Q1-2013 in the Books -- Buyers Facing Inventory Shortage

Posted by urbandigs

Tue Apr 2nd, 2013 08:42 AM

A: Manhattan active inventory stands at 4,826 units, down 30% from this time last year. At the same time Manhattan's Pending Sales, the measure of real-time demand, stands at 3,154 contracts awaiting closing; this is up 24% from this time last year. On a monthly basis, we continue to see 'less new stuff' coming onto the market and 'more listings' than usual going to contract. It seems Manhattan is a tale of two markets; one kind of market for lower quality/higher priced listings that aren't experiencing the activity being discussed here and the other is a fierce market where buyers are competing each other over quality product that is reasonably priced. Either you are priced right or you aren't. This combination is leaving buyers frustrated as they pass over the over-priced stuff and deal with 'best & final situations' for the quality, well priced listings. I'll repeat what I said earlier this year, "I can't think of a better time for a seller to list their property in Manhattan". My advice to sellers that are considering listing but are waiting for whatever reason, list now and take advantage of current conditions! Lets discuss and show you the real-time data.

First I would like to show you Manhattan Monthly Contract Activity that should easily allow you to visualize the reflation this market experienced since 2009, and where we are trending today:

q1_2012contractactivity.jpg

Conclusions:

March 2013 saw 1,254 new contracts signed
This is: +14% from FEB 2013 and +3.3% from MARCH 2012

Q1-2013 saw 3,212 new contracts signed
This is: +19% from Q1-2012

In terms of deal volume, Manhattan continues to produce at a very high level compared to prior month, prior year and the prior year's first quarter. Now that you have a sense of real-time deal volume trends lets move on to supply trends.

Manhattan Monthly New Supply trends look like this:

q1_2013supply.jpg

Conclusions:

March 2013 saw 1,623 new listings hit the marketplace
This is: +13% from FEB 2013 and -8% from MARCH 2012

Q1-2013 saw 4,597 new listings hit the marketplace
This is: -4% from Q1-2012

Combine Active Supply trends & Manhattan Pending Sales trends over the last year and you get the following basic chart on where we are today and an explanation as to why it feels 'so tight but strong' out there:

broad_market.jpg

Manhattan is a highly segmented marketplace with activity varying across neighborhoods, price points, and property type. I can deal with the bidding wars as that is simply a side effect of a strong market + a properly priced quality listing. What I can't stand are the sellers that are stubbornly over-priced and simply "testing the market" to see if they can get their #. Of course these sellers are "looking for cash offers" or "non-finance contingent" offers because of concerns their # won't appraise. It's frustrating but in the end, the seller has every right to do what they want with their property; and today's market certainly is seeing leverage shift strongly to the sell side. My advice would simply be that if you have a high quality listing and are testing the market, at least be cognizant of the level and terms where bids are coming in and hopefully you will ultimately listen to what the market is saying regarding value.

To close today's discussion I leave you with the 16 Top Producing Neighborhood's of 2013 in the UrbanDigs Manhattan residential real estate tracking platform (subscription required for links and full access to the chart system):

*sorted by Strongest Pending Sales %chg Year-to-Date

1. SoHo/NoHo/West Village +83.6%
2. FiDi/Civic Center +72.7%
3. Chelsea/Midtown South +58.8%
4. Gramercy/Flatiron District +53.6%
5. Tribeca +48.4%
6. Murray Hill/Kips Bay +40.7%
7. Upper West Side +38.6%
8. Upper East Side +37.7%
========== MANHATTAN BASELINE +36.2% ==========
9. Midtown East +31.6%
10. Midtown West/Clinton +23%
11. Lower East Side/East Village +28.2%
12. Inwood/Washington Heights +24.5%
13. Harlem/Hamilton Heights -1.9%
14. East Harlem -4.9%
15. Battery Park City -11.8%
16. Harlem/Morningside Heights -16.2%


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