WSJ.com: Sales Down - But Market Ticking Up?

Posted by urbandigs

Fri Oct 29th, 2010 10:25 AM

A: Josh Barbanel reports on Manhattan real estate today, showing a 16.5% dropoff in Co-op and Condo sales from one month earlier. Given the lag between Contract Signing and ACRIS public record capturing the sale, today's sales paces is really reflecting the state of our market from say 3-6 months ago. When we take a peak at Pending Sales, its clear WHY we are seeing this dropoff in sales pace right now and will continue to see it for a few more months. Lets discuss.

WSJ.com reports, "Co-op, Condo Sales Drop Off":

The sales volume of Manhattan co-ops and condos fell sharply in October, and analysts said it was likely to remain subdued through the end of the year.

The pace of closed October sales reported to City Hall as of Wednesday was down 16.5% versus September and about half the pace of sales during a comparable period in June, when sales were booming.October sales are running at the lowest level in 15 months, with the biggest decline coming in lower-priced apartments.

A decline in sales was expected this month because contract signings were dismal during the summer. The volume of contracts signed in October was running about 25% higher than the sluggish levels in September, according to Noah Rosenblatt, a broker and founder of UrbanDigs.com, a new website that analyzes market trends. Pamela Liebman, president of the Corcoran Group, said the downturn in closings is due to the return of "normal seasonality" in the market. "In terms of contracts we are seeing a positive uptick," she said. "Brokers are very busy."
So, you can look at the market in two ways:

RECORDED SALES --> A rear-view window of our market that becomes a 'verify' point for sales data. In the end, its all about actual sales, sale prices, and sales volume. Sales trends arguably reflects the state of our market at a 3-6 month lag. Read my, "Understanding The Lag w/ Quarterly Reports" for a detailed explanation of why recorded sales lag.

PENDING SALES --> A more real-time view of Manhattan market demand. In the end, it is subject to big time data flaws (that we believed we adapted our systems to and solved), broken contracts and buyers unable to secure financing. However, if that stays somewhat constant, you still should get a better real-time picture of current market conditions and trends

Now, this chart is available to subscribers and shows you how PENDING SALES compares to SALES (90-day MA for daily closings) trends; showing you the general lag:

pending-vs-acris-sales.jpg

Personally, my focus is constantly on the real time stuff and where Manhattan real estate is NOW! Where did we come from 1 month ago, 3 months ago, a year ago, etc.. For me, I can properly guide my clients by keeping them ahead of the curve when reporting on the changing pace of demand for Manhattan inventory. This is why I built all these tools to track the Manhattan marketplace.

The uptick in demand is about 4 weeks in right now, so we still have a poor pipeline of deals from the sluggish summer that will mute future sales volume for November and into December. I would expect a weak Q4 report when it is released January 2nd, 2011.


FORUM: Pending Sales Q3'10 to Q4'10

Posted by urbandigs

Thu Oct 28th, 2010 09:21 AM

A: Everyone can view these discussions in the TALK section! Today's topic discusses how the Free Pending Sales metric is starting to reflect the TICK UP in activity reflected in the Real Time Listing Updates tool available to subscribers. Users can also notice these changes by watching the Free Market Trends table on the top left daily.

pending-1qtr-new.jpg

Pending Sales is starting to reflect the real time pickup in new contracts signed by the Real-Time Listing Updates tool on the left; available to subscribers. That real time listings update tool is your market ticker on Manhattan real estate. That is where you will see market demand both heat up and cool down in real time.

There is a minor bug in the adjustment time that will be fixed soon, so for a week or so the 7-day and 30-day columns may adjust a few times a day as new gains are registered in the TODAY column - the TODAY column updates about 6x a day as brokers enter in their listing status changes. At the end of the month, another algorithm will kick in and cleanse the monthly changes before publishing the results to the Broker YoY tab in the main charts section; also part of our subscription features.

