Downtown Manhattan "...on Fire" / UES & UWS $2-5M Under-performing

Posted by urbandigs

Thu Mar 8th, 2012 11:18 AM

A: Lets dig in to the market as its producing right now and show you just how segmented Manhattan is - there is no 1 market on this island. DeNiro calls the downtown market "on fire", I agree, and Deanna Kory calls the UES/UWS $2m+ markets 'oddly....left out of the frenzy', and I again agree. The UrbanDigs real-time charting system is accurately picking up on both trends, showing the divergence between these segments of the market! Lets discuss.

First lets once again check the UrbanDigs Daily Market Ticker for Manhattan conditions in the field right now (snapshot taken midnight last night after all WED broker status updates were in):


I boxed out the CONTRACTS SIGNED row above which is telling us:

Today --> 56 deals signed on Wednesday
Yesterday --> 45 deals signed on Tuesday
7-Day --> weekly pace of 322 new deals signed
30-Day --> monthly pace of 1,021 new deals signed

For some perspective, lets take a look at Monthly Contracts Signed for the Manhattan markets since 2009:


As you can see, the last two March's saw new deal volume over the 1,000 level - which is the current 30-Day pace for Manhattan right now (as seen by the top ticker). The difference today lies in the amount of supply on the market, which I will get to in a moment. Lagging sales reports will not alert you to these kinds of conditions that are happening in the field right now.

Serious Sellers should take note that this is the kind of market you want to list your property in! In general, the broader market has 8% less supply than we had both 1 and 2 years ago; take a look at Manhattan Active Supply as it looks right now compared to two years ago:


UrbanDigs Tip: Always analyze demand relative to supply trends. If supply falls and market gets tighter, it will get more and more difficult to sustain a fiery pace of activity unless more supply comes to market. Yet, this market is doing that right now - the question is how long it can last if supply stays this tight. A brokers 'feel' of the market occurs on a 2-3 month rolling scale - the most recent few months of changing market action. To see this simply focus on the most recent 2-3 month trend between Supply & Demand (you can do this market wide, or for a specified submarket) - Just hit the 1QTR button for Active Supply vs Pending Sales trend to see the last three months of action:


But not every segment of the market is joining the party!

I spoke to Raphael DeNiro last night on how the markets were doing downtown and he summed up what he is seeing as "downtown markets are simply on fire" - DeNiro works the Tribeca/SoHo/WVillage markets hard and will provide me a more detailed quote later today. In the meantime, lets check in with what Deanna Kory over at Corcoran (primarily focused on UWS/UES markets) is seeing right now:

Deanna Kory: "Oddly - I feel left out of the frenzy and I am not seeing a lot of Upper West and prime Upper East side selling in the market segments in which I am mostly involved: $2 M + co-ops. That seems slow relative to condos but also particularly slow relative to downtown sales. I also sell between $1-2M with my team. That seems more active. But pricing is key and I think that in $2M + category co-op prices are down a bit, especially for apartments that need work."

Now lets compare these observations to what the UrbanDigs system shows for these segment of the market over the last 3 months:

1QTR %CHG: UES vs UWS - Pending Sales - $2-5M - All prop types
UES is down 4.4%
UWS is down 5.0%

Our system is accurately showing us how this segment of the Manhattan market is NOT participating in the action over the last 3 months.

Now lets check on Tribeca & SoHo/NoHo/WVillage submarket over the last 3 months, that DeNiro calls "on fire":

1QTR %CHG:Tribeca vs SoHo/NoHo/WVillage - Pending Sales - $2-5M - All prop types
Tribeca is up 93.9%
SoHo/NoHo/WVillage is up 57.1%

I can't tell you how good it makes me feel to see the UD system picking up real-time trends in hyper-local Manhattan sub-markets so accurately. Exactly what the tools should be used for and tells us that sellers in UES/UWS $2M-$5M segment of the market need to tweak their pricing strategies accordingly, as the pace of demand is not nearly as robust as other higher end downtown markets.

For a baseline, Manhattan Pending Sales is up 11% over the last 3 months. Subscribers can access all Manhattan market segments in the UrbanDigs Submarket Trends tab in our Charts section.


Related: Fred Peters View of Manhattan RE -- Not So Quite on the Western Front