Manhattan Real Estate: New York City Real Estate Tips tag:www.urbandigs.com,2012://4 2012-02-08T02:46:44Z Manhattan real estate consulting and analytics. Tracking Manhattan real estate in real time. Discussions on state of the Manhattan housing marketplace. Movable Type Pro 5.01 Manhattan "Ticking Up" - A Check on the Market Ticker tag:www.urbandigs.com,2012://4.1733 2012-02-08T01:39:45Z 2012-02-08T02:46:44Z A: Manhattan is definitely seeing a pickup in activity as the weekly pace of new deal volume continues to rise. Since it takes a few weeks to go from "Offer Accepted" to "Contract Signed", many buyers out there may find... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: Manhattan is definitely seeing a pickup in activity as the weekly pace of new deal volume continues to rise. Since it takes a few weeks to go from "Offer Accepted" to "Contract Signed", many buyers out there may find themselves in 'wait & see' mode for desired properties to see if higher offers turn into 'done deals'. Typically, an accepted offer and their attorney have a good 5-7 business days to review all diligence documents and execute a contract; add in a few days for logistics to get the contracts fully executed. Only then will the broker change a listing to Contract Signed so that the UD ticker can track it. Lets take a quick look at that ticker that tallies up daily deal volume so we can see which way the market is trending right now. The Real-Time Listing Updates table (a.k.a., the Manhattan Market Ticker) takes a direct RLS feed that shares every exclusive listing status update for all REBNY member firms. We engineered the tool to only capture new status changes for all exclusive listings in the Manhattan market. Here is the latest snapshot: csgn_feb7.jpg Focus on the CONTRACTS SIGNED row (blue rectangle) that shows us: 1) Daily # of New Deals Signed --> 41 (red box - still 1 more update to come) 2) Yesterday's # of New Deals Signed --> 41 3) 7-Day Moving Window of New Deals Signed --> 239 4) 30-Day Moving Window of New Deals Signed --> 685 So far we saw 41 new deals signed today -- and as part of my daily spot checking you can see a snapshot below of some of todays deals. It's empowering to so easily be able to accurately follow what kind of deals and how many are going to contract every day in the entire market. But the real bonus is that ensures that the UrbanDigs system is tracking the market accurately: feb7ticker.jpg A few conclusions: -- Daily deal volume has ticked up noticeably over the last few weeks -- The 7-Day weekly # reflects this at 239 deals signed and puts us on pace to almost break the 1,000 monthly deals signed level. -- The last 2 February's saw an average of 847 new deals signed -- The current 30-Day pace is 685 new deals signed but the weekly pace suggests that this will tick up if daily/weekly volume sustains itself -- February is the 5th Most Active month for new deals signed behind May, June, April & March (last 4 years) For a visual, here is a broad 3-Month chart showing Manhattan Active Supply (green line) vs Pending Sales (red line): actv_csgn_feb2012.jpg As the market ticker sees the 30-Day Contracts Signed # rise into the 700s and 800s and higher, the UrbanDigs pending sales measure should follow suit. Buyers and sellers in the field should be experiencing what the ticker is telling us because that ticker IS the market. I've had a few clients already see desired properties go to higher bidders. Since there is a lag between offer accepted and contract execution for the buyer's attorney to conduct due diligence, backup offers are left wondering where that higher offer may be relative to their own bid? Is it 3% higher? 5% higher? Buyers that are lower down on the offer todem pole have a painful 3-5 month wait for price discovery on the 'lost' deal should it ultimately go to contract; to get that confirmation on what bid the Manhattan market was able to produce for their top pick. Usually buyers won't wait that long if another desired property pops onto the market. That is why well priced, quality Manhattan property (especially those apartments in great locations w/ low CCs) will see multiple offers when we are in our most active months of the year. Put a motivated buyer through 1 or 2 lost deals, and they tend to act more aggressively when that 3rd one comes to market. A herd like mentality can take hold real quick in a market like this, especially when supply has been tightening over the last 15 months or so. Buyers should tweak their aggressiveness a notch or two for highly desired property if the 30-day pace of new deals signed continues to rise, as I expect it will over the next few months. Sellers can certainly test the market as general market activity rises, but be careful not to overdo it or ignore strong offers that may not be near inflated asking prices! The best offers come in the first few weeks of the listing, but sometimes the seller is simply not ready to hit that bid. Motivated sellers should use the active season to price right and try to create a sense of urgency where multiple offers will come in within the first few weeks. Thats the way to maximize profit potential and now we have the tools to tell you when the market is picking up - which it is. Overprice too much and you may miss the active season and be left with a 4-month old stale listing with multiple price cuts right as we get into the slower summer months. Its all a matter of price and the sellers need to sell! In the end the market will dictate value, not the broker or the seller! ]]> The Bigs Talk Housing / Calc Risk: "The Housing Bottom is Here" tag:www.urbandigs.com,2012://4.1732 2012-02-07T13:22:32Z 2012-02-07T14:54:37Z A: Bill over at Calculated Risk is a must read for anyone addicted to the financial/connected blogosphere. This comes about a week after Barry Ritholtz discussed his latest thoughts on housing. And now we got Manhattan appraisal giant Jonathan Miller's... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: Bill over at Calculated Risk is a must read for anyone addicted to the financial/connected blogosphere. This comes about a week after Barry Ritholtz discussed his latest thoughts on housing. And now we got Manhattan appraisal giant Jonathan Miller's take on Bill's 'housing bottom' call yesterday. Lots of mixed views here so lets discuss some broader housing trends today and take a break from micro-analyzing Manhattan; a market that has been in a world of its own over the last three years. Lets go in time order here...first Ritholtz discussed housing with Blodget on Yahoo Finance's Daily Ticker as the "housing bottom" bandwagon starts to grow: Barry Ritholtz of The Big Picture:
"No evidence of a bottom, prices continue to fall, volumes are anemic..despite record low interest rates...the data is pretty explicit, year over year prices are lower and we are just about back to fair value if u look at things like median income or % of GDP, but if this is the bottom than this would be the first time that a major boom & bust hasn't careened past fair value into deeply oversold conditions..you don't just mean revert back to fair value."
Then we saw Bill from Calculated Risk make his call yesterday with the following important notes to consider. Bill McBride of CR:
There have been some recent articles arguing the "housing bottom is nowhere in sight". That isn't my view. First there are two bottoms for housing. The first is for new home sales, housing starts and residential investment. The second bottom is for prices. Sometimes these bottoms can happen years apart. For the economy and jobs, the bottom for housing starts and new home sales is more important than the bottom for prices. However individual homeowners and potential home buyers are naturally more interested in prices. So when we discuss a "bottom" for housing, we need to be clear on what we mean. For new home sales and housing starts, it appears the bottom is in, and I expect an increase in both starts and sales in 2012. And it now appears we can look for the bottom in prices. My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012. There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices . Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales. And this doesn't mean prices will increase significantly any time soon. Usually towards the end of a housing bust, nominal prices mostly move sideways for a few years, and real prices (adjusted for inflation) could even decline for another 2 or 3 years.
Finally, we got Jonathan Miller with his reaction to Bill's call. Jonathan Miller of Matrix:
To be clear, Bill's forecast is based on prices of the key housing indices i.e. Case Shiller and CoreLogic without seasonal or inflation adjustments. He is very clear about the definition of a housing bottom which is key to the argument - in fact, there are two housing bottoms. He provides a logical argument but I think he's missing a key ingredient in the logic - how will the market be impacted by distressed properties and how they will impact the price trend: -- 2M additional foreclosures in 2012-2013 per RealtyTrac -- Falling inventory is masking significant shadow inventory built-up during the credit crunch. Inventory is declining to more manageable levels, not because there are fewer homes to sell, but because sellers are holding back until conditions improve - big difference. In other words, the call of a bottom is missing a huge element front the equation - supply. The forecast of a housing bottom could certainly be right in the short term, and housing prices could bottom in March temporarily, but there is a lot of excess supply to be dealt with and I suspect that prices will begin to slide as REO activity begins to slowly enter the market. It simply has to - there is too much of it.
