Inventory Check: More of the Same, High End Price Cuts

A: The reason why I don't post content everyday about Manhattan real estate, is quite simply because there is not much change from my last update on the market! You can't day trade Manhattan real estate, and its not the type of marketplace that will be very strong one day and very weak the next! So, I can't possibly talk about the state of the market everyday and provide new insight with each passing day. With that said, I see much of the same. Buyer's are a bit nervous, seller's seem to be getting a bit nervous too since the Bear Stearns headline shock, sales volume is light and inventory seems to be rising & holding. There are deals to be found, and priced right properties are getting traffic and bids!

Before I continue, let me repeat as I always do, that Manhattan real estate is a market and just like any other market out there, it is not immune to market forces. The difference with Manhattan that makes it much stronger than other local housing markets, is that it lags in recession's and leads out of recoveries. Arguably, we are seeing some signs of a slowdown about 2 1/2 years into the national housing recession. The best reasons for this tend to be:

a) much higher quality/volume of buy side demand
b) healthy mix of buy side demand; Int'l demand on currency trade
c) tight inventory; good products are hard to find
d) minimal exposure to speculators
e) minimal exposure to subprime / weak buyers
f) mostly co-op inventory that blankets against weak buyers
g) trend to live closer to work

etc. etc.. Much of the same that I have always mentioned. BUT, even these market characteristics are not strong enough to make Manhattan immune to a slowdown. The current environment is rooted on wall street and investment banks, so it would be foolish to deny how macro might ultimately affect us. Corrections in our real estate market do occur, are healthy disruptions of growth, and always prove to be temporary that ultimately pave the way for longer term sustainable growth! In short, nothing goes up forever or in a straight line and Manhattan real estate is no different!

So, no one should get all defensive and crazy when one mentions an utter peep that perhaps the Manhattan market is slowing! As I try my best to be unbiased and provide front line info on what I see in the marketplace (tell you like it is without sugarcoating), I'm sure people will see me as the enemy because god forbid you mention a slowdown in Manhattan. What I am saying here should not be a shock to any reader, as I've been discussing it for months.

What I see right now is:

1) continued depression of buyer confidence - its not that every buyer stopped looking, not the case, but there has been an effect in general on buyer confidence. Buyers are a bit nervous, lending rates are higher for them, underwriting standards are a lot tougher on them, they see the headlines, they see their equity portfolio's and if they are employed in the financial sector, they are concerned about job security. This explains the first phase of the correction cycle, where buyer confidence slows down sales volume. This is what we saw for the first quarter of what normally is a very active bonus season.

2) rising inventory - this is the result of #1. Buyer confidence declines, sales volume slows, and inventory builds. Simple math. In the past four months, inventory is up about 40%, from a total of 4,600 listings in Manhattan, to a total today of about 6,500. The second derivative, or rate of change, seems to have slowed in past weeks as the majority of the rise occurred from January to mid end of February. Since then, we have trickled higher to where we are now. My prediction is that inventory will pick up steam as we enter the summer months, when more layoffs are announced and executed, when the recession becomes official leading to more media driven headline shock, and more sellers seek to list properties for sale.

Right now, at 6,500 listings, inventory is still tight and by no means is there a glut. However, most sellers are now behind the curve, especially those sellers that priced way too high because their special broker promised that they are the best and can get that price, and find themselves chasing the current reality of the marketplace. For Manhattan to have a glut of inventory, I would expect total listings would need to be at or above the highest point in the past 5 years or so, and that would mean higher than 7,750 listings or so that we hit in mid 2006. In my opinion, we would need more than 8,250 listings or so before you see a noticeable level of fierce seller competition to move property. To get to this level, a combination of an absence of buyers + increase in sellers must occur; so if we ever reach that level the state of the market would have swung favorably to buyers.

3) high end struggling - it seems to me, although I only have one $3M+ buyer at the moment, that the $3M-$5M marketplace is starting to slow noticeably. Inventory is building and price reductions are significant. When a property at this level gets reduced, it is in the 'hundreds of thousands' increments. Unfortunately, asking prices mean very little to me as what a seller is asking can be significantly higher than the actual market value of the property at any given time. A home is only worth what someone is willing to pay for it.

4) lower end still active - still plenty of buyers in the studio, one bedroom, and lower end two bedroom market place. Its silly to call a $1.3M buyer a lower end buyer, but for sake of this discussion, I'll group them together. Most of my buyers fit into the $650K - $2M range, so that is the market that I see most frequently. Inventory for two bedrooms seems to be rising more quickly than inventory for good studios. One bedrooms for some reason I just can't figure out how the pace of inventory is doing; maybe rising slightly.

All in all, its much of the same! My buyers are quite aware of the current situation and are using my services to find the best deal in their price point and negotiate accordingly. The buy vs. rent decision is clear, and timing the market by renting for a year and buying next year is not a viable option for the majority of them. Having a long term focus is a must (4-5+ years), and understanding what you can afford is critical in such a tight lending market. So, for anyone looking to time the market, understand that most rental leases are for 1 year terms locking you out of buying for a good 8-10 months or so, unless you don't mind carrying two payments for a while! A fine strategy if you are nervous, unsure about your job security, or just don't have enough funds yet to make the purchase.

What I see is based on my business and listings I find; its a big market out there so I usually talk to at least 5-7 other top producing colleagues I know to see if their business activity is similar to mine. For most part it is.

What do you see?

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Manhattan Inventory Check

A: This is for spunky; some of you should know what I mean by this. Curbed had Jonathan Miller's inventory charts a few weeks ago that I would like to revisit. Looking at my real time Manhattan inventory tool, powered by Streeteasy, I see rising inventory but still not enough to change the supply/demand imbalance right now that favors sellers. Lets break it down a bit more as a mid month review.

UrbanDigs NYC real estate data & charts is in BETA for another few months. For now, charts will only show daily readings going back 2 weeks so please bear with us as we tweak this tool to be of the highest accuracy for your future analysis. Daily readings, whether small or large, should be taken with a grain of salt as we finish our BETA testing. Overall though, the data seems to be accurate enough to discuss in posts like this one.

