November in the Books / Month in Review

Posted by urbandigs

Thu Dec 1st, 2011 09:31 AM

A: The data is in for how Manhattan RE performed in November. Here is your month in review.

Over the last 4 weeks:

PENDING SALES is UP 8.5%
ACTIVE INVENTORY is DOWN 4.3%
OFF-MARKET INVENTORY is DOWN 3%


Manhattan produced 792 New Deals Signed in November
Manhattan saw 1,045 New Listings come to market in November
Manhattan saw 439 Active Listings come OFF the market in November

When you add these figures up you see why the measure of Manhattan Inventory slid 4.3% over the course of the last 4 weeks - the math goes something like this:

1,045 New Listings - 792 Deals Signed - 439 Listings Removed = net loss 186 units

Now there are other reasons why supply may fall (i.e., broker fails to update listings for more than 30 days, active unit closes with no CSGN update from broker, etc.), but the main forces behind supply is the pace of new supply MINUS the pace of new demand MINUS the pace of listings removed from the active market. The UrbanDigs datapoints are constantly changing with new figures coming in the front end and updated figures going out the tail end - the end result is a constantly moving trend.

If the Manhattan market were to shift or experience a major change, our tools will pick them up and buyers/sellers can adjust strategies accordingly.

To put these #s into perspective, please consider the following charts:

nov_2011_csgn.jpg

These monthly bar charts are great to use for interpreting the current state of the Manhattan markets because it puts the most real time data into perspective in two ways:

a) Month-to-Month --> what is the current trend from last month or 2-3 months ago?

b) Year-over-Year --> how does the current month's production compare to the same period 1 year, 2 years and 3 years ago?

As you can see, in regards to new deal volume the Manhattan market bottomed out in September and has been ticking higher since. Year over year trends will tell us that these moves are seasonal and normal. If history is any guide, we should see declining new deal volume over the next 60 days until the markets typically ramp up again in February - brokers and clients should react accordingly.

Now lets check monthly pace of new supply for the market.

actv_nov_2011.jpg

This is now the 14th consecutive month that the 'year-over-year' pace of new supply has declined! In other words, we are simply not seeing the levels of new supply come to market that we saw in 2009 and 2010. This lack of new supply is keeping pressure on inventory levels and frustrating many buyers who expected more 'choices' of well priced, quality products in their targeted submarket. Subscribers can further break down the data to see how their local neighborhood and price point have been performing.

In terms of price action, I see today's market trading at slightly lower levels than deals signed earlier this year - when the pace of new demand was noticeably higher. I would put Manhattan median and Price Per Square Foot trends around the late 2005 to early 2006 levels, still down from 2007's peak. Inventory trends and the state of the current market should be used to tweak bidding and pricing strategies on both the buy and sell side. The market dictates value, not the brokers or sellers, so it's always a good idea to know where the market is trending.

UrbanDigs is now in full development of a suite of Comparable Sales Analysis tools that will further help you break down where any one subject property may trade in today's market. Stay tuned!


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