The 7-day and 30-day columns were designed to adjust only once a day, at midnight..but our source db is on a 4 hour shorter clock than normal time, and we have to fix the code a bit to force the updates once a day at midnight, so as to be clearer for users to interpret changes. For now, the 7-day and 30-day may update a few times a day before seeing the "midnight adjustment" that loses the tail end day and inputs the new gains from YEST....Please note until its fixed.


Fed Blowing a High Yield Bubble?

Posted by urbandigs

Wed Oct 27th, 2010 10:16 AM

A: Its been a while since I went back to what I truly love, the tradable markets outside Manhattan real estate. After all, it was credit that flashed the warning signs in mid 2007 that something really bad was about to happen. While the exact opposite seems to be going on right now, its a direct result of fed engineering a bank recapitalization environment. The end result, bubble concerns in high yield markets as everyone, everywhere searches for yield.

At some point, this will end badly. Unless of course you are a believer that the fed does not engineer boom and bust asset cycles. Not sure how you can believe this though after seeing a tech boom go bust and then a housing/credit boom go bust in the last 12 years. As I said before: "The only reason credit is flowing in the short end, in libor, in agencies, in everything for that matter is because of the gov't guarantee that nothing will fail. Liquidity started with the fed and was multiplied by the street and global investors."

Now, when you inject such liquidity into an economy you can't direct where that money will end up. The street, as it usually does, jumps on board and places big bets. For the past 18 months or so, it has been a story of yield --> specifically, high yield.

Bloomberg.com reports, "Fed-Induced Rally Makes Riskiest Debt Priciest: Credit Markets":

The lowest-rated junk bonds are the most expensive corporate debt following a Federal Reserve- induced rally in high-risk assets, adding to concern fixed- income securities are overvalued.

"You don't want to stand in the way of the search for yield," said Alberto Gallo, a global credit strategist at Goldman Sachs in New York. "But on the other hand it is a very volatile part of the market. And it can be particularly sensitive to a further slowdown in the economy." Investors are paying ever-higher prices on speculation the money the Fed injects into the economy will allow the neediest borrowers to refinance the more than $815 billion of loans and bonds that Bank of America Merrill Lynch estimates comes due through 2015.

Money managers are piling into the riskiest junk bonds and taking ever-lower yields and spreads because they face a lack of alternatives. Investments on everything from government debt to corporate bonds are paying some of the lowest coupons on record as the Fed holds its target overnight lending rate between banks in a range of zero percent to 0.25 percent since December 2008.
The carry trade/search for yield, whatever you want to call it, works until it doesn't. You can't time these things and its very challenging to step in against it. All I know is when the masses begin their exits, for whatever reason or trigger, watch out! Doubtful the fed can engineer an orderly exit on this one. In the meantime, the fed's goal is to carry trade the banks mis-marked toxic assets to reasonable levels that can be dealt with - and at same time, deal with deflationary forces that is hurting our economy. It's that a US bank can have illiquid assets on it's books at 40 when they are worth 10. They just make $10 a year for 3 or 4 years and write down the investment a little bit more each time around while still able to show a profit. So long as nothing drastic happens eventually they'll have it written down to market.

That is my opinion of today's fed engineered environment, and wall street is pumping its money into high yielding assets to ride it. How much money? Well, take a look at this Bloomberg chart of Money Market Funds Assets since Feb, 2009, courtesy of my old trader buddy Anthony at Momentum Trading Partners:

mmfa.jpg

Looks like $1.1Trln left MMFA in the last 20 months in search for higher yield!!


Lagging Sales Records Mutes Tick Up

Posted by urbandigs

Tue Oct 26th, 2010 09:24 AM

A: In the last quarter, the pace of pending sales is down 17.3%. In the last 2 quarters, the pace of pending sales is down 30.6%. Followers of this market are scrambling to find out why. The fuel for recorded sales is low with the dull pace of newly signed deals in August and September - so we must expect this to lead to a sluggish 4th quarter in terms of sales volume when the report is released January 2nd, 2011.

