX update left in the day - notice the 71 newly signed deals today and the 30-Day pace rising to over 930:

feb2010-ticker.jpg

Expect the Pending Sales line chart to continue to move up in the coming week or so. As for ACRIS sales, it seems like its starting to turn up but not the way I would expect it given the recent rise in the pipeline of deals yet to close. I still expect the pace of actual closings to rise in the coming months, fueling stronger quarterly reports in the future. Time will tell.

I'll try to put some charts on the price points and strong neighborhoods up tomorrow.


Mid-Month Manhattan Market Ticker

Posted by urbandigs

Wed Feb 16th, 2011 09:13 PM

A: Last time we checked in on the real time ticker was 8 days ago when I said, "the rising 7-day figure of new contracts signed reflects a good 2-3 weeks of action". What I see now is a sustained rise in the pace of new contracts being signed since then. I'll put the ticker from February 8th up against the ticker as it looks now so you can see whats happening out there in the field.

REAL-TIME MANHATTAN MARKET TICKER


TICKER-CHECK.jpg

Compare apples to apples and remember that this is as real-time as we can get on the Manhattan market. As brokers update listings from ACTIVE to CONTRACT SIGNED in Rolex, we capture the status changes in real time. Watching the 7-Day (red boxes) and 30-Day (blue boxes) trends will naturally give you a pulse of when the markets are ticking up and down.

Since the last check in the pace of new contracts being signed has continued to rise. All normal for this time of year, but still, nice to have something to quantify and measure it. Lets see how the pace compares to the same period in prior years and whether or not 2011 can match the great action saw in 2010's bonus season!

Here is a look at the Monthly Pace of Contracts Signed in bar chart form, so you can visualize trends w/out seasonality:

feb-2010.jpg

In February 2010 we booked 849 contracts signed. As of now the 30-day trend is at 831.


Dollar Volume of Manhattan Sales Charts Live

Posted by urbandigs

Wed Feb 16th, 2011 03:29 PM

A: Okay, here is the first view of the total dollar volume of Manhattan residential sales; direct from Acris. Please keep in mind that there is a lag between SALE DATE and FILING DATE with Acris. Generally this lag is between 2-4 weeks, but sometimes for whatever reason, sales will not be recorded for a bit longer. In other words, sales recorded today and tomorrow could have actually sold back in January. Therefore, when it comes to creating bar charts for Manhattan monthly dollar sales volume we had to delay the charts by a month. December's data went live February 1st, and January's data will go live in March.

Subscribers can track Manhattan's Monthly Dollar Volume of sales by clicking on the 'Broker YoY' (Year-over-Year) tab in the Charts Section. Then, in the dropdown menu simply select the 'Sales Volume (millions)' chart and hit UPDATE. Here is a visual of how to access this new chart:

sales-vol-menu.jpg

As it is now, when you hit the MAX button it only goes back to 2008; when we actually have data going back to 2004. For now until this is fixed, to get the full sales data back to 2004 please just change the time range manually above the chart in the date-range input box and hit UPDATE.

DOLLAR VOLUME of MANHATTAN SALES SINCE 2004 (in millions)

acris-sales-2004.jpg

That's quite a chart! Readers should keep in mind that sales lag by about 3-6 months and are exposed to development/condo conversion booms. Thinking back to the boom Manhattan had in 2005-2007, think about all the high priced new development units that went into contract but did not close until building completion some 1-2 years later. That is why the peak dollar volume shows up in both 2007 and 2008.

Good stuff.


Near Term Plan - New Charts, PDF Reports

Posted by urbandigs

Mon Feb 14th, 2011 10:30 AM

A: Just wanted readers and subscribers to know some of the stuff we have been working on lately. In the next few days, we will roll out some new charts: Absorption rate, ACRIS dollar volume, Sales Price trend bar charts. Days on market charts still have some integrity issues that need to be engineered - and I don't want to publish any charts unless we are confident in the data behind it. Finally, we will start working on a PDF white labeled report feature for subscribers.

In the next few days, we will roll out:

1. Absorption Rate Charts - Absorption rate is a very interesting metric to follow. The formula for absorption rate varies from mls to mls, but the gist of it is basically the same. The idea is to see how current sales pace relates to current inventory levels so that we can get an idea of how quickly units are being absorbed (sold).