Here is the trend over the past few weeks:

Now, lets go back to Miller Samuel's chart a few weeks ago that showed total inventory trends up to January 2008; click chart to enlarge:

CONCLUSIONS

JAN 2007 TOTAL INVENTORY - 6,000
JAN 2008 TOTAL INVENTORY - 5,500

YEAR-OVER-YEAR % CHANGE - down 7% or so
6-MONTH % CHANGE - up 22% or so

Ok, I'm not a fan of using year over year changes for analyzing inventory because it doesn't take into account the change of investor sentiment accurately, and is going back too far in time and to me that doesn't make much sense. I'm way more interested in more real time trends, say the last 3-6 months, and what inventory is doing here as an indication of more real-time investor sentiment and marketplace supply.

When I look back a year ago, inventory is LOWER! When I look back 6 months ago, inventory is HIGHER. The current trend seems to be up. Going back in time, the bonus season of 2007 (JAN-APRIL) was very active (yes, I wrote about that numerous times right here on urbandigs), in my opinion more active than today's environment, and as a result sales volume was very strong. When you have strong sales volume, you will see a decline in inventory in the months following as deals close and listings are sold off. Combine this with a seasonal slowdown during summer months, and Jonathan Miller's inventory chart for APRIL-JULY 2007 makes a lot of sense. During this time, we saw inventory decline sharply largely a result for deals closed during the active bonus months prior + lack of new product coming to market entering the summer.

Then came September, some 5-6 weeks AFTER the credit crisis began and surfaced to media headlines and stock markets. If we look at inventory since August 2007, we see a rise of about 22% (4,600 units to about 5,600 units today), but lets be fair and check out what happened during these months in past 3 years.

AUGUST through JANUARY MANHATTAN INVENTORY TRENDS

AUG 2004 - JAN 2005 ---> down 9% or so (5,400 to about 4,900 units)
AUG 2005 - JAN 2006 ---> up 18% or so (5,300 to about 6,300 units)
AUG 2006 - JAN 2007 ---> down 12% or so (7,100 to about 6,200 units)
AUG 2007 - JAN 2008 ---> up 22% or so (4,600 to about 5,600 units)

Certainly we can say it's a trend worth reviewing! What makes this time around different of course is the macro environment, the lending environment, credit markets, and investor confidence. I have stated before that I think 2008 will be the year Manhattan inventory reverses course and rises, breaking the declining trend since the top in mid 2006. The main reason: a drop in buyer confidence leading to slower sales volume.

By no means is current inventory favoring buyers, we are still tight and there still is not enough options out there for buyers; an environment that favors sellers. But we must follow these trends and see how they react to the changing environment if we are to be ahead of the curve should fundamentals change here in our great city!

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Manhattan Inventory Trending Higher

A: UrbanDigs Charts, powered by Streeteasy, are still in BETA testing and will be for another few months. Still, the TOTAL ACTIVE inventory category is interesting to keep tabs on since early November. The data includes listings of co-ops, condos, and townhouses for the entire island of Manhattan where the full address is included in the listings and duplicates removed. This way, none of the open listings (W 70s, LUX New Dev, UES 1BR, etc..) spam is included in the data collection!

NOTE: Way too early to put any significance into this and hard to analyze without a longer time range in the charting system. I'll upgrade functionality of charting system once we are out of BETA testing in another 3 months or so! The goal will be to have a more real time gauge of what is going on in Manhattan real estate, so we don't have to wait for lagging quarterly reports! Use at your own risk right now.

Here is the chart showing you the generally upwards trend that total active listings inventory in Manhattan has done since the start of 2008:

Now, we had about 6,000 total active listings in DEC of 2006 and about 4,800 total active listings exactly one year later showing a decline of about 20% in our inventory. Over the past 4 weeks or so as we entered the wall street bonus season, it appears that listings rose about 8-10% or so; again, this is 4 weeks of data and not enough to warrant any conclusions from.

The purpose of this is to simply report on the rise, to state that it is completely normal for inventory to rise at this time of year, and that it will probably continue to rise as more listings come to market. The key factor in my mind to watch out for is sales volume as an indication of buyer confidence given the current macro environment and stock market selloff as a result. Should buyer confidence continue to fall, expect sales volume to be light and inventory & time on market to rise a bit; especially for those properties that are testing the market and pricing significantly above last years comparable sales! All worth watching!!

For those of you actively looking to buy a property, what are you seeing?

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Manhattan Inventory Declining?

A: Well, I'll feel much better talking about this in another 4-6 months when we have a nice baseline of data collected from the Streeteasy tool. But hey, that's way too far out and I hate waiting (like Enigo Montoya who couldn't wait for the man in black to climb the cliffs of insanity!). Anyway, the chart shows a fairly noticeable decline in total active inventory for the island of Manhattan so why not discuss this a bit.

Before sellers get all giddy that inventory is down 5-7% or so in the past three weeks, please know that these systems are in BETA, we are constantly tweaking collection methods and fixing bugs to ensure better accuracy, and that we only collected about 2 1/2 months of data so far! Also, its DECEMBER!

The seasonal aspect of Manhattan real estate kicks in during the tail end of November and most of December as those sellers who do not have to sell REMOVE THEIR LISTING from the open market to freshen it up for a normally more active selling season in the first few months of the year. I think this is the biggest reason for the decline in total active inventory from about 5,300 total units to about 4,950 units or so it is showing now. The market is generally slow in the month of December and most sellers try to enjoy the holiday and their shopping rather than dealing with prospective buyers & brokers. So, we must take this well known trend in mind!

With that said, I expect inventory to rise as we get closer to February & March; right in the middle of the bonus season. Sellers normally re-list their properties, and new sellers usually try to time their marketing with the bonus season to take advantage of the activity so lets see what happens this time around with the data tools & charts clearly displayed!

Any active buyers out there care to back up the decline in inventory OR question it? Would love to know what you guys see.