Its all about real-time baby! What's happening now. How do we interpret whats happening now? Well first, we should have some idea of where we came from - and for that, its all relative based on how far back we go. Here are a few snapshots of PENDING SALES from the free stuff in our new charts section.

NOTE: Recorded sales are lagging! So as you view these charts, understand that the decline in pending sales diminishes the 'fuel' that produces recorded sales! So expect coming months to show sluggishness.

PENDING SALES: 1 QUARTER down 17.3%

pending2.jpg

Basically describes the steady sluggishness most brokers experienced this summer - lets go back another 3 months...

PENDING SALES: 2 QUARTERS down 30.6%

pending1.jpg

Looks rough, doesnt it? Thats because you are now comparing today's low levels to the peak of activity for 2010 which occurred in May - subscribers can see this clearly in the Broker YoY Monthly bar charts. Finally, lets check out Year-to-Date so we can see the surge in activity before the summer...

PENDING SALES: YEAR-TO-DATE down 20.1%

pending3.jpg

Starting to paint a picture?? The Manhattan market saw a solid surge in newly signed deals which sustained itself a bit until the end of June - with the peak of activity around early May. Since these are captured when the broker changes a listing from ACTIVE to CSGN, and it takes 1-3 weeks to go from accepted offer to contract signed, I will put the peak of action in April. Once we hit July, this market just took a break and buyers took a step back from signing new deals; at least relative to the action leading up to April.

So what we have here is enhanced seasonality! We had a very strong early 2010 (April being the peak) and a very weak summer of 2010 (September being the trough) - in terms of pace of newly signed contracts/demand. However, I have seen a tick UP in the past 4 weeks. How do I know this? By watching the Real Time Listing Updates ticker available to subscribers.

REAL TIME LISTING UPDATES Ticker --> this updates up to 6x a day as brokers change their exclusive listings from one status to another. The intelligence behind the tool properly cleanses the garbage out, and only shows you the notable status changes for the day. By watching this ticker daily, over time, you get a natural 'feel' for the market as it heats up or cools down. And over the last month, there is clearly a tick up in the pace of demand - granted, it is from depressed September levels.

So, expect a month-to-month move up total contracts signed once October is in the books next week.


FORUM: A Thought on Active Inventory

Posted by urbandigs

Sat Oct 23rd, 2010 11:13 PM

Please visit the TALK forum to view the chart and discussion..."A Thought on Active Inventory for Q1-2008".

inventory-thought1.jpg



Manhattan Ticking UP In Last Month

Posted by urbandigs

Fri Oct 22nd, 2010 10:00 PM

A: By the way, non-subscribers can access some FREE charts by clicking on the CHARTS tab in the main nav bar. We will always allow every user to browse Active Inventory, Pending Sales, and Off-Market Inventory trends for Manhattan real estate. Subscribers would have noticed a tick UP in activity by following our Real-Time Listing Updates box - the trader in me had to have this one!! By following this, I would expect pending sales to tick up in coming weeks. Let me explain.

When it comes to different charting tools, you can engineer the sensitivity so that the table/chart focuses on a short-term window, or a longer-term one. Both have different uses. In general, the more data you use the better quality the chart; so a bigger picture view of the market is always better to have!! But the real time ticker tools are damn fun to follow!! And this is where you see the mth-to-mth tick ups and downs.

