A: Lets check in on the 3-MTH pending sales trends for all Manhattan neighborhoods tracked by the UD system.
Notable Neighborhood Moves since the last check in mid-March:
-- Battery Park City market wakes up, surging 154% over the last 3 months
-- Tribeca cools down slightly seeing demand go from +68.9% to +57.6%
-- LES/Un.Sq/EVillage surges from +17.8% to +65.9%
-- Chelsea/Midtown South jumps from +36.6% to +91.5%
-- UWS jumps from +27% to +61.9%
Here are all the Manhattan neighborhood trends we track; I added supply trends after each neighborhood's 3-month pending sales #:
3-MONTH PENDING SALES TRENDS -- SUPPLY TREND
Battery Park City: +154.5% -- supply down 18.1% over this time
Chelsea/Midtown South: +91.5% -- supply down 6.6% over this time
LES/East Village/Union Square: +65.9% -- supply up 2.2% over this time
Upper West Side: +61.9% -- supply up 0.3% over this time
Gramercy/Flatiron: +59.1% -- supply down 1.9% over this time
Tribeca: +57.6% -- supply up 2.3% over this time
Upper East Side: +57.2% -- supply up 5.8% over this time
Inwood/Wash. Heights: +57.1% -- supply up 19.6% over this time
Midtown West/Clinton: +47% -- supply up 7.8% over this time
Harlem/Morningside Heights: +41.1% -- supply down 12.4% over this time
Murray Hill/Kips Bay: +39.6% -- supply up 5.3% over this time
East Harlem: +38.5% -- supply down 5% over this time
Soho/Noho/West Village: +34.8% -- supply up 11.5% over this time
Midtown East: +21.2% -- supply up 9.5% over this time
Harlem/Hamilton Heights: +12.9% -- supply up 5.5% over this time
Fidi/Civic Center: +12.5% -- supply down 5.2% over this time
The supply/demand trends continue to be quite clear --> new deal volume is pushing pending sales %changes to high levels while supply trends remain tight.
On a daily deal volume level, we are seeing around 40-50 new deals signed a day over the course of the business week - a very strong pace. The high end is also showing an uptrend but not nearly as active as the lower price points.
In terms of price points, over the last 3 months Manhattan Pending Sales trends are as follows:
PENDING SALES ALL MANHATTAN = +53.8%
PENDING SALES <$1M = +51.9%
PENDING SALES $5M+ = +27.6%
Manhattan tends to see monthly deal volume over the 1,200+ level only one month out of the calendar year - the reason being is that it gets harder and harder to sustain such high levels of new deal volume that this kind of action ultimately becomes self-defeating and will at some point, cool off.
Right now monthly deal volume is at 1,217, with another 57 deals going into contract yesterday alone. Sellers should take advantage of this kind of activity while it lasts and buyer's just have to deal with buy-side competition and a sense of urgency for quality, well-priced product a bit longer. Expect this pace of deal volume to slow as we get closer to the summer at the expense of even tighter supply as unsold listings tend to be removed from the market in the slower summer months.
A: We rarely take a look at how the market has performed over the past 2+ years, so lets take a quick look at how Manhattan has performed since the height of the credit crisis in 2009. It should put into perspective how far this market has come and give you a good sense of where we are and where we came from. We should also point out the general downtrend in supply over this time -- to me, it feels like this market has gotten awfully tight over the last few years, and the charts confirm it. But that hasn't stopped buyers from signing new deals at all - lets discuss.
Supply down 27% since early 2009 (green line)
Sales volume up 91.7% since early 2009 (red line)
Not many people expected this kind of comeback! The UD Manhattan sales volume chart is set to a 90 day lag to allow enough time for sales to be filed by the city register - so it cuts off near the end of the chart above. You can read up on ACRIS sale filing delays here, "Q1-2012 Sales That Never Made the Q1 Report".
The UrbanDigs real-time market ticker and chart systems tell me where that trend of sales volume above is likely to head over the next 3-6 months.
-- The market ticker shows me daily market production by REBNY members
-- Pending Sales show me the pace of current deal volume
Please click on this free link below that will show you:
Manhattan Supply vs Demand (pending sales) Trends
I've discussed how active Manhattan markets are right now as our daily ticker continues to put weekly deal vol over the 300 level which is fueling a rise in our measure of pending sales -- pending has surged 64% over the last six months alone!
This is all happening with tighter supply conditions from both one and two years ago; which makes me want to up the potency of this recent move up in new deal volume.