The variations in the formula usually come from how one defines a unit of inventory? Is it ONLY active listings? Do you count PENDING listings? The average person/broker you ask will likely say initially that pending should not be counted as active. I understand this, but the fact remains that pending sales are a unit of inventory until it closes. By including pending w/ active it balances out the formula in the long run so that the chart is more useful for those trying to find out the 'heat' of the market. By not including pending, its more of a 'Months of Housing Supply' chart than an 'Absorption Rate' chart.

I like this formula best:

absorptionrate.jpg

..where pending sales are counted as units of inventory. We hope to apply Absorption Rate bar charts to neighborhoods as well. Unfortunately, applying to sub-markets will get very tricky as there is not enough data to make for a meaningful analysis.

2. ACRIS Dollar Volume Charts - We will create bar charts that show you the total dollar volume of sales on a monthly basis. This will allow us to gauge the health of the market, especially the higher end. It will also allow us to see how this market has changed since the credit crisis and post-Lehman's bankruptcy where we know the high end got slaughtered. I think this could be one of the more important indicators as to the health of the Manhattan residential marketplace.

3. Median Sales Trends in Bar Chart Format - I never liked the current NEIGHBORHOOD SALES tab in our charts section. Median sales trends, even with a 90-day moving average, are highly lagging and flawed. While its better than using AVG sales trends that are more exposed to outliers, median sales trends are exposed to 'what types' of properties are selling at any point in time. If for 1-2 months most of the sales are one bedroom apts and then for the next 1-2 months most of the sales two-three bedroom apts, you will see wild swings in median sales trends that the user may interpret incorrectly. Is the market really moving up 8% and down 6% every month? No. Going real time amplifies this noise. So, to make the sales charts more meaningful, we will update them to bar chart form and first try it on a monthly basis. As it is now, brokerage firms report sales trends on a quarterly basis.

I think these 3 new chart types will be a perfect compliment for our real time Active, Pending, and Off-Market trends that we currently have. The next feature we will work on is for reporting.

PDF REPORTS --->
We will build a white label feature into subscriber accounts where the user can upload a head-shot and contact/brokerage information. Then we will build a PDF report tool for our charting system. When a subscriber wishes to print out a chart, it will be in full PDF format and white labeled to the subscribers brand. We expect this PDF tool to be released in about 3-4 weeks.

After this, we will halt work on the 30-item to do list and begin work on what we are calling Phase 2 of UrbanDigs.com. As it is now, this site is maybe 55-60% complete. Give us 4-6 months and the mission will be complete. Then it will be about making the site more engaging and making the user experience as positive as it can be. All in time.


What is up with ACRIS? Manhattan Sales Pace Diving...

Posted by urbandigs

Mon Feb 14th, 2011 09:57 AM

A: Since this is our first time with these real time tools, there is bound to be a bit of a learning curve with how certain charts work together. I am referring to correlations between Manhattan Actual Sales and Manhattan Pending Sales. As it is now, actual sales are diving! This is not what I expected since seeing a tick up in pending sales in Q4 of 2010. By now I expected the pace of actual sales to start to rise - but it's done the exact opposite so far in 2011.

What I know ---> Pending Sales tanked in late summer and early fall 2010 setting up a miserable Q4 for actual sales. With the pipeline of deals squeezed, there simply was not enough fuel to fire a rise in actual sales. The result was a weak Q4 report from the prior quarter across the board.

What is surprising --> The pace of new contracts being signed (pending sales) started to rise in late October, early November. It did NOT go nuts, but it rose from depressed summer levels. I expected this rise in demand to fuel a future rise in actual sales sometime in late January. So far, the exact opposite is happening.

MANHATTAN ACRIS SALES (green line) versus MANHATTAN PENDING SALES (red line)

what-is-up-acris.jpg

Conclusion: Even though the pace of pending sales has risen from depressed summer levels, this rise in the pipeline of deals is yet to translate into a rise in actual sales. Why? Honestly, I have no idea - by now I thought we would see a subsequent rise in actual sales. The only thing I can think of is that we are reflecting the actions in late Sept/early October - I circled the 'reflections' on the chart above. But that would put the pending to actual sales lag closer to 4 months.