While the left side ticker updates daily and has a 30-day viewpoint of our market, our pending sales metric is governed with a 180-day one - here are the two main rules:

1) Counts all listings changed to CONTRACT SIGNED state within the last 180 days
2) Counts only CSGN listings updated by the broker at least once in the last 90 days


This is in addition to general db governance by our flow algorithm (i.e., nothing will be counted as pending, or 'in contract', if it went to CSGN from a previous OFF-MKT state - a listing can only be counted as pending, if it came from a previous ACTIVE state). Pending sales must satisfy both of the above noted criteria to be counted (methodology will be published in a few weeks). We designed it this way so that the metric looks at both broader market movements and is sensitive to real time market shifts by not being diluted with stale 'in contract' listings that won't close anytime soon (think new developments in pre-marketing). Most deals, excluding pre-marketed new devs, close in 3-4 months of the contract being signed. What you need to know is that Pending Sales in all our charts is basically a 6-month moving window of demand!

Look at this chart:

pending-sales-tip.jpg

Now, while pending sales captures new CONTRACTS SIGNED today and everyday moving forward, it always loses data - both on the tail end and those failing to satisfy the rules. Right now, the 'Tail End' is seeing the final surge in demand that we saw back in April and early May. Since then, it was a steady decline.

This is why pending sales has not yet reflected the tick UP I am discussing from following the Real-Time Listing Updates tool! Two tools: one that is real time but loses integrity due to its short term nature, one that is longer term and better explains broader market changes. In 10 days we will get the monthly Broker YoY update for October, it should show this uptick pretty clearly from September.


User Feedback: Submarket Bathroom Inputs

Posted by urbandigs

Thu Oct 21st, 2010 11:52 PM

A: We are hoping for feedback on how you guys would like to break down a submarket when it comes to the unit size. You see, in the full database we found bedrooms to be unreliable and rooms to be incomplete - two things that sacrifice data quality when it comes to charts. Yet we found bathrooms to be the most complete + accurate datafield associated with each listing. Think about it, how often do brokers inflate the total bathrooms in the apartment? They dont. So, for our submarket chart tools, how would you like to see the bathroom inputs?? We purposely didnt finish this part to hear more opinions on it. Here are my ideas, so please speak out if you have thoughts on this!!

I started a TALK discussion titled: "USER FEEDBACK: Bathroom Input Dropdown Options", a few days ago with this suggestion for Bathroom Submarket Choices. And always keep in mind, these tools are for what we think of as submarkets, and not necessarily neighborhoods! The more data we get together, the more credible the tools and the more representative the charts of the changing trends! So try to think how you would define a specific submarket, knowing you can't get too granular with it because you won't have enough data to make worthwhile charts to analyze.

-Show All
-1
-1.5
-1 to 2
-2
-2 to 3
-2+
-3+
-4+


For non-subscribers, here is a screenshot of the submarket search fields, showing the bathroom options as it is now - unfinished:

bathroom-options.jpg

Your thoughts???


Watch The Listing Updates Tool!

Posted by urbandigs

Wed Oct 20th, 2010 10:59 PM

A: We designed the left side Real Time Listing Updates tool to be your 30-day moving window of this market! It is basically a ticker for Manhattan real estate listing status changes; updating up to 6x a day. It will show you how many contracts signed, newly active, and newly off market occurred daily. But more importantly is the "MON" column, whose label we will change to "30-DAY" - this is a 30-day moving counter of these market updates, that over time will give you a natural 'feel' for the market.

Since we are only up for 1 day now, I forget that you guys don't have a frame of reference for the 30-DAY Listings Update tool on the left side. So let me explain.

Subscribers can see that over the past 30 days, the MON column, there were 642 contracts signed. But what does that mean? Where was this a month ago? 3 months ago? 6 months ago? I'll tell you so you have an idea:

TODAY --> 642
MON AGO --> 575, or so
3 MON AGO --> 750, or so
6 MON AGO --> 1,150, or so

For non-subscribers, let me show you a image of the Listings Updates update box I published 3 weeks ago compared to a screenshot taken today:

real-time-broker-stat-updates.jpg

So, for me who has been following this site this whole time, I know that today's 642 level is a tick up of about 70 or so over the past month, and up 41 or so from 3 weeks ago. Its as real time as we can get. Subscribers should get in the habit of peaking at the 30-DAY, 'MON', column in the Listings Updates box at least once a day, so that over time you will get a natural sense of whether this market is heating up or slowing down; relative to where we just came from! Subscribers can also click on the 'contract signed' link and get a past history of these trends in monthly bar chart form - so you can compare each month to the same period one and two years earlier.