All great stuff. My gut is to talk about one psychological element that is not so easy to track but that we all know means everything when it comes to housing: BUYER CONFIDENCE! Lets face it, not even record low mortgage rates of 3.87% & a 20% rise in equities over the last six months can stimulate buyers to rush into new home purchases!! What does that tell you? It tells me that record low rates, engineered by our Fed to combat extreme debt deflationary forces, are indicative of broader economic conditions that are still strongly tilted to the negative. Lets face it: a) Consumers don't look at housing as an asset class the same. The damage was done from the bust cycle and it will take years before faith in housing on a mass level returns to the marketplace. I'm not talking Manhattan here, think nationwide markets. b) Consumer are already debt-laden and continuing to deleverage and repair their own balance sheets. Put simply, the consumer is in repair mode and not in a "leverage to the hilt" mode. Some may want to, but banks won't let you..which brings us to.... c) Banks don't want to lend to a consumer with deteriorating credit in a high unemployment environment when they are still recapitalizing themselves! Why do you think Excess Reserves of Depository Institutions are in excess of $1.5 Trillion right now? Banks aren't lending they are hoarding cash and riding the fed engineered reflationary wave to slowly recapitalize so that one day they will be able to sustainably lend -- hopefully that day will be when consumer credit quality is on the rise and our economy is sustainably producing more than 250K jobs a month. A much better environment for our fractional reserve banking system to start behaving like its meant to. In the meantime, the M1 Money Multiplier is still way down. Banks exist to create credit and multiply deposits - $10,000 of deposited money is meant to be multiplied by the banks to a $100,000 of new credit - this process is stalled because banks are not lending and money is not circulating! You can't force borrowers to borrow and you cant force banks to lend! The Fed can flood the system with liquidity but they can't control where that money ends up! Crazy market moves will happen when you force investors to take on risk and chase higher yields - hence the term "unintended consequences". Right now, Greece's bond markets are screeching default with 1YR yields soaring to over 528%! 528%!!! Can you even imagine? Something is going to happen there and all the EU bigs are praying that this will be a non-event from being strung along for so many years; wall street reacts much worse to surprise events, not something that has been in the headlines for years and everybody preparing for the inevitable. Its inevitable that Greek defaults - the question is what kind of structure the default will take and if it triggers a credit event on CDS. The worry is a contagion across EU, hitting Portugal, Spain, and Italy next. We will see no sustained uptrend in broader housing conditions if we have another round of equity weakness ahead of us as EU conditions play out. The current environment is still too uncertain that not even a 20% rise in equity indexes over the last 6 months PLUS record low mortgage rates of 3.87% can stimulate new loan demand. 10YR Treasury yields are still below 2%, confirming this uncertainty. Low rates are great, but they are low for a reason. The housing market boomed with rates way way higher than they are today so we should actually look forward to the day that rates rise because that likely means the foundation for a sustainable economic recovery may be in place. I'll take 5.5% mortgage rates and an improving a) economy, b) consumer balance sheet, c) bank lending over 3.87% rates and uncertainty that we see right now any day of the week and twice on Sunday! The bottom may be in but a true reversal in real prices I think is still a few years away. ]]> January Manhattan Market Update tag:www.urbandigs.com,2012://4.1731 2012-02-02T13:27:37Z 2012-02-02T13:57:38Z A: With January in the books lets take a quick peek at how the month ended. Also, I am definitely seeing an 'uptick' in the ticker (Real-Time Listing Updates table for subscribers) as the last week or so has seen... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: With January in the books lets take a quick peek at how the month ended. Also, I am definitely seeing an 'uptick' in the ticker (Real-Time Listing Updates table for subscribers) as the last week or so has seen an average of 25-30 new deals signed a day - up from say 15-20 new deals signed a day. Although 1 week is not enough time to call a new trend, its the latest information we have on in the field production for the Manhattan marketplace. It looks like our active season is finally starting to kick into a higher gear. First some charts. MONTHLY CONTRACT SIGNED TOTALS FOR MANHATTAN csgnJan2012.jpg Our system shows that Manhattan REBNY brokers put 615 new deals into contract in January, 2012. This production level is: -- down 5% from January 2011 -- down 12% from December 2011 Right now the 30-day pace of NEW DEALS SIGNED is in the mid 600s, up from mid/high 500s for much of January; this is what tells me the market is starting to pick up as the real-time ticker captures REBNY brokers updating ACTV listings to a CONTRACT SIGNED (CSGN) state. By looking at the monthly bar chart above you can see that the last two February's saw deal volume in the mid-800's - so we still have some more work to do to get us on par with those past levels. Lets move on to supply trends. MONTHLY NEW ACTIVE LISTING TOTALS FOR MANHATTAN newactvjan2012.jpg Our system shows that Manhattan REBNY brokers added 1,539 new listings to the marketplace in January, 2012. This production level is: -- down 8.8% from January of 2011 -- up 139% from December of 2011 This is why you should always compare a month's production to the exact same period in prior years - one may look at a month to month rise of 139% in new supply in an otherwise tight market as a big positive! However, that interpretation is misleading because historically December is the weakest month for new supply while January is one of the strongest months for new supply. As discussed yesterday:
JANUARY NEW LISTING SUPPLY HISTORY January 2008 --> 1,918 new listings hit the market January 2009 --> 2,031 new listings hit the market January 2010 --> 1,829 new listings hit the market January 2011 --> 1,688 new listings hit the market January 2012 --> 1,539 new listings hit the market
One can easily see by this data visual that the pace of supply over the last 4 years has sustainably declined! This trend has been the norm for about a year and a half now. This is the now the 16th consecutive month of year over year declines in new supply to hit the marketplace -- in other words, we are simply not seeing the levels of new supply come to market that we saw in 2009 and 2010! This is one major reason why inventory remains tight, buyers are seeing frustration with the lack of quality/well priced products and sellers are trying to take advantage of these conditions by testing the marketplace with slightly higher asking prices. We will start to track listing price trends in a month or two but I can tell you from what I see so far that the trend is up slightly! This tells me sellers are a bit more euphoric in their ability to procure strong bids in today's marketplace. Buyers are adapting and from the last week or so, seem to be signing deals anyway. We will have to wait 3-5 months for these deals to close and get filed with ACRIS before learning price discovery and where those bids are coming in! Ill keep my eyes on the data in the meantime! ]]> A Quick Manhattan Market Update tag:www.urbandigs.com,2012://4.1730 2012-01-31T15:42:32Z 2012-01-31T16:08:49Z A: As January finishes out lets take a look at what the Real-time ticker is telling us and how the first month of the year performed. First, a quick look at the Manhattan Market Ticker which counts: - daily new... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: As January finishes out lets take a look at what the Real-time ticker is telling us and how the first month of the year performed. First, a quick look at the Manhattan Market Ticker which counts: - daily new deals signed across the Manhattan market - daily new active listings across the Manhattan market ...and shows us a weekly and monthly pace to easily see market tick ups and downs. If the market were to start surging or shut down, this ticker will be the first tool to identify it. ticker_jan31.jpg I want to point out that the 47 deals signed yesterday (red box) is the highest daily deal volume that I have seen so far in 2012; hopefully a delayed start to the season. However, 1 day 'does not a trend make' so we should look to the 30-Day pace (blue box) to more broadly measure how the market is performing right now. We count 591 new deals signed over the last 30 days; relatively sluggish compared past January's. Here is how I would interpret what those 30-Day CONTRACT SIGNED #s are telling us about real-time market conditions (read the end of this post for more details): 1) anything below 550 is a very slow market (post-Lehman was in the low 300s) 2) between 550-650 is a slow market 3) between 650-800 is normal market 4) between 800-900 is normal/active market 5) between 900-1,000 is an active market 6) anything above 1,000 is a very active market We are in the #2 range right now and ticking higher over the last week. There is a better way to visualize this so lets take a look at monthly deal volume for Manhattan markets going back to January 2009:
MONTHLY CONTRACT SIGNED TOTALS FOR MANHATTAN