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NYC Housing - A Brief Update

I am sure very few of the NY real estate cognoscenti out there missed the Wall Street Journal Online's "They'll Take Manhattan -- For Less" article on Friday. For those who did, the article quotes the Corcoran Group real estate brokerage firm saying that inventory in the NYC market is rising and that prices are flattening. It cites third quarter data from Radar Logic, Noah's friend Jonathan Miller's firm indicating that the median Manhattan apartment price fell 3.4% quarter-to-quarter in Q3, but was still up 2.3% year-over-year. Sales volume reportedly declined 11.2% compared with the prior quarter, but was still up year-over-year. Properties were lingering on the market for 123 days, up from 94 days during the 2005 boom period. If you have been reading Urban Digs, this is probably not a surprise. Christine Toes broke the story of proliferating developer incentives - a leading indicator - here a few weeks back, which is also highlighted in the Wall Street Journal Online article. Of course you have heard Noah and me ramble on about the strong and insidious macro headwinds that are proliferating and seem destined to at least dent, if not break, the unstoppable NYC housing boom. So what about activity thus far in Q4? Now that Urban Digs has real time data to look at, I thought I would bring it to everyone's attention......in hopes of keeping some content flowing while Noah is getting some R&R in Jamaica. The data have been available here for a few weeks due to Noah's recent re-design of the site and collaboration with Street Easy, who has cleaned up the data to Noah's exacting standards (once a trader, always a trader). We will eventually have a regular piece highlighting the data as the set gets longer and we learn a little more by tracking it over time relative to other indicators. Understand, this is only a couple of weeks worth of data. This piece is not intended to be an indication of how we will utilize or feature this data in the future, just a reminder that it's already here on the site for your use.
As is evident from the graph, there was a spike up in activity in late November, but we have seen a steady decline since. My guess is that people wanted to get their apartments listed and or get contracts signed before the holidays and we are now in hibernation mode through the holidays....it will be much more interesting to see how the market starts coming back after the New Year's holiday. By then we will have a data series that actually could reflect a trend. As you can see from the second chart however, it would be hard to characterize Manhattan apartment inventory as busting out.

The price cuts, notable in our final chart, coincide pretty well with the increase in both listings and closings...again I would speculate it was due to attempts to move apartments before the holidays...and it looks like it worked.

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Charting System Goes Live

A: I'm happy to announce that UrbanDigs CHARTS are now live! We have partnered with Streeteasy.com to bring to you daily snapshots of what is happening in the Manhattan real estate marketplace. The data is real time and updated daily. The widget on the top right of the page will show you a snapshot of TODAY, 7-DAY and eventually 30-DAY's worth of data for four key metrics that I thought was most important: NEW LISTINGS, PRICE REDUCTIONS, CONTRACTS SIGNED, & TOTAL ACTIVE INVENTORY. The charting system is based on this data.

To access charts, simply click the CHART INVENTORY TRENDS tab at the top of the main content section. That tab section will from now on be your control panel; as I continue to brainstorm what other tools/data may be added in the future. You can also access the TALK REAL ESTATE section from there.

Now, it is very important you understand that as of now we only have recorded data since November 5th, so 14 days. As time goes on, charts will get more useful. For now, feel free to check back daily to see what's going on but DO NOT analyze the charts too deeply as we need at least 6 months of data collected before any trends can be seen. We need a base collection of data first, and that takes time.

Here is how charts will appear, as for the first chart I had NEW LISTINGS & CONTRACTS SIGNED combined together so we can see:

a) what new listings came on to the market
b) what listings are now off the market

...from Manhattan real estate total inventory. Now, TOTAL ACTIVE INVENTORY is not calculated by the difference of these two metrics, as it's a bit more complicated than that (think about listings that are taken off market, or placed back on without ever going to contract)

The two other charts will show you TOTAL INVENTORY & TOTAL PRICE REDUCTIONS. Again, please be patient and wait until we have at least 6 months of data to get any significance from these charts.

As for retrieving the data, Streeteasy.com's systems update every 24 hours (over the wee hours of the morning), and we pull information AFTER this update has been completed. So, data is static with an update every morning basically reflecting what changes/new listings/contracts signed/ etc. that occurred the day before. It is important to note that:

a) Streeteasy often adds new firms who meet their listing standards that can lead to spikes in NEW LISTINGS data every so often
b) Streeteasy is at the mercy of the listing agent updating a property that has a CONTRACT SIGNED. So, its very possible this data is a bit lagging. The data is only as good as the agent that publishes it.
c) Streeteasy does the best job they possibly can, with the resources available to them to get the most accurate picture of what is going on with NYC real estate.
d) Streeteasy data is comprised of exclusive listings with an exact address in Manhattan (open listings and listings without an exact address have been removed for these tools). No representation is made as to the accuracy of this data.
e) Data includes the entire island of Manhattan.
f) Data includes Condo, Co-op, & Townhouse listings ONLY.

Trust me. They are putting forth a great effort in a city that does NOT have any public MLS system and whose data is only as accurate as the agent that publishes/updates it.

With that said, this data and charting system can no way be absolutely perfect. Thats almost impossible. However, after enough time (about 8-12 months) we should establish enough of a baseline so that basic trends can be able to be interpreted, and that is the entire point of these tools!

Transparency is GOOD! I hope you guys enjoy!!!

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Manhattan Inventory: It's Miller Time!

A: Mr. Chartman himself, Jonathan Miller is back with some great stuff as he publishes is quarterly report for Douglas Elliman. Here is the link for all of this quarter's charts; 13 of them in total! In short, the data shows you how powerful blogging can be for those that read daily! As many of you know, I do my best to provide real-time reporting to you guys from street level of Manhattan real estate. I HATE lagging data, no offense Jonathan, I love yours as its by far the best and most credible data mining we have! But, I just wish we had more real time tools to analyze what is going on in the NYC real estate marketplace as it happens, rather than after. Lets start digging.

First off, recall my previous posts on the decline in buyer confidence that I reported on starting in early August, some 10 weeks ago as I first noticed signs that sales volume will probably start to slow a bit:

AUG 9th ---> "New York City real estate still needs more inventory to meet demand. While I am still assessing whether the current credit concerns are infecting us here (nothing yet other than some psychological concern), the more important trends to watch are inventory and price points. "

AUG 27th ---> "Today I would like to discuss the change in psychology that I am noticing due to the 5-6 weeks worth of headlines around the current credit/liquidity squeeze.

...Combine these changes in thinking and what you get is a MORE CAUTIOUS BUYER more willing to sit on the sidelines than to jump in and bid close to ask."