**sorry, uploaded wrong TODAY image file. Yes, exhausted from past few days. The proper images are now in this post that accurately reflect today's counter.


Interpreting The Charts

Posted by urbandigs

Wed Oct 20th, 2010 03:04 PM

A: Now that the new site is live, what do we do with it? I can see already that most people went right to the NEIGHBORHOOD SALES tab of our new chart system to see the median sales trends. This is a logical first reaction to a system like this, hoping to find out where things are selling. But I find the sales charts to be less interesting than the real time 'movement of inventory' charts we built; that is, the active, the pending and the off market inventory trends. Those are the three main trends that I think is most interesting and where users will ultimately see the most value in. Lets discuss how to interpret these guys.

Not that it was good for Lehman brothers to fail and this market to adjust to credit dislocation, but for sake of checking a platform like this for accuracy, an event like that is the perfect way to 'verify' we got it right. When you see what Active, Pending, and Off Market inventory did right before Lehman, right after Lehman, and during the reflation, you start to notice certain market behaviors that make a lot of sense.

For example, I find that sellers are more in tune with market conditions than most give them credit for. To me its clear:

1. Sellers, for the most part, REMOVE their listings when the market reacts to an event
2. Sellers, for the most part, KEEP their listings active when demand is strong until they get their #
3. Sellers, for the most part, REMOVE their listings for seasonal reasons, and ACTIVATE their listings when brokers advise them of typical uptick months

Makes sense right? With the exception of sellers out there that must move property for either liquidity reasons or to meet some kind of personal deadline, sellers see a) traffic levels and b) what bids their property is getting or not getting. They see a heck of a lot more information on their unique property than any one buyer will find out. That information allows them to make informed decisions on whether or not to keep their listing active, and whether or not get aggressive over an offer received. They see what comes in, while the buyer is left to figure out for themselves whether or not the 'great interest' that the seller broker always dishes out, is for real or not. Its a constant guessing game for buyers, as there really is no way for them to know what other offers really came in at or if there really are serious offers currently in negotiations.

So it pays to see what the sellers are doing with their listing. Then you get to Active Inventory & Pending Sales --> pure supply / demand. We must ask ourselves, is demand falling due to seasonality? Is active inventory falling due to rising demand or rising off market trends? We are left to decide if rising or falling X is a function of rising or falling Y!

So here are a few tips in interpreting the new tools at your disposal here on UrbanDigs.com:

1. SEASONALITY --> Never forget seasonality! This market tends to be very active in the months of FEB - MAY, and much slower in the months JUN-SEPT. If you see sharp movements during these times, seasonality is in play. If there is an event, or shock, expect this seasonality to be pushed back (like in 2009)

2. ACTIVE vs PENDING --> these two should be somewhat correlated. When they move together, one may mute out the other. For example, if Pending Sales rises 20% in two months and Active Inventory rises 40% in the same period, then supply is outpacing demand! If you focus only on one, it may not paint the whole picture. Look at these two trends together and you will start to notice that it is those times when they are negatively correlated that a temporary market shift may be occurring; i.e, if Pending sales rises 20% and Active inventory falls 20%, the market is signaling strength. If Pending sales falls 20% and Active Inventory rises 20%, the market is signaling weakness.