csgn_jan2012.jpg This is the easiest way to see a) how the month-to-month trend is doing and at the same time, b) measure the year-over-year performance. In real estate we tend to look at how this January performed relative to past January's to filter out seasonality. The above chart tells us: 1. We are trending down from last month where we booked 702 new deals signed...and, 2. We are trending down 7%-8% or so from January 2011 and January 2010's production levels. January 2009 registered 317 deals signed and marked the height of fear in the marketplace. Tomorrow the January bar will go live on this chart in our Monthly Charts section. Now that we looked at pace of new demand, lets consider the pace of new supply. By looking at both trends we can come up with some relatively easy but accurate interpretations on current conditions; such as...: SITUATION # 1 - If the pace of demand is relatively sluggish & the pace of supply surges, the market is under stress and leverage can quickly shift to the buyer. If these conditions worsen and the trend sustains itself for say 3-4+ months then its very likely deals in the marketplace are getting done at a new lower price level; as sellers who must sell are first hesitant, then forced to hit lower bids. or.. SITUATION # 2 - If the pace of demand is relatively sluggish & the pace of supply declines, the market is not nearly as stressed as situation #1 because less supply is muting the decline in demand. Leverage likely remains balanced between buyer & seller with less options on the market for buyers to choose from. Market will continuously show pockets of strength and weakness based on the quality of the property and the need for the seller to liquidate (pricing). We can see from the Market Ticker above that the market produced a pace of 1,513 new active listings (orange box) over the last 30 days. Here is how that compares to the last 4 January's: JANUARY NEW LISTING SUPPLY HISTORY January 2008 --> 1,918 new listings hit the market January 2009 --> 2,031 new listings hit the market January 2010 --> 1,829 new listings hit the market January 2011 --> 1,688 new listings hit the market January 2012 --> on pace for 1,513 new listings, down 10.3% or so from last January With new monthly supply continuing to decline and total inventory tight, we fit into situation #2 - "Leverage likely remains balanced between buyer & seller with less options on the market for buyers to choose from". By Q2 I will be able to delve deeper into price action across the markets once development on new sales tools are finished. In the meantime, we should see a sustainable rise in new deal volume over the next 4 months as MARCH through JUNE are by far our seasonally most active months for new deal volume...time will tell! ]]> Talking Comps Analysis / The SE Condo Index tag:www.urbandigs.com,2011://4.1706 2012-01-25T14:04:32Z 2012-01-25T14:19:03Z A: I find myself getting into more and more talks about comps analysis lately and just wanted to put some thoughts into an article. My main point will continue to be: perform a comparable market analysis using the least amount... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: I find myself getting into more and more talks about comps analysis lately and just wanted to put some thoughts into an article. My main point will continue to be: perform a comparable market analysis using the least amount of adjustable variables as possible! The more variables that you introduce that require adjustments, the more you will degrade the ultimate analysis. The simple solution to this is to stay in building, but the ideal solution is to stay within the same line of the target apartment. However, in the real world, data is not always available and exceptions must be made. Lets discuss. (originally published October 28th, 2011) One fallacy that just rubs me the wrong way is when brokers start to justify higher property expectations using sold comps from a different building when there are perfectly good comps to use in the same building. The reasoning for this is usually always the same, "the in-building comps are too old, I never use a comp that is older than 3-5 months old". To that I say Hogwash! Let me explain. #1 - First off, when trying to find out where the market is today relative to a closed deal do NOT go by the sale date of the comparable sale! Rather you should focus on when the sold comparable was SIGNED INTO CONTRACT to see how the market has changed since! Sure the deal may have closed 90 days ago, but for all you know the deal was signed into contract 7 months ago and had a delayed closing! Here is an example: -- Unit is signed into contract April 2011 -- Unit closes August 2011 after a delayed co-op board review and closing Market conditions at the time of contract execution is what matters most; not the market conditions when the deal ultimately closes. #2 - By leaving the building and using an outside building's sold comparable for an analysis, you are introducing the following variables that are impossible to quantify: a) building service level b) building financials c) banks willingness to lend to building based on bldg's unique characteristics d) building amenities e) building policies & restrictions f) building type (yes, I had brokers compare an ACTV co-op to a SOLD condo to argue for a higher bid from my client) g) school zone etc..How any one buyer values changes in Building features noted above is highly subjective! So, do yourself a favor and focus on sales in the same building as the target unit where these variables are constant! #3 - By leaving the building and using a different unit altogether, you are introducing the following variables: a) different layout b) different size c) different carrying costs d) different exposure / views e) different levels of natural sunlight etc.. Think of the "Im using a recent sale in another building" argument now? Rather than keep all those variables constant by staying in-building and adjusting for a) floor, b) time, and c) renovations, you would have to adjust for 11-12 additional variables that quite frankly nobody has any means to quantify anyway? In Manhattan, every building is its own little unique marketplace. Do not degrade a comps analysis and make more work for yourself simply because a highly relevant sale is 'deemed' too old to look at. In today's world, we have different companies spending vast amounts of money to sanitize data and build all sorts of applications so that brokers & consumers have incredibly useful tools to help service their clients. We at UrbanDigs like to consider ourselves one of these technology companies, Streeteasy is the father and started it all, RentJuice is making ground in the landlord management business, Buyfolio built an amazing broker streamlining tool, and NabeWise is full of interesting neighborhood information. But the tool I am referring to for this discussion is Streeteasy's Repeat Sales Condo Index for Manhattan. By only using repeat unit sales and a bunch of 'magic dust', as SE calls it, we have a tool that allows us to track Manhattan price action fairly accurately - by far, its the best tool out there for doing time adjustments on any comparable market analysis. To me, the index fits very nicely into how this market has behaved in the years up to peak, and in the years after peak. Sure there are outliers and individual sales that buck the trend, but in general, its a trustworthy tool to get a good idea of how today's market compares to a point in time in the recent past. Here is how I do time adjustments when putting together a Comps Report for a client: --TARGET UNIT 17A ASKING $1,500,000 --SAME LINE COMP UNIT 20A (3 floors higher and in similar condition) SOLD FOR $1,375,000 & DEAL SIGNED ON OCT-2009 *Many brokers would ignore this in building same-line, same layout, same views, same renovated comparable sale simply because its 2 years old - I would argue against that because its very likely the closest match to the target unit! Then I go to SE's Condo Index and compare today's # with where the index was when the comparable unit was signed into contract on OCT-2009 (story from August 2011 so #s are from that time): se_condo_index.jpg Then its just some simple math as I point out on the above image: STEP 1: Subtract 1,855 - 1,760 = 95 STEP 2: Divide 95 / 1,760 = 0.0539 STEP 3: Convert 0.0539 into percentage 5.4% This is not trigonometry! Its simple math that any broker can do. So according to the SE Repeat Condo Index, the market today is roughly 5.4% higher than it was back in late 2009 - and that kind of jives with most brokers' experience in the field over the last two years or so as we saw a progressive reflation from early 2009 lows. Simply apply the 5.4% to the comparable sales price you are analyzing: $1,375,000 * 0.054 and you come with a positive time adjustment of $74,250 - added together equals $1,449,250. That leaves you with 1 last adjustment for being two floors higher. Two floors is likely not a drastic difference in light/view so lets say $15,000 per floor, or a floor adjustment of $30,000 and you got your fair market price opinion done! $1,449,250 - $30,000 (floor adjustment) = $1,419,250 I would expect bids to come in around the $1.42m range for this target apartment that is on the market asking $1,500,000 and I didnt have to worry about adjusting for a different building, a different layout, a different apartment size, different views/sunlight, different carrying costs, different bldg amenities, etc! Its a clean analysis using the most recent bid for the closest match to the target property that we have data for; without exposing the analysis to variables that otherwise would degrade the analysis! CONCLUSIONS: Just because a past sold comparable is more than 6 months old doesn't make it useless! In fact, its significantly more useful than switching apartment lines or worse, switching buildings to justify a deal price. If you have to use a different line in the same building, fine, but then the job is to find relevant apartment types to compare; i.e., 2BR/2BTH vs other 2BR/2BTH sales in the bldg in different lines. We have tools at our disposal today to help us do these reports and to adjust for time, that we did not have years ago; so I urge you to USE THEM!! Like anything new, it will take some time to get comfortable with a new method over what you are used to but in the end I strongly believe the service you provide will benefit. Only go outside the building when there is no data to analyze, as these types of analysis (townhouses, walkups, etc) are the most challenging ones to produce. Cheers! ]]> Manhattan Neighborhood Supply Trends tag:www.urbandigs.com,2012://4.1729 2012-01-22T14:57:51Z 2012-01-22T18:15:13Z A: As we get into the final days of January, lets take a quick look at how supply trends have been faring across Manhattan. In this post I will show you the "% CHG" in Active Supply trends for all... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: As we get into the final days of January, lets take a quick look at how supply trends have been faring across Manhattan. In this post I will show you the "% CHG" in Active Supply trends for all Manhattan neighborhoods over the last three months & the last 12 months. The 3-mth trend will tell us how recent supply trends feel 'in the field' right now as buyers and their brokers seek out new product to see. The 12-mth trend will give us a broader view of the neighborhood's supply trends and tell us where we are today relative to the same time last year. In general, so far there has not been the usual surge in supply that we got used to for the month of January in this marketplace. Lets discuss. The data doesn't lie so lets get right to what the new supply (active inventory) #s are telling us. Remember, our "Active Inventory" trends count all active exclusive listings by REBNY agents that are shared through the Rebny Listing Service: 1) are brand new to the market 2) have been re-activated from a prior "off-mkt" listing state 3) have been updated by the listing agent once in the last 30 days 4) have been "Active" on the market for less than 2 years NEIGHBORHOOD SUPPLY TRENDS: 3-MTH & 1-YEAR % CHG *sorted by 1YR % CHG Tribeca: 3-MTH -7.6%, 1-YEAR +23.5% East Harlem: 3-MTH -8.6%, 1-YEAR -2.8% Upper West Side: 3-MTH -13.2%, 1-YEAR -3.8% LES/East Village/Union Square: 3-MTH -18.3%, 1-YEAR -4.7% Upper East Side: 3-MTH -7.4%, 1-YEAR -4.9% Midtown West/Clinton: 3-MTH -12%, 1-YEAR -6.6% Midtown East: 3-MTH -13.2%, 1-YEAR -7.2% Murray Hill/Kips Bay: 3-MTH -11%, 1-YEAR -8% Fidi/Civic Center: 3-MTH -17.4%, 1-YEAR -8.8% Battery Park City: 3-MTH -5.6%, 1-YEAR -9.3% Chelsea/Midtown South: 3-MTH -10%, 1-YEAR -10.8% Gramercy/Flatiron: 3-MTH -25.7%, 1-YEAR -13.6% Soho/Noho/West Village: 3-MTH -22.3%, 1-YEAR -14.5% Harlem/Morningside Heights: 3-MTH -14.1%, 1-YEAR -18.5% Inwood/Wash. Heights: 3-MTH -9.7%, 1-YEAR -21.9% Harlem/Hamilton Heights: 3-MTH -12.6%, 1-YEAR -31.1% This should visually tell the whole picture of the last 12 months of Manhattan supply trends! Sellers, we need more listings!!! General Conclusions: With the exception of Tribeca that showed a noticeable year-over-year rise in supply (10.8% rise in co-ops, 27.2% rise in condos), every single neighborhood experienced a drop in supply from this time last year. This is consistent with discussions over the course of 2011 regarding 'Monthly New Supply' trends and the conclusion that "we are simply not seeing the levels of new supply come to market that we saw in 2009 and 2010". Typically this is the time of year when 'new stuff' starts to come onto the marketplace. Right now we are on pace to show a monthly total of 1,195 new listings for this January. For some perspective, the last four January's showed the following new supply hit the market: January 2008: 1,918 listings came to market January 2009: 2,031 listings came to market January 2010: 1,829 listings came to market January 2011: 1,688 listings came to market January 2012: ??? Again, the real-time ticker shows us on a monthly pace for 1,195 new listings to hit the market. I would expect this # to rise as we close out January, but I'm questioning if we are seeing enough new supply to break the 1,688 level that we booked for last January. Time will tell. One might make the predictive statement that with less supply coming to the marketplace, it will be more difficult to see a rise in new deal volume. Frustrated buyers waiting for new supply may decide to put their search on hold until market dynamics change and more supply starts to come on. It's too early to analyze new deal volume right now because its very possible that 100s of deals are currently "in the attorney process" right now; which is impossible to track since brokers very rarely use the 'Accepted Offer / Contract Out' listing status. This is the major reason why the uptick in new deal volume tends to start in February - first the stuff comes on, then the buyers bid, then the attorney's get going, then the deal gets signed and only then do we capture it. I'll start to dig into this years bonus season production as we get closer to mid February. ]]> How to Interpret The Trend: The Anatomy of a Chart tag:www.urbandigs.com,2012://4.1728 2012-01-18T18:26:07Z 2012-01-18T18:36:21Z A: Interpreting real-time Manhattan charts could at times be very confusing, leaving us to wonder what the ultimate market signal is that we may be missing. Between positive and negative correlations and seasonality, are the charts telling us that the... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: Interpreting real-time Manhattan charts could at times be very confusing, leaving us to wonder what the ultimate market signal is that we may be missing. Between positive and negative correlations and seasonality, are the charts telling us that the market is weakening, strengthening or simply 'bouncing around'? Enter Ana Maria Sencovici, agent at Douglas Elliman and publisher of The Apple Peeled, who had the great idea to discuss "How to Interpret The Trend: The Anatomy of a Chart" here on UrbanDigs. I knew a long worded discussion with numbered points might be difficult for some to digest, so it was Ana's idea to visualize a basic Manhattan chart and simply circle different trends with an explanation of the market signals it may be telling us. A thousand thanks Ana for the help in putting this discussion & visual together! Lets take a simple look at Manhattan Pending Sales vs Active Supply trends since January of 2008, and see how we can break down different trends over the last 4 years: AnatomyofChart1.gif The basic trend types as outlined in the above image: #1 The Positive Correlation - occurs when both supply and demand trends rise or fall together. When they are rising together its a sign of a pickup in general market activity and usually a moderately strong market signal. We usually see a positive correlation in the first 4-5 months of the calendar year as new supply comes to market and buyers step up deal signings. When they fall together its a sign of broader market sluggishness as both the pace of supply & demand decline. When sellers lose confidence that they can secure a strong big in the current marketplace, they have a tendency to remove their listing from the market. Those that must sell for whatever reason will make up the bulk of supply as those testing the market fade away. #2 The Negative Correlation - occurs when both supply & demand trends are in opposing directions. Generally indicates an ongoing shift in the marketplace either to the upside or downside: Positive Market Signal: when supply falls but pending sales rises Negative Market Signal: when supply rises but pending sales falls #3 Off-Market Seasonality - occurs when supply falls sharply but the pace of demand stays relatively constant. Might indicate a slight leverage advantage to the seller as supply tightens up, but more than likely it is a general market pause as sellers use a holiday break or slow summer market to "freshen up" a listing. As supply falls, many buyers tend to pause as well until more inventory comes back to market. #4 Gap Narrows - occurs when one measure outpaces the other and effectively "closes the gap" between the two. Could indicate either a positive or negative market signal: Positive Market Signal: when the rise in pending sales outpaces the rise in new supply and may eventually cross if supply falls enough Negative Market Signal: when the rise in supply outpaces the rise in pending sales OR the fall in pending sales outpaces a fall in supply. Turns into a more negative signal as the lines cross if pending sales falls enough There you have it! I'll hope this generates some questions, especially if my conclusions need editing? Would love some opinions as interpreting the Manhattan trends is what this site is all about!! ]]> Bonus Bummer: Another Test for the Manhattan Market tag:www.urbandigs.com,2012://4.1727 2012-01-17T19:12:39Z 2012-01-17T23:58:08Z A: Wall street bonuses are starting to creep in and talk is that comp is down between 20%-60% or so, a huge range. Job losses in credit at the big banks are concerning as fixed income got whacked. All the... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: Wall street bonuses are starting to creep in and talk is that comp is down between 20%-60% or so, a huge range. Job losses in credit at the big banks are concerning as fixed income got whacked. All the worries about regulation post credit crisis and how the 'securitization revenue game is finally over' seems to becoming reality for 2011 bonuses. Articles talk how bonuses this year are expected to be at their lowest levels since 2008 levels. Translating to the Manhattan markets, how will this affect the depth of the buyer pool and new deal volume; especially in the $2M+ segments of the market? Time will tell and I'll be tracking it. We should note that since 2011 saw such a surge in high end deals over $5M between March and July, I think we have our work cut out for us to break those levels when we ultimately compare market performance on a year over year basis. Off the bat, I would expect Q3-2012 to have a hard time beating Q3-2011! So expect poor year over year numbers down the road. This is simply another test for the Manhattan marketplace, especially the high end, as we head into our 'active' selling season. I discussed thoughts on this year's bonus season back in September and here are the bullet points that I am hearing from my contacts today: #1: Overall Comp down between 20% and 60% #2: Retention bonuses very hard to come by right now compared to years past #3: If 2010 was 2/3 cash, 1/3 deferred then 2011 looks to be 1/3 cash, 2/3 deferred - in other words, cash component of comp is down again #4: Deferred bonuses from years past are vesting into a down stock market for banks - what compensation was worth in 2010 is worth noticeably less today #5: Fixed income job losses at big banks - talk about how all the jobs derived from the 'profit machine' from the securitization process seem to disappearing This has a tendency to impact confidence among those wall streeters looking to buy or sell, upgrade or downgrade, as they wait for their compensation package to come in. I'm even hearing whispers of situations where the "bonus is that you get to keep your job". From my end the chatter seems consistent so I welcome any outside opinions on the topic. Here are the recent articles discussing the 2011 Wall Street Bonus Season: WSJ.com: "Bank Pay to Be Lowest since 2008" -
"As banks prepare to report fourth-quarter results and make final bonus decisions for 2011, total compensation is likely to be the lowest since 2008, when the financial crisis destroyed some firms and left many survivors on government life support. At Goldman Sachs Group Inc., many of the roughly 400 partners can expect to see their 2011 pay cut at least in half from 2010, according to people familiar with the situation. Pay for some employees in the New York company's fixed-income trading business will shrink by 60%, with some workers getting no bonus, these people said. Morgan Stanley is expected to shrink bonuses for some investment bankers and traders by 30% to 40% from 2010, said people familiar with the matter. Pay worries have been mounting up and down Wall Street for months amid lower trading revenue, languid deal-making, new regulations and anxiety about the global economy. Other pressures include weak financial-company stock prices and sour public sentiment that culminated in the Occupy Wall Street encampment in New York."