SEPT 24th ---> "However, I have a hunch that July-September sales volume will come in a bit lower than expectations (which will be proven by data released in December or so) resulting in a bottoming out of these declines in inventory. This hasn't happened yet, its just a hunch. I think the headlines of the credit squeeze, along with higher rates and tighter loan standards has had a psychological effect on the buyer pool by pouring some caution into the minds of would be buyers. In addition, I think many buyers are just flat out frustrated by what they can get for their budgets and are choosing to hang tight a bit longer.

Too early to tell, but come early 2008, I would expect these inventory trends to reverse course a bit and start to either bottom out or rise again for the upcoming 2008 wall street bonus season."

OCT 2nd ---> "This report confirms my inventory reports (Sept 24th, Sept 11th, Aug 23rd, Aug 9th) but its the sales volume that I question in the upcoming quarterly report for the months of August, September, & October. My gut is telling me that sales volume will slow resulting in a slight build of inventory for these months!"

On to the charts!

Conclusions: There is a clear tick up in listing inventory as a result of the clearer tick down in sales volume from the month of August to September! This is consistent with the tick down in buyer confidence that I have been reporting on since early August. The theory goes:

BUYER CONFIDENCE TICKS DOWN DUE TO CREDIT CRUNCH ---> BUYERS ARE MORE CAUTIOUS ---> SELLERS PRICING REMAINS HIGH AS INVENTORY IS TIGHT ---> LESS BUYERS JUMP IN ---> SALES VOLUME TICKS DOWN ---> INVENTORY TICKS UP

What started the whole trend is what I have been cautiously reporting here on Urbandigs.com; the change in buyer confidence (real-time reporting is what its all about)! It's all about the buyers! Now, this report is still overall bullish and by no means are the reversals in inventory & sales volume significant enough or long enough to establish a meaningful trend. It simply points out that confidence can change markets and makes it even more important for us to monitor these stats moving towards the wall street bonus season. Will it continue? Will it turn back around? We need more data before making any iron clad statements regarding a change in the fundamentals of Manhattan real estate.

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Manhattan Inventory Slips: Now What?

A: Chart man Jonathan Miller dishes up some good stuff for the Crains New York Business magazine about Manhattan inventory trends. In the report, which includes exclusive listings for co-op, condos, and townhouses for the entire island of Manhattan, total inventory has been on a steady decline since about September of 2006. Since that time, total exclusive inventory fell just under 40%, explaining the strength of the current marketplace here in Manhattan. So now what?

Here is the chart as posted on Matrix:

First off, here are some reasons why I believe in this data that Jonathan makes out so we can all get a better idea of the fundamentals powering the local housing market:

1. It only includes EXCLUSIVE listings. Including OPEN listings will skew the data for analyzing how much active inventory is out there. For all that don't know, an open listing is not an exclusive listing, but rather is an agreement made by an owner with a broker to market the property in the hopes of procuring a buyer client to purchase the property. If the broker brings the deal, the broker gets a 2-3% commission; or whatever is predetermined. Most full service firms do not allow open listings anymore.

A telltale sign of an open listing is a listing that a broker markets without a FULL ADDRESS attached to the webad (such as "W 70s" or "UES 1BR"). Many brokers market open listings for new development inventory in the hopes of getting a phone call and converting that buyer to a client and ultimately getting the deal and commission.

2. Includes Co-ops, Condos, & Townhouses. Exactly what is needed to be counted to get a good idea of total active inventory in the Manhattan marketplace. The Case/Shiller index excludes co-ops and condos, as well as new dev units in their home price index for New York; which led me to write why that index is not worthy of NYC trends.

3. Includes All of Manhattan. Some datasets exclude neighborhoods like Battery Park City or Inwood because most of the deals in Manhattan occur in between the far ends of the island. It's better to just include the entire island's inventory so we can go back and see where trends are heading.

Conclusions: No surprises from what I have stated here recently. Inventory in Manhattan is very tight, and as a result, prices are holding and buyers scramble to find a product that meets their needs.

However, I have a hunch that July-September sales volume will come in a bit lower than expectations (which will be proven by data released in December or so) resulting in a bottoming out of these declines in inventory. This hasn't happened yet, its just a hunch. I think the headlines of the credit squeeze, along with higher rates and tighter loan standards has had a psychological effect on the buyer pool by pouring some caution into the minds of would be buyers. In addition, I think many buyers are just flat out frustrated by what they can get for their budgets and are choosing to hang tight a bit longer.

Too early to tell, but come early 2008, I would expect these inventory trends to reverse course a bit and start to either bottom out or rise again for the upcoming 2008 wall street bonus season.

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Notable Price Reductions

A: I just checked my internal brokerage systems to see how many price changes the market has experienced in the past 7 days (since September 12th), and the result was maxed out at 300. So, I was unable to even determine accurately how many price changes (most are reductions but there are some increases) there actually were. Hopefully this kind of information will be easier to gather in the near future so we can monitor trends. Anyway, here are some notable price reductions on the more aggressive side that may indicate the level of desire of that seller to move the property.

304 Bowery Street; PH 5A

First Came on Market: 9/5/2007
Original Asking Price: $1,400,000
Asking Price NOW: $1,200,000 (reduced $200,000 on 9/18/2007)
Maintenance: $333
RE Taxes: $114
Size: 1,254 SFT
PPSF: $957
Marketed By: Susan Wires of Stribling

225 East 57th Street; Apt 14J

First Came on Market: 7/11/2007
Original Asking Price: $750,000
Asking Price NOW: $650,000 (reduced $49K on 9/17/2007)
Maintenance: $1,396
Size: 1,000 SFT
PPSF: $650
Marketed By: Mickey Roth of Douglas Elliman

230 East 73rd Street; Apt 5H

First Came on Market: 9/9/2007
Original Asking Price: $525,000
Asking Price NOW: $475,000 (reduced $50,000 on 9/18/2007)
Maintenance: $785
Size: 500 SFT
PPSF: $950
Marketed By: Elaine Claymen of BrownHarrisStevens

170 East 80th Street; Apt 14B

First Came on Market: 8/7/2007
Original Asking Price: $675,000
Asking Price NOW: $659,000 (reduced $26,000 on 9/12/2007)
Maintenance: $944
Size: 650 SFT
PPSF: $1,014 (still high but great location, high floor, and xxx mint renovation)
Marketed By: Amy Elfman of CBHK

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New Listings Inventory Check

A: I wanted to follow up on the # of NEW LISTINGS that have hit the Manhattan real estate market by month since the start of the year. I posted on this trend back on July 6th, where I expected the month of July to ultimately show a significant decline from the month of June. While there was a decline, it wasn't as significant as I originally thought it may be. It's important to know that I do the best I can with the data that is available to me. In this case, New Listings are the most error-free dataset I can trend out. Hopefully in near future I can change this so you guys have access to data and charts that I feel would be incredibly useful for buyers/sellers.