3. ACTIVE vs OFF MARKET --> these two should be somewhat negatively correlated. Listings are constantly being activated, removed, and placed back on market. Its interesting to see because it explains to us whether inventory is brand new, or simply re-activated from a prior off market state (and likely not new to target buyers of that submarket). At all times, there is a seller 'pool' in Manhattan that is constantly changing as the market changes - shrinking when demand is high, swelling when demand is low. It is in those times when this seller pool expands big time, that we may be seeing a market shift as more and more sellers seriously considering getting out. Let me be more clear, after Lehman failed in Sept 2008, three things occurred:

a) Off-Market inventory surged as sellers rushed to get their listings off market due to uncertainty and fear
b) Active inventory surged as well
c) Pending Sales plummeted

Ask yourself, how can Active inventory surge if tons of sellers remove their listings from the market? Aha! It is because the seller 'pool' in Manhattan just expanded big time due to a market shift - and we saw tons of sellers put their property on the market, that otherwise may not have considered selling. There were many macro and personal reasons for this. But the most important thing for you guys to know is that it can happen and we need to be able to spot it if it does again.

I will simplify how I interpret market trends/shifts as time goes on, and will start to publish charts in these posts as examples. For now, I am still fixing all bugs and adding more features to this new system! Give us a week or so.


The NEW UrbanDigs.com Launches!!

Posted by urbandigs

Tue Oct 19th, 2010 10:40 AM

A: Every major REBNY brokerage firm provides an array of reports tracking the Manhattan real estate market: here is Douglas Ellimans, here is Corcorans, here is Halsteads, and here is Warburgs. Today, we are excited to announce that UrbanDigs.com launches its suite of Real-time Manhattan market reports. We will provide Active Inventory, Pending Sales, and Off-Market Manhattan trends for free. The tracking platform was designed with the idea that the Manhattan market is both highly segmented and fast moving; with as many listings going stale as there are being freshly added and updated. Our tools will allow you to follow Active, Pending, Off-Market and ACRIS Sales trends for the market as a whole as well as targeted submarkets of interest. Basically, we track and measure the movement of Manhattan inventory as listings are changed from one state to another. After more than 6 years in this industry, I learned the ins and outs of how our inventory is treated and maintained. This experience came in handy when setting our methodology so that obsolete data will not dilute the sensitivity of our charts to real time market shifts. It is our hope to become the trusted place to visit when trying to get a pulse on the fast changing Manhattan markets. The interpretation of the trends we leave to you!!

This day represents 4 years of envisioning, 2 years of planning, and 14 months of intense data mining and development. Please give these new tools time to grow on you and us time to smooth out bugs from launch and add a few more charts/tools that are still in development. Change is never easy after you get used to how a site works. So please consider this a soft launch, and not our final product!! We have tons of ideas and this site will grow and evolve into an ultimate Manhattan real estate tracking tool!

Click Here to Subscribe ($20/mth) or Register (free) Now


**You must create a free account to subscribe. After creating an account, subscribers will be re-directed to PayPal to enter subscription information. Commenting on UrbanDigs.com now requires a free registration. Please take a minute to register and hopefully subscribe for full access to all these data tools we created!!

Going into development, we knew what we wanted to accomplish - a system that accurately can track market shifts in real time. A platform that adapts to all the flaws of the constantly changing data and doesn't expose itself to the poisons (bad data) that would make charts less accurate. Data quality was mission #1! After that, the mission was to build charts that will show us what the markets are doing in a user friendly way. Why wait for a lagging quarterly report? If something is happening now then buyers, sellers and brokers want to know about it!

The innovation that is this site lies in the algorithms we designed to ensure the highest quality tracking mechanism for a very fast paced real estate market like Manhattan. The governance of our entire db is based on the concept that there are only 4 possible Listing States that a unit of inventory can occupy at any one given point in time: ACTIVE, PENDING (in contract), OFF MARKET, and SOLD & CLOSED.