Its fairly safe to expect a sustainable and noticable tick up in both sales volume and median pricing trends over the next few quarters. Expect strong Q2 & Q3 quarterly firm reports w/ the focus on the Q3 report due to the lagging nature of ACRIS sale filings.
It is what it is until the data changes, and with supply so tight and deal volume so high, I have to wonder how sustainable the current trend is. Shift the leverage to the seller for the next 30-45 days and let's see if Manhattan can keep this deal volume up as we head into the summer.
A: Sorry for the light content lately, but I've been swamped the past few weeks and probably will be for the next 1-2 months. I just wanted to do a simple breakdown of Manhattan's recent surge in deal volume and put that into perspective relative to how our market performed this time last year. To get right to the point, Manhattan continues to see a surge in new deal volume amidst tight supply. Over the past 30-days, brokers have placed over 1,200 new listings into contract via our real-time feed from the Rebny Listing Service (RLS). The weekly pace continues to be around the 300 level, which is a 'very strong' signal of new deal volume across the Manhattan marketplace.
First, let me give you a quick check of the Daily Manhattan Market Ticker available to UD subscribers (snapshot taken 11pm last night):
# of deals signed Thursday --> 54
# of deals signed Wednesday --> 53
# of deals signed last 7-days --> 304
# of deals signed last 30-days --> 1,239
This is signal #1 of a very active marketplace. I urge subscribers (especially brokers) to check in on this market ticker tool every few days or so to maintain a pulse on real-time conditions in the marketplace. The ticker is directly connected to real-time shared status updates for all REBNY member firms managing their exclusive listings. Its the market in the palm of your hand as you can track daily deal volume from every REBNY agent in every office that does business in Manhattan real estate. Since no one broker is the market, this tool will accurately show you relative market strength and weakness as it happens. Ultimately these #s will affect the market trends that are available in our chart sections.
Now lets take a broader view of what the real-time ticker above has been telling us about current conditions lately. Below is a breakdown of Manhattan Supply vs Pending Sales from Jan 2011 to present -- allowing you to see how 2011's active season compares to the current marketplace (I numbered some items on the chart for brief discussion below):
Lets break this simple supply--demand chart down:
1. Supply Rose Throughout 2011's Active Season -- Back in 2011, Manhattan supply hit a high of 8,080 actively marketed listings on May 14th after rising for the first 4 months of that year. So far this year, Manhattan supply is basically flat for the year and currently is struggling to break the 7K level -- we show inventory currently trending at 6,871. Buyers in today's marketplace are simply not seeing as many new products hit the market as we did this time last year. The result is buyers are competing with each other for the highest quality/best priced listings that do come to market. It doesn't take much for buyers to realize when a good deal presents itself.
2. Pending Sales Peaked Last Year @ 2,728 -- The peak of demand last year was back in early June. At that time, Manhattan supply was in the 7,800s. We already reached that level by early April this year with supply in the 6,800s! That is signal #2 of the strong level of new deal volume that is taking place in the current marketplace.
3. Pending Sales Reaches That Level Today -- Give the markets daily deal volume that the real-time market ticker above is showing us, it's fair to say we will push noticeably higher than the peak of pending sales in 2011. Time will tell how much higher as we usually tend to see pending sales peak out around the June/July time frame.
4. Supply Mostly Flat So Far in 2012 -- Supply is influenced by a # of things: pace of new products coming to market, pace of active supply going into contract, and the pace of active supply coming off the market. Right now I can tell you that there is less supply coming to market + a very strong pace of active supply going into contract + a very low pace of supply being taken off the market. Add it all up, and overall inventory has strong market forces pushing against it preventing it from rising to much higher levels.
5. Gap Between Manhattan Supply & Manhattan Pending Sales Widens -- With supply flat and demand rising, the gap between the two is widening and is another signal of a strong marketplace. My only concern continues to be, 'how long can we keep up this pace of new deal volume if less supply continues to come to market?'. At some point it can become self-defeating, similar to how high oil prices results in demand destruction and ultimately lower oil prices. At some point, all the good products will be signed into contract and as we approach the summer we will see much less new supply come to market. The combination of these two forces may confine the current surge in activity to a shorter period than what we usually see for our active season.
Subscribers can further detail out local trends in neighborhoods and price points in the Sub-Market Trends tab of our charts section.