Neighborhoods included: Beekman, Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village

Lets get right to it. Here is a chart showing you the # of NEW LISTINGS to hit the Manhattan marketplace each month in 2007; I included September so obviously discount that category. However, today alone I see 74 NEW LISTINGS! This month may prove to be significant towards affecting inventory trends down the road here in New York City.

Conclusions - Hard to say. To me, inventory out there still seems tight and prices holding; properly priced apartments are selling relatively quickly while those that are pricing high and testing are experiencing the normal lengthier time on market. If September proves to have over 1,000 new listings hitting the market, that would make two months in a row of 1,000+ new listings hitting the market here in Manhattan. There are a few new development listings that seem to be contributing to some of the most recent inventory (about 80 or so updated last in past month). These include listings for:

1. 255 E 74th
2. Atelier - 627 W 42nd
3. William Beaver House - 15-23 William St
4. The Brompton - 205 E 85th

How many are truly available at this very moment OR set to be released in near future I don't know. To get this info simply contact the sales office for an updated inventory list and ask how many percent sold the building is.

Looking forward, I hope to make this data easier for you guys to chart out and interpret so you have a better take on the Manhattan marketplace. Please bear with me while I work on urbandigs phase 2; del boca vista.

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"I" is for Inventory: NYC Still Very Tight

A: Readers often confuse statements that I make on this blog and interpret something I say as a prediction of future price appreciation. Not so. I rarely delve into that area as its way too hard to predict what short or medium term price appreciation will be in any given neighborhood of Manhattan. What I do strive for is to report to you what I see in this fast changing marketplace so that you can get a front row seat to any changes before mass media reports on them. I'll also provide my opinions and tips so that you see my opinions on handling the changing marketplace in the best way possible. When I state that 'because Manhattan is 75% co-op, we are somewhat protected from the subprime mess' it does NOT mean I am predicting an overly optimistic picture for future price appreciation. It means that this market is driven by unique fundamentals that if understood, will explain why we have not seen a correction thus far. Which brings me to today's post on inventory.

Inventory in the New York City real estate market is still very tight. My clients, who range in price point from low $300's (yes I still work with all buyers) to low $2M's, are still having trouble finding products that meet their living needs. Its not to say that there is absolutely nothing, it's just that options are very limited and what is available usually has more than one item that discourages them from bidding.

These clients are not picky either. They know that compromise is inevitable and that they will have to buy a property that has at least 'something' to it that they dont like. The key is, what that 'something' is. It's my job to make sure that the 'something' is NOT a permanent feature that will eventually limit resale profit potential. These 'somethings' include location, light, views, or raw space. This is where the problem is. Finding a property priced right in the perfect location, with good natural sunlight, at least decent views, and enough raw space to meet the buyers' needs. That is where inventory is limited.

Which brings me to today's market report. While the macro economic environment is still very uncertain, it is less uncertain than it was just a few weeks ago. Today, we know that:

a) The Fed is ready to step in when needed; although if stocks continue to rally on the assumption of a rate cut, that rate cut will never happen

b) The banking system seems to be reacting favorably to fed liquidity injections and cut in discount window

c) Major banks, like Bank of America taking a $2B stake in Countrywide Financial, are ready and willing to jump into buying opportunities for struggling smaller lenders

...this is helping to restore investor confidence and therefore stock prices. What is beneath the surface AND the ultimate economic side effects of this credit squeeze are still yet to be known. So we are not out of the woods yet. So what does this mean to NYC real estate that we know is so directly tied to wall street and wall street related jobs and bonuses?

It means that as long as NO MAJOR STOCK SELLOFF OR ECONOMIC RECESSION OCCURS, our marketplace fundamentals will NOT be so quick to change. Manhattan market fundamentals in place right now include:

* Tight Inventory - opposite of what is going on in most other local suburban markets
* Strong Jobs - jobs are still plentiful. There is only talk of job losses as a result of an economic slowdown from this credit squeeze; it did not happen yet.
* High Salaries - NY'ers are still making plenty of $$$. Again, there is only talk of a restriction in salaries as a result of any future recession.
* Bonuses - Umm, we are still only 800 points from record highs on the DOW. Who knows where we will end the year but if things pass over better than most expect and stock markets hold up, bonuses will not get hit as much as everyone expects. There goes that doomsday scenario.
* Weak Dollar - foreign buyers still see value in NYC real estate based on currency trends
* Lifestyle - urban lifestyle is still in demand as trend to live closer to workplace grows stronger
* Rental Rates Soaring - any change in this trend will be lagging from economic slowdowns. Soaring rents make buying more attractive options for those that can afford it, and as I mentioned above there are still plenty of buyers out there.

I see this recent headline from the NY Times story on Sunday that states "...Since June 2006, the national inventory of houses has increased by 12%, but Manhattan's apartment inventory has decreased by 32%":

The Manhattan Real Estate Slump That Wasn't (NY Times) -

Even the condo glut that so many real estate executives feared has turned out instead to be a boon of sorts. "If we didn’t have new development coming on at the pace we did, we'd have a chronic shortage across all sectors, and we’d see 20 percent price growth," said Mr. Miller, the appraiser.

To the extent Manhattan's housing market is threatened by a weak national economy and by declining bonuses, said Mr. Miller of Miller Samuel, "then the fact that we have a lower level of supply coming on would help keep the market from correcting."