Try to think of the Manhattan market as 4 towers of possible inventory, that are constantly moving up and down as property comes on to market, switches to off market, goes into contract, and then ultimately closes:

4-states.jpg

Our new tools will allow you to track the movement of inventory not only for Manhattan as a whole, but for the submarket and price point of your choice. By eliminating the potential for any one listing to occupy more than 1 listing state at any give point in time, we ensure that each metric is being measured much more accurately. The end result are trends you can trust and that should ultimately "fit" together to tell a story of the changing marketplace. It is the movement of this inventory from one state to another that IS the Manhattan real estate marketplace.

In addition, our systems were designed with the notion that Manhattan is a highly segmented marketplace; there is no one market. Rather, Manhattan is comprised of multiple sub-markets, price points, and neighborhoods; each of which may behave independently of one another at any given point in time (View Active vs Pending Sales for UES/2BTH/$1-$2m Market). With this new site, you can customize and track the movement of listing inventory trends for any one submarket, price point, or neighborhood.

We also offer searchable ACRIS sales (View ACRIS Sales example) as well as median price trends (View UWS Median Sales since 2004) for the most popular neighborhoods in Manhattan - some zip codes only go back 2-3 years, and so those neighborhoods only go back to 2008; we are actively working to fix that issue and will update this section in time. Subscribers can save charts and reference them later (View Saved Charts example) through your activity center located under the charts. Subscribers can start a chat discussion (View Chat about Chart example) on a customized chart, that other subscribers can view and comment on. Finally, subscribers can print out all charts and blog posts, as well as send either to a friend or client. A must have for brokers that are consistently servicing buyers and sellers across varying price points and neighborhoods. The activity center will conveniently store all your saved and emailed charts for later referencing or resending, and will bookmark all your active discussions so you can always 'check in' on a re-activated discussion thread.

But the most interesting tool, in my opinion, is the 30-day moving window that is the Broker Status Updates (View Real-time Broker Status Updates). Imagine one central terminal that accurately tracks all listings' status changes in one place, while filtering out all the noise and flaws embedded in the broker sharing process. How many contracts were signed today? How many listings were taken off market? How many listings became Active, either new or from a previously off market state? Now you have it. This real time tool updates about 6x a day, shows you the total capture from YESTERDAY, and tallies up the unique totals over the past week and month to ensure there is no double counting. Just watching the MONTH column everyday, over time, will give you a natural sense of changing market conditions. The system shows you accurate supply vs demand trends for Manhattan real estate. Just look back in time at what the system was showing you right before Lehman failed in September, 2008, what it showed as we bottomed in early 2009, and how it showed the re-emergence of demand as 2009 headed into 2010 - now imagine having this information in real time as these adjustments were occurring!

We designed tools with one thing in mind, to keep you ahead of the curve of the fast changing Manhattan real estate marketplace. Now, go Register for FREE or Subscribe for $20/mth, and start charting Manhattan real estate!!


BUG Day!

Posted by urbandigs

Tue Oct 19th, 2010 06:49 AM

We just put new site live..Today is officially, BUG day. If you guys have any issues, and YES there will be issues discovered, lets not panic! Please either email me at noah+at+urbandigs.com or post the problem here in our REPORT A BUG Talk discussion.

I will officially announce the launch either later today or tomorrow.

Thanks


Upper West Side Market Breakdown

Posted by urbandigs

Fri Oct 15th, 2010 07:02 PM

A: Crazy busy, almost done, no time, yet got requests about UWS market that I promised to answer. So, here it is. Sorry, no time for commentary but feel free to discuss.


1 QTR - UWS Active Inventory vs Pending Sales

uws-csgn.jpg


1 QTR - UWS Active Inventory vs Off Market Inventory

uws-active.jpg

My personal feeling is the market lacks urgency, on both sell side and buy side with the exception to quality products priced properly. The negative correlation between Active & Off Market inventory trends is telling - much of the rise is due to re-listings, not new listings. Also, you hear that a lot here; "priced properly". What is "priced properly"? Lower your price and you'll find out. When you get there, there will be no mistaking it.