Finally, I'm asked all the time by users to help interpret supply/demand charts either for the market as a whole or for a local sub-market -- for those I encourage you to read the discussion, "How to Interpret The Trend: The Anatomy of a Chart", posted back in January.
A: The Q1-2012 market reports are out and are populated by closed sales that took place in January, February, and March. The reports were released April 2nd. Due to ACRIS filing delays, readers of these reports must understand that they paint an incomplete picture as there are many Q1 sales that filed in after the report was released + Q1-2012 contains many Q4-2011 closings that filed in late. So when it comes to analyzing price action, the Q1 report is more of a snapshot of a marketplace 4-6 months ago. If you wanted to analyze Q1 with all sales that actually closed in Jan-Feb-March, then you would have to wait 60-90 more days or so for all sales to file in. Here are some sales that closed in Q1, but filed in late and never made it into that report! These sales will be included in the Q2-2012 report that will come out July 2nd.
"Don't hate me because the city filed me late" - says one high end Q1 sale that missed the Q1 market report by 2 days.
While in development of this system in 2009/2010, we discovered that the acris filing lag works something like this:
50% or so of closings will be filed within 2 weeks
70% or so of closings will be filed within 4 weeks
80% or so of closings will be filed within 6 weeks
85% or so of closings will be filed within 8 weeks
95% or so of closings will be filed within 12 weeks
The UD chart system automatically sets all sales related charts to a 90-day lag to wait for 95% or so of closings to be filed and measured. UrbanDigs offers the following Manhattan sales related charts:
Manhattan Sales Volume (by price points)
Manhattan Median Sales Trend (by neighborhood - will be expanded soon)
Manhattan Absorption Rate (in months)
Manhattan Sales Dollar Volume (in millions)
There are a few ways to handle the lag:
1. Wait 60-90 days for all sales to roll in before painting a picture of a time period (UD does it this way)
2. Publish market reports on time and then issue a revised report 90 days later with complete sales figures
3. Publish market reports w/out any revising - which is fine, but will be about 2-3 months at a lag in terms of price action...as long as the methodology is consistent, the ongoing trend will eventually reveal itself
The key is to be consistent with reporting. The annoying part is to think about how the Median/Avg Price #s can change when a quarterly report waits for all Q1 sales to file in? A Q1 report today that shows YoY price declines may in fact show YoY price gains if they only waited 60-90 days for all Q1 sales to roll in.
Take a look at the luxury sales that occurred in Q1 but never made it into the recently released report because the filing came after April 1st.
$5M+ Q1 Sales That Never Made the Q1-2012 Market Reports
$19,287,375 -- 34 Greene Street - 5PHN closed March 1st
$13,240, 250 -- 535 West End Avenue - PH1 closed March 23rd
$10,600,000 -- 1 Central Park West - Unit 30A closed March 14th
$8,073,000 -- 350 West Broadway - Unit 5 closed February 10th
$6,345,850 -- 60 Riverside Blvd - Unit 3602 closed March 20th
$5,800,000 -- 10 Gracie Square - Unit 1/2C closed March 19th
$5,800,000 -- 580 Park Avenue - Unit 9D closed March 20th
$5,651,287 -- 240 West Broadway - Unit 5 closed February 28th
In only 4 business days since the close of Q1, there are already eight $5M+ sales that closed in Q1 yet due to the delay in ACRIS filings will be counted in the Q2 report. This is especially interesting as The Real Deal recently reported "Luxury market losing its shine? Only 17 sales over $10M close in first quarter compared to 25 in third quarter of 2011"...Now we know that only 4 business days later, 3 more $10M+ sales came in for Q1 that were missed in that article.
The Q1 report contains many Q4-2011 sales and the upcoming Q2-2012 report will contain many Q1-2012 closings. That's the lag - so when analyzing price action keep this in mind!
I also count:
-- 21 Q1 sales between $2M-$5M that closed over the last four days and didn't make it to the report
-- 41 Q1 sales between $1M-$2M that closed over the last four days and didn't make it into the report
It may not sound like much but this is only the first 4 days since the close of Q1 that we are talking about here. Over the next 8-10 weeks, many more Q1 sales will continue to file in and add to these totals.
This is why there is a discrepancy between what real time measures of inventory are telling us about current conditions, like supply and pending sales trends, and what quarterly market reports are telling us from actual closings. Not much we can do about ACRIS filing delays, but we can be educated on these kinds of things so that when we read and interpret the market reports we understand what the #s are reflecting on.