UrbanDigs Says - As long as inventory remains tight, I just don't see how prices can come down as aggressively as some people think. That is not to say I expect 10% appreciation per year for the next two years! I don't. Rather, I see a sideways market for the near term. Corrections are perfectly normal for longer term sustainable growth, I've said this a number of times, so for now its important to continue to monitor the macro economic environment to see how that ultimately effects jobs, salaries, bonuses, affordability, rental rates, and ultimately inventory here at home!

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New & Notable: Still Need More Inventory

A: New York City real estate still needs more inventory to meet demand. While I am still assessing whether the current credit concerns are infecting us here (nothing yet other than some psychological concern), the more important trends to watch are inventory and price points. Both are very healthy and with rental vacancy rates at 0.81% last month and no signs of any significant slowdown in buyer demand, we need more product to come to market if any price relief is to come to fruition. For now, here are some new and notable listings I am seeing.

136 Waverly Place; Apt: 4C

First Came on Market: 8/06/2007
Asking Price: $995,000
Maintenance: $909 (nice and low at just over $1/sft)
Size: 900 SFT
PPSF: $1,105
Marketed By: Jennifer Roberts of Bellmarc Realty

175 West 13th Street; Apt: 12H

First Came on Market: 8/08/2007
Asking Price: $425,000
Maintenance: $701
Size: N/A
PPSF: N/A
Marketed By: Gene Staquet of Corcoran

And finally, the listing that anyone can afford...drumroll please.......Just under 10,000 SFT of space to do whatever you want. Attention rich people with play money!

As per the website, in addition to residence use..."Permitted uses also include community facility and not-for-profit organizations"

147 West 15th Street; Apt: MAIS

First Came on Market: 2/06/2007 - Back On Market --> 8/08/2007
Asking Price: $5,500,000
Maintenance: $4,858 (Just Above $0.50/sft!!!)
Size: 9,550 SFT --> attn: visionaries with lots of money
PPSF: $578
Marketed By: Anita Grossberg & Team of Corcoran

**As always with these New & Notables, I will NEVER accompany you to these listings or represent you to bid on any of these properties. Please contact the exclusive broker if you are interested in viewing or bidding on any of the listings noted above.

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Weekly Inventory Check: 243 New Listings

A: A week ago I posted on NEW LISTINGS to hit the Manhattan housing market in each month so far this year. If you missed it, check out the inventory check here. I was surprised to see a consecutive increase in new listings in each of the months of 2007; as opposed to a decline of new listings that would help explain today's very tight sales market. At the time I did a check on July after only the first holiday week of the month and it came out to only 108 new listings. So, I just wanted to do a quick checkup on how the month has fared since, after the holiday slowdown passed. What I found is that in the past 7 days (July 7 - July 13) there has so far been 243 NEW listings to come to market.

Neighborhoods included: Beekman, Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village

Of the 243 NEW Listings, only a few are new development listings which include units released for:

50 Orchard - 12 New Listings
100 RSB (Avery) - 5 New Listings
650 6th Ave - 3 New Listings
2628 Broadway (Ariel East) - 5 New Listings
2112 Broadway (Apple Bank Condo) - 2 New Listings

So only 27 of 243 new listings are from new developments. I think that is fairly healthy for the market with approximately 216 new existing units hitting the marketplace in the past 7 days (aprox 31 new existing units/per day). If we continue this trend we would see approximately 591 new existing units hitting the marketplace by the end of July! It would be a nice recovery after the very slow first holiday week of the month! Lets see how it pans out. Personally, Im still not seeing any difference for my clients!

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Clearing Up The Inventory Picture

A: Following up on yesterday's post regarding the # of new listings to hit the Manhattan marketplace each month of this year, I just wanted to provide you with some data as reported by superstar appraiser Jonathan Miller 4 days ago. Given the surprise in what I discovered yesterday, it should help better explain the current NYC real estate marketplace.

All of this is from the article in CNN Money published July 3rd.

And some notable quotes from the article:

I am posting this article today because too many readers didnt understand the inventory data I reported on yesterday, assuming that I was showing TOTAL inventory trends for Manhattan. Those numbers are way too low to be total inventory. Rather, yesterday's post was on the # of new listings to actually come to market for each month of 2007. I was curious to see the trends expecting to see a dropoff in new listings for the past few months. But that didn't happen.

It seems sellers are hearing the call to sell in the generally slower summer months as this time around there is very little competition and still healthy buyer demand. However, there still is not enough product to meet demand giving prospective buyers a hard time. More to come on inventory trends as this story continues to write itself.

In the meantime: WE NEED MORE PRODUCTS TO SELL TO MEET DEMAND!!

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Inventory Trend Check: July Slowdown

A: I decided to do some research in inventory trends, and specifically new listings (condo, co-ops & condops) to hit the market in the most popular neighborhoods of Manhattan for every month of 2007. I was curious to see how inventory has changed since the frenzy months of JAN - APRIL and today. Now you must keep in mind that this chart ONLY shows you the # of new listings to hit the market for each month of this year and NOT the total number of active listings on the market. Unfortunately my internal systems are not accurate in producing this data leaving me left to report on what data I have access to that I deem reliable. Of course, there is no way for me to check every single piece of data to verify its reliability, but I did do spot checks on each month to make sure listings fit into the criteria I set; and I found it was fine!

Neighborhoods included: Beekman, Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village

Conclusions: Hmm, very interesting and NOT what I would expect. With inventory so tight right now, I would expect to have seen a decrease in new listings hitting the market in the months of May, June and July; which led to the tight inventory environment we see today. Instead, I see a consistent increase in new listings hitting the market with a peak in June. It appears there will be a HUGE dropoff come the end of July as only 108 new listings have hit the market so far this month. Part of that is obviously due to July 4th holiday but come the end of the month I expect total number of new listings to be significantly lower than the 1,190 registered last month!

Inventory right now seems very tight to me. I am having trouble finding good products for all my buyers, who range in budget from $500,000 to about $2.4M. This is something I am used to working in Manhattan real estate, but this environment seems especially tough. Good products that are priced right are selling fast while high priced products don't seem to be cutting their prices as quickly as one would hope. The reason probably is that with such tight inventory, even overpriced listings are getting good traffic; and with good traffic comes stingy sellers unwilling to aggressively lower their price.