I thought the general lag was about 3 months and we are just over that level now - yet the pace of actual sales is still falling! For those that focus ONLY on actual sales, it's clear that as of now Q1-2010 is shaping up to be one of the worst quarters for sales volume since the height of the credit crisis in 2009. The data is the data and it makes me wonder. The market today seems quite active to me, price action is solid, bids are coming in, and there is a lack of quality product that is priced to sell. Certainly the opposite of what happened at the height of fear in 2009. Time will tell if the pace of actual sales does in fact follow, at a lag, the recent rise in pending sales.



Know Your Market!

Posted by urbandigs

Fri Feb 11th, 2011 06:57 PM

A: The market rarely gives you a solid glimpse of what the level of demand might be for a specific property in a specific submarket. That's why we are sitting here talking about it and looking at charts in an attempt to see what's going on. But when you see dozens of offers sent in for a property, right there, you got a snapshot of the level of demand for that submarket. In this case, its the 2bed/2bath loft market in Tribeca. It's also the biggest confirmation that the market dictates value and not the brokers or the seller. If you price below market, the market should bid it up to current valuations. The strategy often works well when timed and marketed properly - executing this strategy in July would not have the same effect. But the real gift for sellers that execute this perfectly is the potential for 'gap up' bids to jump in.

Its interesting that its been almost one year exactly since the last discussion on 'gap-up' bids, from Feb 24th, 2010 - Handling Multiple Offers in Today's Market:

Gap-up Bids: this occurs when a very interested buyer deals with a highest & best situation by going all in in regards to aggressiveness! Let's say you got a property asking $2,895,000 that was priced such that it received multiple offers; a highest & best is declared and deadline for submitting offers provided to all interested buyers. To ensure they get it, one buyer decides to bid $3m! I consider this a gap up offer that may not have come in like this if negotiations were privately held. This actually occurred for 35 Bethune Street, Unit 2/3A.
This also is happening for a loft over on Reade St in Tribeca. According to Daily News, "Hot property! Tribeca loft sees 18 offers in a week":
Don't ever doubt the power of a true Tribeca loft priced to sell.

A downtown source just reported that 18 bids have come in for a two-bedroom, two-bath apartment at 108 Reade St. The 1,305-square-foot home listed by Corcoran brokers Jim Farah and Gavin Hammon is priced at $1.375 million. On the third floor, the apartment has a great room that is 22 by 23 feet. The bedrooms are in the back of the apartment. Why the interest? Why now?

"When something is priced right, you generally see the highest activity in the first two weeks on the market," says Hammon.
Here you have the market telling you what people want, but are having trouble finding in today's market!

Hey 2BR/2BTH Tribeca loft owners ----> ARE YOU LISTENING???

I can't think of a clearer sign for any future potential sellers w/ a similar product to tap this market now. I mean, this thing got tons of offers and unfortunately we were one of the 17 that were not selected. Proof that the "market does what the market wants when it wants to". And that market is clearly tight!

SELLER TIP: If a seller w/ a similar product does take this advice but chooses to list a few $100K above the market, they will lose the potential for this kind of reaction and possible gap up bids discussed above. Pricing is KEY! Screw that up, and the traffic doesn't come, the urgency isn't there, and you end up doing price reductions until you find the sweet spot of where the market is now.

I was going to wait until this entered contract to put this post up, but amazingly, it hit the media early before any deal was signed. Lets see where this one ends up in 1-3 months. In the meantime, here is a chart showing you PENDING vs ACTIVE trends for the Tribeca/Soho - 2bath+ - $1-2m submarket:

tribeca-loft-market.jpg


Pending Sales Starting to Reflect Recent Action

Posted by urbandigs

Wed Feb 9th, 2011 10:44 AM

A: Remember that we engineered different tools with varying degrees of sensitivity to track the Manhattan housing market. The Real Time Market Ticker is the closest you get to what is happening on a daily basis - but you must be careful how you use this tool. Over time you'll get to understand the true value of the ticker and gaining a real time pulse on the market. For a broader market view on the pace of demand, we have both the Pending Sales tool and the Broker Update YoY Contracts Signed tool. Let me show you.