A: Manhattan continues to shine in regards to new deal volume, which is the best way to get a feel for the current 'pace of demand' in the marketplace right now. Today's activity will ultimately fuel future quarterly reports and from what I am seeing I think its safe to expect solid Q2 and especially Q3 reports in the near future. The UrbanDigs monthly tracking systems show that March-2012 booked 1,213 new deals signed, the highest monthly total for any month of March since we started keeping track in 2008. Given continued tight supply conditions, the market probably "feels" even more active if your an active buyer, seller or broker.
With sales reports lagging 4-6+ months, the only way to see what's happening in the field right now is to look at real-time inventory trends. That is, is a large amount of new supply coming to market? How is current deal volume? Is the pace of new supply outpacing new demand or vice versa? Since the contract price is only known to the parties of the transaction we will not know price discovery until a) the closing occurs and b) the city publicly files the transaction - a lag that can be 4-6+ months. By then, the market may be producing very different kinds of supply/demand numbers in the field. So lets get right to this real-time information and see what's really going on out there.
First, lets check in on Total New Supply by Month for the entire Manhattan marketplace (in other words, how much stuff is coming on the market each month):
Because of seasonality, its best to look at a month's production relative to the same month in past years. If I were to count how much new product came on to the Manhattan market in the months of March since 2008, it would look like this:
March 2008 --> 2,094 new units came to market
March 2009 --> 2,070 new units came to market
March 2010 --> 2,040 new units came to market
March 2011 --> 1,932 new units came to market
March 2012 --> 1,759 new units came to market
The trend of declining supply should be clear. But what's even more clear is when you look at each month's bars over the past few years - do you see declining monthly trend of new supply since 2010? On a monthly basis, there is simply "less stuff" coming to market! Last month was the first month since almost a year and a half that we saw a rise in 'month-to-month' new supply to hit the market. That rise only lasted 1 month, as March 2012 produced 9% less supply than March 2011. The result is Manhattan total supply down around 11% from a year ago and 10.2% from 2 years ago.
Lets now move the focus on to Monthly New Deal Volume for Manhattan since 2008:
New Deal Volume for Manhattan in the month of March is:
-- up 15.7% from last March-2011
-- up 39% from February-2012
All with tighter supply. Today's buyers know fairly quickly when a good deal on a property presents itself. Its a special bonus for sellers because the market should tell you rather quickly whether or not you are priced realistically. Its up to you and your broker to recognize when your not priced right and how to adapt before market action slows down. This level of new demand ultimately will be self-defeating, and no trend lasts forever so sellers are advised to take advantage. Buyers are paying for views, private outdoor space, and renovations right now -- so if you have none of these and are not seeing any action, check your price!
Back to measuring the pace of demand, if I were to count how many new deals were signed in the Manhattan marketplace in the months of March since 2008, it would look like this:
March 2008 --> 1,141 new deals signed
March 2009 --> 650 new deals signed (post-Lehman woes)
March 2010 --> 1,060 new deals signed (post-Lehman recovery)
March 2011 --> 1,048 new deals signed
March 2012 --> 1,213 new deals signed
Its fair to say most of these deals signed will ultimately close over the next 2-4 months and likely be counted in the Q3-2012 report. Which is another way of saying that the Q3-2012 market report released October 1st, 2012 is really reflecting market conditions happening right now!
For observations on price action, we have to go by 'brokers feel' based on what is being seen in the current marketplace and possibly looking at last asking price of listings that go to contract. The issue with the latter is that there is often a noticeable difference between the last asking price and the ultimate contract price where the bid came in. Analysis of what price points are going to contract is helpful when discussing which segments of the market are currently seeing the most demand. For now, this is the best way I can sum it up:
Manhattan 3-MTH Pending Sales % Change for UrbanDigs Price Points
Manhattan Overall (baseline) --> up 33.1%
Manhattan <$1M --> up 32.1%
Manhattan $1M-$2M --> up 40.6%
Manhattan $2M-$5M --> up 32.1%
Manhattan $5M+ --> up 13%
The $5M+ market, while active, seems to be the least active out of the all the price points the UrbanDigs system tracks. Subscribers can check on hyper-local trends in the UD Submarket chart tab. We will work to expand all chart functionality in the near future to give you more flexibility in your chart searches - we just always must keep in mind that when it comes to real-time stats, having a large enough sample size to push forth a meaningful trend is always a concern. If you get too granular on a real-time pending sales or supply chart, your sample size will be way too low and ultimately become meaningless.
Rock on Manhattan, rock on!