I wish I could find out the actual number of contracts signed per month for this year so we can see how that trend compares to the # of new listings that hit the market. It would also be very helpful to have an idea of TOTAL ACTIVE inventory for each month of this year to see if there is in fact a dropoff in the months of May & June. One thing I can tell you, is that the frenzy months of JAN - APRIL did produce great sales volume that removed alot of inventory from the open market; one contributor to today's tight inventory problem.

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Inventory Trend Check - It's Rising

A: After seeing what I saw on Long Island yesterday, I was curious to see the inventory trends of Manhattan real estate on a weekly basis for the past 4-5 weeks or so. I wanted to see if there was a trend. I added Beekman (not sure why I left out Beekman in previous reports) to this inventory check. I also excluded NEW LEADS and only counted the number of NEW LISTINGS that came to market for the specified time period; the first time I did this and something I should have been doing in the past. It's the best data I have access to, so take it for what its worth. Conclusions? New listings inventory trend is rising

Neighborhoods included: Beekman, Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village

I checked the data twice to be sure it was correct before entering it into the chart software. While it may not seem like inventory is rising to all you frustrated buyers out there, according to the central brokerage system that I use since Corcoran bought out Citi-Habitats, the inventory trend line is clearly on the upside.

For the week of May 6th - May 13th (yes I know its 8 days, but this is how I did it and at least all sets are consistent), the search hit the MAX # of 300 results so I really don't know how many more new listings there may have been. I also subtracted NEW LEADS, since that is all they are, leads and not listings on the market yet, to get a more accurate view of how many new listings actually hit the New York City real estate market during the specified date ranges.

Draw your own conclusions but what I see is rising inventory hitting the NYC real estate marketplace since April 13th. While prices are still high and demand is still strong, the effect of this rising inventory is yet to be seen. Will the demand absorb the rising supply? Will Jonathan Miller show this same trend in future data reports? I'll certainly be keeping tabs on it. The hope is to give you the inside take on what is really happening in Manhattan real estate so that you can best invest in it.

PS - Sorry, no live chat today as I have to head to LI for a family visit to the oncologist.

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New Listings Week of 5/1 - 5/8 = 282

A: New Listings inventory for the first week of May totaled 282, a slight rise from the last report I did on the subject. Not too many good deals out there but here are some notable new listings that may be worth a visit if they fit into your criteria and price point.

Neighborhoods included: Carnegie Hill, Central Park South, Chelsea, Clinton, E. Village, Fin District, Flatiron District, Gramercy, G Village, Little Italy/Chinatown, LES, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, UES, UWS, W. Village

61 West 62nd Street; Apt: 5F

First Came on Market: 5/02/2007
Asking Price: $650,000
maintenance: $1,448 (high, keeps price lower)
Size: 750 SFT
PPSF: $867
Marketed By: Jessica Cohen & Robin Greenbaum of Douglas Elliman

340 East 74th Street; Apt 4C

First Came on Market: 5/07/2007
Asking Price: $1,200,000
maintenance: $1,469 (low monthly's for size)
Size: 1,250 SFT
PPSF: $960
Marketed By: Stacy Froelich of Corcoran

158 Chambers St; 5th Fl PH - Walkup w/ 700 Sft Roofdeck * Roof Rights

First Came on Market: 5/08/2007
Asking Price: $1,485,000
maintenance: $2,050 (not bad for size + roof deck and rights)
Size: Aprox 1,700 + 700 SFT Roofdeck
PPSF: Aprox $874
Marketed By: James Attard of Tabak of Tribeca

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New Inventory Neighborhood Chart

A: You didn't think I would go out like that did you? Cmon, now. Sorry to disappoint you Barney but I'll wait a bit longer before "...getting out and doing something with my life". This is way more fun. Due to popular demand, well at least for one UD reader who requested this, here is the New Inventory Data in the past 7 days broken down by neighborhood. As before, it is not surprising that UES & UWS show the most new listings hitting the market as the geographic range for these neighborhoods are significantly larger than most other neighborhoods in Manhattan.

For comparison, here is the LAST NEIGHBORHOOD NEW INVENTORY CHART that I did back on January 22nd, 2007.

Here is the data from 03/26/2007 - 04/02/2007 showing new listings coming to market in each of the mentioned neighborhoods.

Not the most useful of posts but one that obviously seemed to be of interest as the last chart got mentioned on Curbed, the mother of all real estate blogs, and resulted in a few readers emailing me to do another new inventory chart based on neighborhood.

Of note is the pickup in Greenwich Village where the past week saw 27 new listings hit the market as opposed to only 10 the last time I did this data check. A nice 270% increase. Both UES & UWS not surprisingly lead the pack again with the most new property's coming to market since late March.

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New Inventory Neighborhood Chart

A: Im sure most will not find this that useful but I was just curious as to how many new units hit the market in the past 7 days per neighborhood. Obviously it would be best if I can find the time to do this weekly so we can monitor any trends, but for now I was just wondering where the most/least supply is coming in.

# NEW LISTINGS PER NEIGHBORHOOD IN PAST 7 DAYS

Again, not the most useful of posts to apply to real estate investing but I just wanted to see how much supply actually hit neighborhoods like the UES & UWS compared to other neighborhoods in the past 7 days. Okay, I feel better now.

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Inventory Check Shows July Slowdown

A: Here is the monthly report showing the # of NEW LISTINGS that have come to market across New York City. In the graph below I compiled data based on certain price groups and compared the # of New Listings that came to market in JULY vs JUNE. Not surprisingly, the number of new listings to market slowed across all major price groups except under $250K! NYC real estate is seasonal with slow open house activity and many new sellers waiting until after labor day to list their apartment for sale.

Neighborhoods Included: Battery Park City, Central Park South, Chelsea, Clinton, E. Harlem, E. Village, Financial District, Flatiron District, Gramercy, Greenwich Village, Harlem, Little Italy/Chinatown, Lower East Side, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, Upper East Side, Upper West Side, W. Village

CONCLUSIONS: Have you noticed less choices if you are looking to buy an apartment in NYC lately? It's not an illusion. The # of new listings in the month of July has decreased significantly across almost all price groups. I would think the slowdown in new listings is consistent with the seasonal market that affects NYC. I've said numerous times that the summer is not the best time to sell as open house activity is generally weak and buyers stay out of the heat and leave NYC during the weekends. That leaves sellers with less action and the likelihood of accepting a lower offer than normal; a good recipe for serious buyers.