About 2-3 weeks ago I noticed the market was really picking up out in the field, but I was yet to see our real time ticker pick up on it. Thats because the deals were all in the works and not yet fully executed. In the past 7-10 days, these deals got fully signed and the ticker caught it. I showed you a snapshot of this ticker yesterday and I want to show you another snapshot from last night:

ticker-manhattan-1.jpg

When you start to see a 100 deals get signed in a 2 day period you know the market is seeing solid action. Again, its too soon to call this a trend but enough action has occurred in the last 7-10 days or so to push up the Pending Sales measure for Manhattan.

How we measure PENDING SALES --> Counts all listings that move from an ACTIVE state to a CONTRACT SIGNED (csgn, board approved) listing state in the Rolex Broker Sharing system. The listing broker must update at least once in the last 90 days. If a listing is in contract w/out an associated ACRIS closing in 6 months, it falls out of Pending Sales. The important thing to note is that the listing MUST be measured in an active state prior to being counted as a pending sale. This is a result of our flow algorithm that acts as a level 1 data integrity rule for our entire db.

I would expect Pending Sales to rise a bit more in the coming days to fully reflect the recent activity - for now, here is a 1QTR look at Manhattan Pending Sales:

MARKET-PENDING-manhattan.jpg

Readers can play around with the time range for Pending Sales by clicking here. Subscribers can play around with all tools to see which submarkets are seeing the most action. To me, it looks like the Gramercy/Flatiron, Lower Manhattan, and Lower East Side markets have been doing well recently.


Lets Check The Manhattan RE Ticker

Posted by urbandigs

Tue Feb 8th, 2011 11:48 AM

A: As is normally the case at this time of year, I'm seeing a wave of action right now. Now, no one broker constitutes the market which is why there is a demand for one system to track Manhattan inventory as it moves from ACTIVE to CONTRACT SIGNED to CLOSED, etc..So lets check the Manhattan ticker and see if it shows what I'm seeing in my business and what my colleagues are telling me they are seeing in their businesses.

The Real-Time Manhattan Market Ticker (as of 9pm last night, before the last update):

ticker-manh.jpg

Notice the 7-day moving window for the pace of new contracts being signed. It hit around 231 last night after the days updates were almost complete - remember, the moving windows are on a timer and as each new update comes in the front end one less update is counted in the tail end. With the 30-day ticker at 667 it's clear the recent action is noticeably higher.

Its quite important to note that 1 week is NOT a trend make. But in the world of Manhattan real estate where anecdotal reporting tends to rule, we need to understand that there is a 2-3 week lag between when a bid is submitted and when a deal is fully executed. So there is a short term pipeline of activity that brokers in the field see BEFORE our real time ticker picks up on the 'done deal'. In other words, the rising 7-day figure of new contracts signed reflects a good 2-3 weeks of action.

Im keeping my eyes on this ticker to see if the pace sustains itself.

My personal business right now is seeing a mix of...

  • losing a few good apartments to higher bidders and then seeing it go into contract a week or two later

  • high quality property that is priced right having best & final situations to select the buyer

  • four agreed upon deals entering the contract phase

  • few new bids being sent in and negotiations started...


  • ...a bit of everything and something that usually happens this time of year.

    If your a buyer ---> chances are you are also seeing it out there, as well priced quality property either has a deal in the works or was recently signed into contract. You know your inventory best and whether a property is unique and priced right. So when you see something that works well for you, you may want to be a bit more cognizant of what the market and your submarket are doing right now and in the next few weeks/months as our active season rolls on.

    If your a seller --->
    this is the time of year you need to take advantage of the pickup in activity! Deals are being signed, so dont let it be your competition! This is where you need to be priced right. If your not, and you are still lucky enough to get traffic and a good bid, seriously consider taking it! I've been in this market long enough to know that the market dictates your property's value, not you or the broker. If you price as close to fair market value as you can stomach, the market should react and bring you offers! If the traffic is not there and the market is showing signs of picking up, then re-consider your pricing strategy so your not left behind when the buyers are out and about!


    Audience Feedback for Next Upgrade?

    Posted by urbandigs

    Mon Feb 7th, 2011 11:16 AM

    A: When it comes to building real time charts for Manhattan markets and submarkets, data quality and amount of good data are the most important things. If the data is crappy, we can't trust what the charts may be showing us. If the data is minimal, the charts will be rendered useless when trying to analyze a trend. I want to address this second issue as we feel we solved the first one.

