Pending vs Sales Pace; Quick Check on Manhattan Market Ticker
A: Lets just check in on Manhattan Pending Sales vs Actual Sales pace and the real time Manhattan market ticker to see how we are doing.
First the ticker. Manhattan is still churning out new deals at a solid pace, even though it appeared that pending sales was peaking 11 days ago. Remember, this market ticker counts all new listings that enter contract as the broker updates the property status in the RLS (REBNY Listing Service):
Notice how the 7-day pace shows 260 new deals signed and the 30-day pace continues to trend above that 1,000 level. As far as I'm concerned, the market is very active if we are putting 250+ new deals into contract a week. Once you see that 7-day pace dip below 200 or so it will be the first sign that the market may be transitioning to the generally slower summer months.
Sellers should track the real time pace of demand if they must unload property soon. History will tell us that once we get into June and July, the pace of new demand slows noticeably; so price your property as close to market value while activity is hot because once we get into the summer you will be chasing the demand that tends to fade. Sellers and brokers should always know that the market dictates value, and if you price too low chances are high that you will receive multiple bids that should end up producing a # that the current market can absorb. Creating a 'sense of urgency' because you priced a property well is always a good strategy!
I say this because I find most sellers are 'worried' about pricing too low and not giving their listing a chance to get a higher offer - the 'wait for the market to catch my price' strategy. To that I say:
1) The most activity is generally in the listing's first few weeks on the market
2) Stale listings that take the slow & methodical price reduction route tend to lose out on potential 'frenzies' and won't create that 'sense of urgency' in potential buyers. Rather, these listings usually attract value buyers that tend to bid low
Here is an updated chart showing you Manhattan Pending Sales vs Actual Sales pace:
The sales pace line chart is set to a 90-day lag so that we can leave enough time on the table for delayed filings to come in - we use the actual sale date, not the filing date which makes it fit very nicely as a lag to our pending sales charts.
The think to look at in this chart is:
1) That Pending Sales (green line) is once again ticking higher after it appeared to be peaking 1-2 weeks ago, and...
2) That the ACRIS sales volume is yet to pick up on the very active start to 2011 that we had. It did pick up on the tick up we had late in 2010 at a 2 month lag or so.
Since quarterly reports focus on sales, it appears to me that Q3-2011's report will likely show the strong start to the year we are seeing right now. I'll be surprised if the Q2 report catches it. Cheers!