Expect much of the same for next month's inventory report and and an uptick in listings inventory as we move past labor day!

CURRENT STATE OF THE NYC HOUSING MARKET: Exactly the same as last month's analysis! Most sellers are still in denial about the housing cooldown and price their property's at last years levels with the hopes 'their home' will get that perfect uneducated yet wealthy buyer. Not so. Time on market is still about 2-5 months or so as most seller's these days will lower their asking price at some point during the sales process. Buyers are very savvy and patient resulting in no bidding wars that I am aware of, and sellers should realize this dynamic sooner rather than later when discussing the future of their marketing strategy with their hired representative broker.

My advice to sellers: Give yourself time to sell your apartment in today's market. Should you HAVE TO sell right away, be sure to aggressively price your apartment otherwise it just won't sell as fast as you hope.

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NYC Inventory Check: May vs June

A: Here is the monthly report showing the # of NEW LISTINGS that have come to market across New York City. In the graph below I compiled data based on certain price groups and compared the # of New Listings that came to market in MAY vs JUNE.

Neighborhoods Included: Battery Park City, Central Park South, Chelsea, Clinton, E. Harlem, E. Village, Financial District, Flatiron District, Gramercy, Greenwich Village, Harlem, Little Italy/Chinatown, Lower East Side, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, Upper East Side, Upper West Side, W. Village

CONCLUSIONS: The month of June experienced a general slowdown in new listings inventory coming to market, especially in the $501K-$750K price group, which experienced aproximately a 21% decline in new listings in June when compared to May. The $1.001M-$1.5M price group also showed a statistical decline in new listings with aproximately 19% decline. Since I am so new to these inventory charts, and only have been doing them for 3 months now, I would think the slowdown in new listings is consistent with the seasonal market that affects NYC.

Generally speaking, there is less inventory on the market during the hot summer months of JUNE-JULY-AUGUST as most people leave the city during this time, especially on weekends. Sellers experience a slowdown in activity at OH's and usually are 'looser' in their reactions to low-ball offers; a good sign for serious buyers who know they intend to buy during the summer! I would expect more of the same when calculating the inventory report for next month.

CURRENT STATE OF THE NYC HOUSING MARKET: Very similar to last month's analysis! Most sellers are still in denial about the housing cooldown and price their property's at last years levels with the hopes 'their home' will get that perfect uneducated yet wealthy buyer. Not so. Time on market is still about 2-5 months or so as most seller's these days will lower their asking price at some point during the sales process. Buyers are very savvy and patient resulting in no bidding wars that I am aware of, and sellers should realize this dynamic sooner rather than later when discussing the future of their marketing strategy with their hired representative broker.

My advice to sellers: Give yourself time to sell your apartment in today's market. Should you HAVE TO sell right away, be sure to aggressively price your apartment otherwise it just won't sell as fast as you hope.

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NYC May 2006 Vacancy Report

A: Here are some stats that you might find useful on the NYC rental market for the month of May! Vacancy rates are broken down by neighborhood.

CONCLUSIONS: Murray Hill & Midtown West are leading the pack with the lowest vacancy rate while Chelsea moved into the top spot with the most apartments available. NYC vacancy rates are still VERY LOW and renters are forced to settle for much less than they hoped while paying much more than they want! All in all, if this trend continues expect more renters to consider buying (or at least prepare financially to buy) as the NYC housing market continues to cool and deals are sure to be found!

I'll publish this monthly so you can keep tabs on the New York City rental market by neighborhood.

Older vacancy reports can be found at the Citi-Habitats Market Reports webpage along with their bi-annual Black & White report.

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NYC Inventory Check: APRIL vs MAY

A: Here is the monthly report showing the # of NEW LISTINGS that have come to market across New York City. In the graph below I compiled data based on certain price groups and compared the # New Listings that came to market in APRIL vs MAY.

Neighborhoods Included: Battery Park City, Central Park South, Chelsea, Clinton, E. Harlem, E. Village, Financial District, Flatiron District, Gramercy, Greenwich Village, Harlem, Little Italy/Chinatown, Lower East Side, Midtown, Murray Hill, SoHo, Sutton Area, Tribeca, Upper East Side, Upper West Side, W. Village

CONCLUSIONS: Well on first glance I can't help but notice the surge in new listings in the $501K-$750K price group in May versus April; which is about a 51% increase month to month. In fact, every price group under $1M has experienced an increase in new listings with the excpetion of the little guys under $250K which stayed the same! The higher end listings data is erratic with a jump in the $3.001M+ price group but a notable decline in the $2.001M-$2.5M price group.

I'm still a bit new at this graph stuff and anaylzing the data so if anyone has recommendations on how I can get a better dataset or if I should be anaylzing a completely different topic, please post a comment and let me know.

Overall, new inventory that came to the market in MAY exceeded that of the month prior telling me that buyers have more to choose from and sellers have more competition. The data shouldn't be a surprise but seems useful to me when breaking it down per price group!

CURRENT STATE OF NYC MARKET: Much of the same as I've been discussing lately on UrbanDigs. Buyers still have great control although they usually have to wait 1-2 months for a new listing to come down in price if not priced aggressively from the start. Time on market is still high for sellers forcing desperate homeowners to lower their price aggressively should they need to sell now! Buyers should keep their eyes open for these deals as they are popping up here and there! Lending rates are still trickling higher putting a bit of time pressure on buyers to lock in a rate sooner rather than later.

Rental prices continue to rise and inventory remains super tight (around 0.65%) making buying a desired choice for those that are able to afford the initial closing costs (read post on "The Starter/Investment Property"). Condo/Co-op prices are still relatively high for new listings coming to market, but most apartments experience at least 1 price reduction before finding a buyer in this market; some apt's experience a 20% drop in asking price to spur buyer activity! Can you find the deals? Good Luck!

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Updated Inventory Check - New Listings

A: Thanks to Joe from the Curbed comments thread for suggesting a cleanup of the graph along with a longer dataset and smaller price groups. Here are two 30-day charts showing the # of NEW LISTINGS tha