    SUBSCRIBERS WANTED MORE CHART OPTIONS--> Paying subscribers of these new Manhattan charting tools wanted to see more neighborhoods and to be able to further break down charts by being allowed to select Co-op, Condo or Townhouse. All very understandable.

    THE PROBLEM --> Some neighborhoods have very little data! Think Kips Bay, or Noho, or W Village. Then you got certain neighborhoods that only have lower price points or mostly condos. This problem is amplified when subscribers are allowed to further slice and dice the Manhattan market into smaller submarkets. Our current system allows a user to select:

    1. A Chart Type: Active, Pending or Off-market trends
    2. A Neighborhood: Up to 12 Manhattan Neighborhoods
    3. # of Bathrooms: To break down apt size
    4. Price Range: To break down price point


    Now we added a fifth element for the soon to be released upgrade:

    5. Property Type: Co-op, Condo, Townhouse

    In addition, we broke out more Neighborhoods for a total of 17 so that users can more accurately target a specific area.

    THE CHALLENGE --> There are so many combinations of charts that are possible with these 5 expanded options that a problem arises ---> There are many little submarkets out there that will have little to no data to even chart out!

    Think about if a user wants to chart out these submarkets:

    - E HARLEM pending sales, Co-ops only, $3M+, 3+ bathrooms

    or

    - MIDTOWN WEST pending sales, Co-ops only, $2-3M, 2+ bathrooms (chart displayed below)

    ...the following issues will arise as an unintended consequence of giving users more functionality to slice and dice the Manhattan market in an attempt to analyze a trend:

    help-with-charts.jpg

    There are 100s of these types of charts with little to no data to analyze! Yet subscribers want the ability to build these types of charts because they feel its important. This is where we have the challenge. You see, we are NOT a MLS system. We are NOT a listing service. The mission of all the data mining, all the algorithms to account for data integrity challenges, and all the rules to focus on the fresh data was to become the trusted, go-to resource when trying to figure out what Manhattan is doing on a:

    1) market level, and on a...
    2) sub-market level

    If we give the functionality that users ask for the above kinds of charts may come up. So what do we do about? This is where I would LOVE to hear your feedback. Should we:

    a) Engineer an 'ERROR' message of sorts that displays when the user tries to chart out a sub-market that does not have enough data to build a worthwhile chart (see above example for Midtown West)....This way the user can start over and re-enter the fields for their desired chart?

    Or should we....

    b) Engineer 'RESTRICTIONS' on the drop down options that users tweak to build the charts in the first place? Basically, take out the chance to build a chart that doesn't meet a pre-determined sample size. The concern here is that users may not understand why they are not allowed to build certain charts, even though we understand it and try to simplify the system for them?


    What do you guys think? I'm opting for option A, while my engineers are leaning towards option B. This is the holdup with launching the newly engineered UI for the chart system. I'd love some user feedback.

    Thanks!



    JANUARY is in the Books...Quick Manhattan Check

    Posted by urbandigs

    Tue Feb 1st, 2011 07:35 AM

    A: I'm off to enjoy the snowstorm upstate for a few days and just wanted to throw some real time Manhattan housing charts up for you. Also, my engineers and I have been putting final touches on a new user interface (UI) for subscribers. Its very likely we go live with the re-engineered chart system while Im away, so there might be a day or so of de-bugging. The new chart interface will now allow subscribers to compare submarkets and neighborhoods to the broader markets to track for under/over-performance.

    Some charts....what especially is concerning to me right now is the bottom chart that shows the pace of ACRIS recorded sales. It seems to be diving and not yet reflecting the pickup in pending sales we had in Q4. FYI, we have been checking our records to make sure we are capturing everything right, and it seems we are. The pace is just down recently and we must remember that it takes a good 3 months or so to go from initial contract signed to ACRIS recording the transfer in public records. We are right about the 3-month mark now when pending started to move up in late October.

    First, with JAN in the books here is your MONTHLY BAR CHART OF CONTRACTS SIGNED:

    pace-manhattan-deals.jpg

    Second, here is a chart that compares MANHATTAN PENDING SALES vs ACRIS RECORDED SALES 90day MOVING AVERAGE:

    acris-pending-real-estate.jpg

    Im off for 3 days, back Thursday evening. Enjoy all!