BusinessInsider.com: "Morgan Stanley Cash Bonuses Will Be Capped At $125k" -
Responding to a difficult environment for Wall Street, Morgan Stanley plans to tell employees this week that bonuses will drop sharply, with cash payouts capped at $125,000, according to people familiar with the matter. Some top executives will receive nothing now, deferring their 2011 payouts until the end of this year. The New York-based bank, run by Chief Executive James Gorman, will defer the portion of any bonus past $125,000 until December 2012 and December 2013, according to one of the people familiar with the matter. Mr. Gorman and the other nine members of Morgan Stanley's operating committee, the firm's ruling body, will defer their entire bonuses for the year, this person said, collecting them later.
NYMAG.com: "Wall Street Bonuses Will Be Way Down" -
"Companies definitely have to realize the party as they know it is over," explained an analyst. Another said, "Obviously this is not a good year for Wall Street compensation and an awful lot of the pressure is going to fall on managing directors," while one warned, "We do not expect a robust recovery in 2012." All of the doomsday forecasting goes along with estimates of a 27 to 30 percent fall in compensation overall, with employees at Goldman Sachs and Morgan Stanley possibly seeing their pay for the year halved. The smaller numbers are owed to "lower trading revenue, languid deal-making, new regulations and anxiety about the global economy," and come amid layoffs industry-wide.
It is what it is and Manhattan will do what its going to do, regardless of discussing reality on a site like this. The question really becomes, "where are bids coming in today in all segments of the market and are sellers hitting those bids?"...this is the question that we typically have to wait 2-3 months to find out as deals go to contract ultimately close and become public record. As of now, here is a quick look at Manhattan Pending Sales (green) vs Active Supply (red): bonus_seasons.jpg 2011's active season lasted until mid June and the high end stayed hot until early August - how will this year compare? My thinking is that we won't be able to beat out 2011's active season in part due to the topic being discussed. Here are the #s we have to beat along with how I interpret deal volume: 2011 MANHATTAN MONTHLY DEAL VOLUME January 2011 saw 647 new deals signed - slow market February 2011 saw 844 new deals signed - normal/active market March 2011 saw 1,048 new deals signed - very active market April 2011 saw 1,006 new deals signed - very active market May 2011 saw 951 new deals signed - active market June 2011 saw 988 new deals signed - active market In terms of monthly new deals signed, interpretations should be as follows: 1) anything below 550 is a very slow market (post-Lehman was in the low 300s) 2) between 550-650 is a slow market 3) between 650-800 is normal market 4) between 800-900 is normal/active market 5) between 900-1,000 is an active market 6) anything above 1,000 is a very active market Mid month right now the 30-day pace of new deals signed is a weak 581. I'm expecting this # to rise noticeable as the last two weeks of January play out. Time will tell and I'll continue to monitor new deal volume/supply and sales trends as 2012's active season unfolds. ]]> So...How's the Market Doing? Expect Ticker to Jump tag:www.urbandigs.com,2012://4.1726 2012-01-13T14:08:22Z 2012-01-13T14:40:48Z A: So the market managed to pull out 702 new deals in December. This is relatively flat compared to last December but down 17% from December of 2009. The 2009 market was crazy volatile and saw a delayed seasonality as... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: So the market managed to pull out 702 new deals in December. This is relatively flat compared to last December but down 17% from December of 2009. The 2009 market was crazy volatile and saw a delayed seasonality as buyers waited for stability before jumping back in - so no surprises there. All in all this seems very normal to me. If Manhattan had a VIX, we would be around 17-18 now. Back in 2009 it was probably over 50. Buyers today expecting to price in future downside risks from events that have not played out yet, are finding this market very frustrating. Just finding well priced quality product is proving difficult. The side effect is more demand for rentals. Have you seen the latest rental #s published? You got average rent rates up 9.5% from last year with vacancy rates back below 1%! Renters can kiss mass landlord concessions good bye for the next year or so. It really is amazing what this market is able to sustainably absorb. Anyway, lets take a check on the ticker and see how recent deal volume is doing and explain why we should expect a jump in the 30-day 'contracts signed' # as we finish out the last 2 months of January. Here is a quick look at the Real-time Manhattan Market Ticker, showing us Daily/7-day/30-day views of new supply to come to market and new deals being signed: Untitled-7.jpg As of this writing (last night), over the last 30 days the Manhattan market has seen: 979 new listings come to market (blue box) 651 new deals signed into contract (red box) This is the most accurate way to check mid-month to see how that month is trending. For some perspective, consider this: JANUARY NEW LISTING SUPPLY HISTORY January 2008 --> 1,918 new listings hit the market January 2009 --> 2,031 new listings hit the market January 2010 --> 1,829 new listings hit the market January 2011 --> 1,688 new listings hit the market January 2012 --> ??? Its clear that at this point we are way under trend for new supply for this time of year. Sellers, are you listening? By looking at the market ticker above, I can tell that so far January is on pace for 979 new listings to hit the market; significantly less than past January production. But there is one bright spot regarding how the 30-day ticker works that we should point out. The 30-day ticker that is counting 979 new listings right now is currently tallying up information between the dates of December 14th to January 12th - which is the past 30 days. We all know that the last 2 weeks of December didnt see any new listings come in, so there are 2 weeks of very weak data embedded in that 979 total. As we finish out January those weak last days of 2011 will be filtered out, as new data comes in the front end to replace it. Remember, its a 30-day tally and every day it moves one notch forward gaining the new information today and losing the 30th day's information in the tail end. The point? Expect this # to rise noticeably over the next 2 weeks as the weak end to December is filtered out of the count. The way I know this is by looking at the same market ticker but focusing on the 7-day trend instead of the 3-day trend...here take a look: Untitled-8.jpg Manhattan saw 450 new listings come to market over the last 7 days (green box)! If this weekly pace continues we should see over 1,800 new listings come to market by months end. This is how you use the weekly trend to see which direction the monthly trend might tick in the future. Expect that 30-day New Active # to jump from 979 today to well over 1,000 over the next few weeks. Same logic goes for the 30-day Contract Signed #. The interesting twist as of now is that the same is NOT true for the current weekly pace of Contracts Signed. Weekly deal volume is on par with the current 30-day trend of 651 deals signed. If history is any guide, deal volume will ramp up as we get into February and buyers have a chance to bid on new property that comes to market. First the inventory comes on and then the deals follow. So far this past week, lots of listings are coming on...so lets keep that trend alive because this market needs new product that is realistically priced! Buyers are waiting!!! ]]> Tribeca Co-op vs Condo Market / Flaws of Small Sample Size tag:www.urbandigs.com,2012://4.1725 2012-01-11T14:43:34Z 2012-01-15T13:52:13Z A: Wanted to have a quick discussion about a common problem that I often encounter when discussing UD real-time data tools with fellow brokers and clients. Lets use the Tribeca market as an example so the discussion can be a... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: Wanted to have a quick discussion about a common problem that I often encounter when discussing UD real-time data tools with fellow brokers and clients. Lets use the Tribeca market as an example so the discussion can be a market update as well. Every broker out there would like to be able to provide accurate information on exactly what their client is buying or selling into. For example, what is happening in the Tribeca, $700,000 to $850,000 price range, 1br/1bth, postwar full service doorman condo market that allows pets and has a building roofdeck. So they ask me if I can add in that functionality but I try to explain that if they get too granular in their request for real time charts on a Manhattan submarket, that there will not be enough data to push forth a worthwhile trend - the result could be very high % change numbers and a useless chart that either under or over-exaggerates what is really happening out there. For me the debate has become whether to build an interface that only goes so far but still pushes forward the highest quality trend OR let the user chart whatever they want and know that 1,000s of useless chart combinations exist. Lets discuss. Being in a service industry, Manhattan brokers want to give their clients what they ask for; and who can blame them. From building policies and amenities to manually entering in a small price range. But when it comes to charts on this marketplace, it's best to focus on quality than granularity. For those that don't know: Granularity is the extent to which a system is broken down into small parts For Manhattan charts this would mean the extent to which we allow you to slice & dice the Manhattan market to see whats happening (think bedrooms, bathrooms, postwar/prewar, apt size range, price range, bldg type, bldg service level, roofdeck, building policies, etc.) Sample size refers to the number of objects in the sample For Manhattan charts this simply means how many units are either active, pending or off-mkt. For our interface on UrbanDigs you can't let the user get too granular or else you will risk having too many charts with very low sample size rendering the trend useless. Lets check in on the Tribeca marketplace and compare pending sales trends for both co-ops and condos: tribeca_coopcondo.jpg Some facts: Fact #1 - This is showing you Demand trends (Pending Sales) for the entire Tribeca Co-op & Condo Market! Fact #2 - There are only 5 Tribeca Co-ops Pending right now! Fact #3 - Over the last 2 years, Pending Sales for Tribeca Condos are +8.7% Fact #4 - Over the last 2 years, Pending Sales for Tribeca Co-ops are -45.5% Now lets see what happens when you want to see only the Tribeca Co-op market with 2+ bathrooms and priced between $1M-$2M (getting more granular): tribeca_coopcondo22.jpg Only 1, and the chart is basically useless. The trend went from 4 to 1 and is down 75% over this time period. If 1 more unit goes to contract, it will go to 2 and show a quarterly rise of 100%. Useless. Interpretations might be: Interpretation #1 - Tribeca 2+ Bath Co-op Market must be really weak Interpretation #2 - Tribeca 2+ Co-op Market likely has little to no supply I understand this is a section of Manhattan that we all know has hardly any inventory, but that is the point of the discussion. This is the reason why we have chosen not to add the following details to our chart interface (at least at this time): - building service level (f/s drmn, p/t drmn, elev only, walkup) - pet policy - private outdoor space - prewar/postwar - smaller price ranges - building amenities (roofdecks, pools, storage, etc.) - monthly carry maximums (maintenance + re taxes) - flip tax (yes, I even get asked to be able to chart out only buildings with flip tax) etc..Imagine how many chart combinations will be useless..you will try to give the client exactly what they want but you'll have no idea what it really means in the end? The point is to build a system that gives you customizability and does not sacrifice showing you meaningful trends. For this case, I would advise my client to focus on the broader Tribeca trend when discussing buy side or sell side strategies since we have significantly more data on it. Would love some thoughts on the topic... ]]> Checking in on Manhattan Price Action tag:www.urbandigs.com,2012://4.1724 2012-01-04T17:57:46Z 2012-01-05T15:41:34Z A: With Q4 in the books and the major brokerage firms releasing their quarterly reports, lets take a quick peak at Median & Average Sales findings and trends. Also, please consider the Q4 price action as a preliminary estimate, subject... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: With Q4 in the books and the major brokerage firms releasing their quarterly reports, lets take a quick peak at Median & Average Sales findings and trends. Also, please consider the Q4 price action as a preliminary estimate, subject to future revision as more Q4 sales roll in after the reports publish date. I'll briefly discuss. The UrbanDigs system tracks sales trends like everyone else except with one exception: we set our sales data to a 90-day delay! The fact of the matter is that 100s of sales that actually closed in Q4 of 2011 have not yet been filed with the city register and not included in the report. This means that the price trends will paint an incomplete picture until enough time passes to allow for all Q4 sales to become publicly available. There are two ways to combat this problem: 1. Revise the reports/findings as more data comes in 2. Postpone releasing findings until most of the data is in We chose the latter for the UrbanDigs system. Therefore, we should come to the following conclusion regarding Q4 sales figures published today:
Consider the Median & Average Price Trends a PRELIMINARY #, that likely will be revised as more data rolls in and future reports are released. I checked with a few major firms about this and it was confirmed that Q4-2011's findings will be revised in future reports. That means when it comes to Q4-2012's report released this time next year, the Median & Average Price trends for this most recent quarter might change.
Just like our country's GDP #s come in as Preliminary Estimate --> Second Estimate --> Third Estimate --> Advanced Estimate (click here to see what I mean), Manhattan sales figures should be similarly revised as quantifiable data rolls in at a lag. For more timely market conditions & trends, we must look to changes in inventory as Manhattan property goes through its life-cycle of ACTIVE to OFF-MKT to BACK-ON-MKT to IN CONTRACT and ultimately to CLOSED. This way we can track the pace of deals signed, the pace of new inventory coming to market, and the pace of listing inventory being pulled from the market - and break down that data/trend anyway we want. Moving on. For sake of ease, I consolidated Manhattan's MEDIAN & AVERAGE SALES trends from the major brokerages & streeteasy.com into this one visual that will show you how Q4-2011 ended as well as Qtr-to-Qtr trends and Year-over-Year trends. manhattan_sales_table.jpg Links to each report are below. This jives with what UrbanDigs real-time trends have been telling us for the past few months. I'm on a mission to get Manhattan brokers to adjust to this tracking system so they always have the entire marketplace in the palm of their hand. Understanding how to interpret the tools and trends is an ongoing process, but I'm doing my best to explain how I use these tools in blog posts. It was easy to see back in mid-November how today's reports would shape up by watching the leading indicators on this site. The discussion on November 14th, "Market Ticking Up / Looking Ahead to Q4" goes into more detail and displays a Pending Sales vs Actual Sales Volume chart with the following conclusion:
pending_acris_nov2011.jpg
Conclusions from this chart: The pace of newly signed Manhattan deals started to slow from its peak in July and eventually bottomed out in October. The pipeline of 'pending deals' today is significantly lower than 3 months ago leading to the conclusion that Q4 sales volume will most likely be much lower than this past Q3. I would also expect slight qtr-to-qtr drops in both median and avg price action given the makeup of deals waiting to close for Q4 - i.e., all price points saw a decline in pending sales during Q3.
Any agent can utilize these same tools to track any segment of the Manhattan market in real time. Market transparency, its a good thing and as more innovations are launched, the efficiency of the marketplace should improve. A plus for everyone involved in this crazy game we call Manhattan real estate! ADD-ON: We show Manhattan inventory at 6,319 as of today January 4th, 2011. This is down 6.7% over the last year and down 14.8% over the last 3 months. I'm seeing inventory trends all over the map in these reports and at much higher levels. Elliman's inventory levels seem closest to our count. 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. ======================= Market Report Links for the above sales table Streeteasy Q4-2011 Report Corcoran Q4-2011 Report Elliman Q4-2011 Report Halstead Q4-2011 Report]]> 2011 Manhattan Co-op vs Condo Neighborhood Review tag:www.urbandigs.com,2012://4.1723 2012-01-03T14:48:27Z 2012-01-03T21:46:26Z A: So which neighborhoods outperformed and which underperformed in 2011? Lets take a quick look at 1YR demand trends for Manhattan neighborhoods below 96th Street that UrbanDigs tracks to see if it was the co-op or condo segments that shined.... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: So which neighborhoods outperformed and which underperformed in 2011? Lets take a quick look at 1YR demand trends for Manhattan neighborhoods below 96th Street that UrbanDigs tracks to see if it was the co-op or condo segments that shined. I broke down these trends to show you the pace of demand for both the co-op and condo markets for Manhattan neighborhoods below 96th over the course of 2011. I put the years inventory trends for the neighborhood in parenthesis. Generally speaking, when interpreting demand trends we should also be cognizant of supply trends - for example, if pending sales falls 25% over the course of a year but supply falls 40% over the same time, then the decline in demand is "muted" by limited supply. On the other hand, if pending sales falls 25% over the course of a year but supply rises 20%, then that is a clear signal of weakness in that local market. How has pending sales trends performed for the co-op + condo markets of Manhattan's most popular neighborhoods in 2011? The data is below with a link to each chart (subscription required): Format = Neighborhood: Pending Sales % change for 2011 - (supply % change for 2011) Upper East Side Co-op Market: Pending Sales +10.6% (supply down 2.2%) Upper East Side Condo Market: Pending Sales -5.7% (supply down 16%) *link to chart Upper West Side Co-op Market: Pending Sales +14.3% (supply down 4.1%) Upper West Side Condo Market: Pending Sales -7.8% (supply down 2.8%) *link to chart Tribeca Co-op Market: Pending Sales -14.3% (supply up 25.8%) Tribeca Condo Market: Pending Sales +57.4% (supply up 46.6%) *link to chart SoHo/NoHo/WVill Co-op Market: Pending Sales -1% (supply down 19%) SoHo/NoHo/WVill Condo Market: Pending Sales -3.7% (supply down 18.8%) *link to chart Murray Hill/Kips Bay Co-op Market: Pending Sales -21.5% (supply up 3.1%) Murray Hill/Kips Bay Condo Market: Pending Sales +30.8% (supply down 27.9%) *link to chart Midtown West/Clinton Co-op Market: Pending Sales +22.7% (supply up 16.5%) Midtown West/Clinton Condo Market: Pending Sales -12.2% (supply down 25.7%) *link to chart Midtown East Co-op Market: Pending Sales +20.8% (supply up 8.5%) Midtown East Condo Market: Pending Sales Flat (supply down 13.5%) *link to chart Lower East Side/East Village Co-op Market: Pending Sales +4.6% (supply down 5.2%) Lower East Side/East Village Condo Market: Pending Sales -60.6% (supply up 1%) *link to chart Gramercy/Flatiron Co-op Market: Pending Sales +3.1% (supply down 11.9%) Gramercy/Flatiron Condo Market: Pending Sales +12% (supply down 17.2%) *link to chart Financial District Co-op Market: Pending Sales +40% (supply down 43%) Financial District Condo Market: Pending Sales +88.5% (supply up 2.5%) *link to chart Chelsea/Midtown South Co-op Market: Pending Sales +26.9% (supply down 2.1%) Chelsea/Midtown South Condo Market: Pending Sales +32.8% (supply down 17.5%) *link to chart THE LEADERS FiDi Condo Market - saw pending sales rise 88.5% over the course of 2011 FiDi Co-op Market - saw pending sales rise 40% and supply fall 43% over the course of 2011 Murray Hill/Kips Bay Condo Market - saw pending sales rise 30.8% and supply trends fall 27.9% over the course of 2011 Chelsea/Midtown South Condo Market - saw pending sales rise 32.8% and supply down 17.5% over the course of 2011 THE LAGGARDS LES/East Village Condo Market - saw pending sales fall 60.6% and supply rise 1% over the course of 2011 Murray Hill/Kips Bay Co-op Market - saw pending sales fall 21.5% and supply rise 3.1% over the course of 2011 Let's see what the new year brings in! Cheers and wishing everyone a Happy, Healthy & Prosperous 2012! ]]> Latest Thoughts on the Manhattan Real Estate Market tag:www.urbandigs.com,2011://4.1722 2011-12-27T18:34:18Z 2011-12-27T22:05:43Z A: As we close out the year, lets take a quick look at the freshest data that is rolling in. The last few weeks of the year are usually seasonably slow in terms of new deals signed, new listings activated,... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: As we close out the year, lets take a quick look at the freshest data that is rolling in. The last few weeks of the year are usually seasonably slow in terms of new deals signed, new listings activated, and new closings filed - so set expectations and strategies accordingly. If history is a guide then we will have to wait til February to see a real uptick up in activity. For now, lets check in on the market ticker and see how the last three Decembers' production stacks up against how we are doing this year. This year over year (y-o-y) look will give us a chance to identify relative strength or weakness without the distractions of seasonality. Current General Manhattan Market Observations (click to see free chart) as of this morning: ACTIVE SUPPLY --> 6,565 actively marketed units for sale *Conclusion: Manhattan supply is tight as inventory is down 7.4% over the last 12 months. We saw a 6 week rise in new inventory after Labor Day, but that quickly ended in late October and the trend has been down ever since. We are currently at the lowest levels of supply for the year of 2011. PENDING SALES --> 1,906 listings In Contract and Awaiting Closing *Conclusion: This broader measure of Manhattan demand is basically flat over the last 12 months. The market saw a surge in demand back in March that peaked out in late June. The high end led the way. This ultimately powered a strong Q3-2011 report. Since then it has been the typical late summer/fall slowdown with your little uptick after Labor Day. Here is a look at the market ticker that is picking up daily listing changes throughout the Manhattan market: ticker_dec27.jpg 7-Day (black box) - Over the last 7 days, 137 new deals were signed 30-Day (red box) - Over the last 30 days, 712 new deals were signed Both of these levels are down from late November. For newbies, here is a quick comment on how this daily Market Ticker works (tutorial here): ** Shows on the left side as "Real Time Listing Updates" - we call it that because it is tracking all REBNY RLS mandated listing updates (every 14 days a listing must be updated) on all Manhattan Exclusive property listed at member firms (excludes fsbo's, non-REBNY members and open listings). I'd estimate the REBNY RLS feed to cover 90%-93% of the Manhattan market. The ticker updates hourly and we get 6-7 updates per day. This tool is as real time as we can get to track demand for Manhattan property. ** The 7-Day & 30-Day counters are MOVING WINDOWS - this means that every day the total count moves 1 notch and at all times has fresh data coming in the "front end" and stale data falling out of the "tail end". Please refer to this diagram as an example of how the often referenced 30-Day column works as of this writing (as you can see, the 30-day #s count from Nov 27th to updates so far included today, Dec 27th) 30dayticker.jpg Over the course of Nov 27th to this morning, there were a total of 712 new Contracts Signed. There was also a total of 773 new Active listings added to the marketplace. Monitoring this Real Time Market Ticker data table will show you supply/demand tick ups and downs as they occur in real time. Its your pulse on the market. Now, what is normal for this time of year? To do this we need some more information, mainly, a chart showing us total contracts signed per month so we have some frame of reference. Whats normal for December? How many deals were signed last December compared to this December, etc.. To do this simply go to Charts --> Broker Updates YoY tab and you will see the following Monthly Contracts Signed chart for the Manhattan marketplace where we can continue the analysis of this Decembers production: dec_yoy_csgn.jpg **The December 2011 bar will be published in this chart on January 1st once all data is in. On this page I can see how many deals were signed in past December's: DEC 2008 saw 349 deals signed DEC 2009 saw 842 deals signed DEC 2010 saw 712 deals signed DEC 2011 saw ??? deals signed Using the Market Ticker tool discussed earlier and shown at the top of this discussion, I can see that the monthly pace of deals signed right now is 712 - so we are trending right at last year's pace of production but noticeably below levels seen in DEC 2009. Id expect that to fall a bit lower before closing out the month. Conclusions: A pace of low 700s for new deal volume in December is not so bad given this time of year. The important thing is that the market saw its usual bottom in September and then ticked up in both October & November - the typical post Labor-Day move for this market. Im not going to put too much weight into the DEC 2009 #s because that year in general saw heavy volatility and a delayed seasonality from the credit crisis (our active season was pushed back to mid/late 2009). All in all, in terms of demand we are a bit more sluggish than last year, with less supply, in what is typically the 2nd slowest month in the calendar year for Manhattan real estate! So we should interpret accordingly and sellers should expect this muted demand trend to continue until February or so. Recall the strongest months for the Manhattan market in my late November discussion.
Manhattan Seasonality - Here is a list showing the top performing months in terms of 'New Signed Contracts' for Manhattan real estate since 2008 - format "MONTH - TOTALDEALS": 1. May - 3990 2. June - 3989 3. April - 3980 4. March - 3899 5. Feb - 3218 6. July - 3126 7. Aug - 3021 8. Nov - 2869* (NOV 2011 almost finished, 30-day ticker # used) 9. Oct - 2788 10. Jan - 2782 11. Dec - 2537* (DEC 2011 not in yet, avg of 3yrs used) 12. Sep - 2482
By far the months of March, April, May & June represent the Top 4 strongest months in the calendar year in terms of new deal volume; so if your a seller and can wait, the holidays and early January is typically a good time to remove and 'freshen up' a listing with the plan to re-list in February; either at or below your last asking price. In the end, its all about your asking price, your level of motivation to sell and your expectations on where bids should come in given relevant comps and current market conditions. For buyers, take advantage of good deals that you may be able to get now before deal volume levels usually rise. Of course, waiting is no problem as long as you raise your expectations for possible buy side competition as newly listed, quality property hits the market early next year. Losing 1 or 2 highly desirable properties to higher bids may affect your aggressiveness when that 3rd desired property pops up. You can always use UrbanDigs real time tools to quantify demand trends both in the market and your targeted submarket. For now, expect a quarterly decline in a) sales volume, b) median price action and c) average price action when the firms release their reports on January 1st and 2nd - I'd be shocked if we rose from Q3 on these 3 levels given our seasonality and how strong last quarter was. Cheers! ]]> Preparing for the Q4 Report / Happy Holidays! tag:www.urbandigs.com,2011://4.1721 2011-12-23T15:51:21Z 2011-12-23T16:28:11Z A: I just wanted to take a moment to wish everyone a very Happy Holidays and upcoming New Year! May 2012 be a safe, healthy and prosperous one!! The Q4 Manhattan report is due out January 2nd and will be... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: I just wanted to take a moment to wish everyone a very Happy Holidays and upcoming New Year! May 2012 be a safe, healthy and prosperous one!! The Q4 Manhattan report is due out January 2nd and will be powered by sale closings that took place between October and year end; deals that were likely signed between late July and October! Always keep in mind the two major lags on closings data: a) it takes 2-4 months to go from contract signing to closing, and b) it takes weeks if not months for that sale to be filed with the city register and publicly recorded. Lets take a peak at how real-time trends in the Manhattan market over the last 3-4 months may impact this upcoming Q4 report that so many use to interpret the current state of the market. Flashback almost 6 weeks ago to November 14, "Looking Ahead to Q4" and you got my early predictions on how the quarter may shape up:
"The pace of newly signed Manhattan deals started to slow from its peak in July and eventually bottomed out in October. The pipeline of 'pending deals' today is significantly lower than 3 months ago leading to the conclusion that Q4 sales volume will most likely be much lower than this past Q3. I would also expect slight qtr-to-qtr drops in both median and avg price action given the makeup of deals waiting to close for Q4 - i.e., all price points saw a decline in pending sales during Q3. "
Whenever you are attempting to interpret how the current market is doing, the answer will vary depending on how far back you are comparing it to. For example, I can say the following statements about the state of the current market and have all of them be accurate: **The market today is trading at a weaker level than it was during the summer of 2007 **The market today is trading at a stronger level than it was during early 2009 **The market today is trading at a weaker level than it was in early 2011 **The market today has ticked up from sluggish levels in September & October All of these statements are true because current trends are relative to the start point in your comparison. So when preparing for a new quarterly report release and attempting to interpret how the market is today compared to a past point in time, usually we focus on: 1. Year-over-Year trends - to factor out seasonality 2. Quarter-to-Quarter trends - to get an idea of price action given latest sale closings This discussion will focus on quarter to quarter trends for Manhattan. Since sale closings are so lagging and reflect a marketplace from 4-6+ months ago, we must look to current Inventory Trends (shifts in inventory trends such as supply and new deal volume, a.k.a. pending sales) for a clue on how the market is doing right now. Back on Nov 14th when I wrote the last discussion on the upcoming Q4 report, I compared closing volume with pending sales to see how the pace of all Manhattan new deal signings might impact future sales volume. At the time (click here for that chart/discussion), sales volume was at its highest levels for 2011 reflecting the very strong market that we experienced back in early 2011 - remember, a rise in new deal volume today will take 4-6 months to impact final sales #s! That is what powered such a strong Q3 report and the rise in both median/avg price trends that came with it - all those high powered deals signed in March/April/May/June closed in July, August & September fueling a strong Q3 report that was released October 2nd. The Q4 findings will report on sale closings for October, November and December that get filed before the reports publication date. Sales volume for these months are dependent on new deal signing trends for July, August, September and October. So in order to understand how the Q4 pipeline of closings may play out, we should look at pending sales trends from July to end of October: pending_june_oct.jpg Click here for larger chart. Forget what is happening in terms of new deal volume in November and December. Production for those months will not show itself until the Q1 2012 report is released in early April. This is what I mean when I say things like, "quarter to quarter trends may not jive with how the market is doing right now". This is also the biggest reason why a market like Manhattan needs real-time tools to track segmented market trends and why readers should be educated on what the quarterly reports are actually reporting on. If you want to see what may lie ahead of you, don't look in your rear view mirror! Now, lets take a bigger picture view of how the leading indicator for Manhattan, Pending Sales, is trending compared to the verifiable ACRIS Sales Trends; remember that the UrbanDigs ACRIS Manhattan Sales trends are set to a 90-day delay to allow time for lagging sales to roll in. If you are confused by the ACRIS Delay and why we engineered the metric this way, please read the discussion "A Glimpse Into The "ACRIS" Closed Sales Lag" written back in March.
MANHATTAN PENDING SALES (green line) vs MANHATTAN ACTUAL SALES (red line)
 salesq4-2011.jpg I would comment on the #s in the chart above in the following way: 1. The rise in pending sales reflected the surge in new contracts signed from early to mid 2011; especially the higher end of the Manhattan market. Subscribers can see monthly contract signings here. 2. That rise in pending sales in early and mid 2011 ultimately fueled a strong Q3 report as those deals eventually closed. The rise in the red line reflects the increase in daily closings filed with the City Register at a lag to pending sales. The latest tick we show for Manhattan sales pace is a level of 57 closings a day back on September 21st - which still reflect Q3 levels of action. For sake of accuracy and to eliminate the need for future revisions to this data, we set the sales volume chart to a 90-day lag. 3. The only way to estimate Q4 closings accurately is by looking at the UrbanDigs Pending Sales trend. The trend highlighted here should represent the future direction of Q4 sales volume (the red line). In this case the leading indicator predicts a noticeable downtick in quarter to quarter sales volume for the upcoming Q4 report. I only discuss broader market trends for these quarterly discussions, but the UrbanDigs system does let you get much more granular to track specific areas and price points across the island. Here are some examples of how subscribers can use UD to further break down these trends and follow markets such as: - The TriBeca $2-$5M Condo market - The SoHo $1-$2M Condo market - The Upper East Side $1-$2M Classic 6 Co-op market etc.. Last year the Q4 report showed a sales volume decline of 14% from the prior Q3-2010 report, with median price declines of 5%-7% or so. This year I would expect steeper sales volume declines from last quarter with similar median price declines. To me, today's market is a tick or two weaker than it was earlier this year. April, May & June of 2011 marked the peak of the progressively reflation we enjoyed for 2+ years that started in early 2009. Since then, we have ticked down in volume and price action. I see todays market trading around late 2005 to early 2006 levels in most price points. Expect a slow market around the holidays and new year, with action coming back towards the end of January. As is usually the case, we should first see new inventory come on in January followed by an uptick in deal volume in February to kick off 2012's active season. ]]> 3-MTH 'Demand' Check for Manhattan Neighborhoods tag:www.urbandigs.com,2011://4.1720 2011-12-17T13:32:56Z 2012-02-11T20:50:46Z A: A quick check on the 3-month pending sales trends for the major Manhattan neighborhoods. The last 3-month pending sales check was two months ago on October 17th, where East Harlem & Gramercy were leading the pack with FiDi &... Noah Rosenblatt http://www.halstead.com/agent.aspx?id=N4R&s=a A: A quick check on the 3-month pending sales trends for the major Manhattan neighborhoods. The last 3-month pending sales check was two months ago on October 17th, where East Harlem & Gramercy were leading the pack with FiDi & Battery Park lagging behind. Let's see how the segmented Manhattan marketplace has performed since! 3-MONTH PENDING SALES TRENDS East Harlem: +36.8% Fidi/Civic Center: +20.9% Midtown East: +16.7% Midtown West/Clinton: +15.8% Tribeca: +13.6% LES/East Village/Union Square: +11.7% Murray Hill/Kips Bay: +7.1% Upper East Side: +3.8% Gramercy/Flatiron: -2.4% Inwood/Wash. Heights: -3% Soho/Noho/West Village: -4.4% Upper West Side: -7.3% Battery Park City: -7.4% Chelsea/Midtown South: -12.3% Harlem/Hamilton Heights: -34.5% Harlem/Morningside Heights: -39.2% You can see how these neighborhoods of Manhattan changed since October 17th, by clicking here. In terms of the broader market change over the last 3 months, you can simply check the Manhattan Market Trends box in the top left of the site: 3-MONTH MANHATTAN MARKET PENDING SALES PENDING SALES (demand) --> +0.9% Out of 16 neighborhoods that the UD system uses to break down Manhattan market segments, 8 of them have outperformed the broader market over the last 3 months. The Leaders --> East Harlem, FiDi, Midtown East & West, Tribeca The Laggards --> The Harlem areas, Chelsea/Midtown South Back in August I did the same check which saw East Harlem as a laggard and Chelsea/Midtown South as a leader. Now the reverse is true - market forces in action as underperforming neighborhoods eventually bounce while outperforming areas tend to cool off after a strong rise. We will build these tools into the UrbanDigs system in 2012 so that we can track supply & demand trends in all the Manhattan hoods more easily; and pinpoint longer term leaders & laggards. For those interested how the month of December has been shaping up, lets first take a look at past 'Decembers' to see what is normal for this time of year: TOTAL CONTRACTS SIGNED FOR PAST DECEMBER's DECEMBER 2008 --> 349 deals signed (credit crisis) DECEMBER 2009 --> 842 deals signed (delayed seasonality / reflation from bottom) DECEMBER 2010 --> 712 deals signed Both 2008 and 2009 were highly volatile markets, so I would focus on last year's total deal volume for the month of December. Last December we produced 712 new deals signed. To get an idea of where we are on pace to end the month, look to the 30-Day CONTRACT SIGNED section of the Real-Time Listing Updates Ticker on the left (the Manhattan Ticker): ticker_dec17.jpg With limited updates in today since its only 9am that I write this, the "monthly pace" of total new deals signed is in the upper 700s. Expect that to drop as we get into the final two weeks of December and the market doesn't produce nearly as many deals as the first two weeks of the month. We probably will end up in the low 700s or so, in line with last year's production for December. ]]>