NYC Taxes: Keep on Rising

Posted by urbandigs

Mon Oct 4th, 2010 01:41 PM

A: Interesting piece from Josh Barbanel over at WSJ.com today on the ever increasing carrying costs for NYC property; this time the focus is on the RE tax portion of an owners total carry. NYC gets about 40% of its tax revenue from property taxes, so given our budget issues I don't see how any sizable relief can possibly come in the near future. Manhattan RE bears will always cite 'ever increasing carrying costs' as one of their core arguments as to why prices must come down. Bulls will point to the depth of the Manhattan buyer pool and the wealth that this city attracts to point to why our markets prove to be so resilient. Either way you cut it, to me, sentiment will always be the main driver of demand in this city. Affordability is just one of many variables that affect buyer sentiment; and lets not forget, its all about the buyers who at the end of the day are the ones writing the check!

Via WSJ.com, "Home Slump? Not on Tax Bill":

The latest bills sent out by the city in June were an average of 5.8% higher than a year earlier for most homeowners, 4.8% higher for condo owners and 4.3% higher for co-op owners, That's even though Mayor Michael Bloomberg and City Council decided to keep New York's property-tax rate unchanged for this year.

The reason many homeowners are paying more in city taxes is because rising property values chalked up before the housing crash are still flowing into the city's convoluted property-tax system. Those assessments will be phased in over years to come, driving tax bills higher even without a rise in property values.

The city's property-tax system—the unhappy offspring of a political compromise three decades ago—has long been excoriated by business groups, taxpayers and policy analysts as an incomprehensible and unfair system designed to protect some groups of property owners at the expense of others. The current system does have some benefits. The built-in lag in adjusting home assessments has become a government policymakers dream: It is a counter-cyclical tax that can generate more revenue in bad times, raising collections at a time when other economically sensitive taxes falter.
Here is an interactive map around the 10028 zip code of the Upper East Side:

interactive-tax.jpg

Owners will talk about the tax advantages of their monthly nut as renters talk about not being taxed to live in NYC - don't get me started on the buy vs rent multiples because to me, this market would cease to trade if we use the same theories that apply to other local markets.

Rather, its all built into the dynamic of the markets and the markets are always changing. Sentiment is the key driver and at any point in time buyers may or may not be fine with the total cost of carry of owning. In late 2008 buyers were not fine with the cost of Manhattan property until prices fell to more comfortable levels in early 2009 - at which time they began to progressively step back into the markets with more confidence.

In general, I find buyers to expect annual increases in the cost of carry divided evenly by the rising cost of ongoing maintenance and the rising cost of real estate taxes. Usually my clients pin that expectation about 1-2% above the rate of inflation - so I don't find this micro force to be at the top of the list of main market drivers on sentiment. I'll put local unemployment trends and equity market trends above 'rising RE taxes' when it comes to affecting buyer sentiment in any meaningful way.

What say ye?? Will ever increasing RE taxes and maintenance costs ever cut into buyers' affordability causing another adjustment in prices? Will buyers as a whole cause a market shift until prices compensate for the higher cost of living?


Manhattan Q3: Median UP, Sales Pace DOWN

Posted by urbandigs

Fri Oct 1st, 2010 11:51 AM

A: The Q3-2010 numbers are out and they are right in line with expectations discussed here. What you need to know is that the lagging closed deals from earlier this year show a continued improvement in sales prices (especially in mid-higher price points) but the real time data is telling us that the pace of new deals signed has slowed considerably since last quarter. Very seasonal. Lets discuss.

Via Bloomberg, "Manhattan Apartment Sales Jump 19% as Jobs Stabilize, Mortgage Rates Slide":

Five reports issued today showed increases in closing prices in Manhattan. Brown Harris and its sister firm, Halstead Property LLC, reported a median price of $890,000 for apartments that sold in the quarter, a 14 percent rise over last year.

The Corcoran Group said the median price climbed 9 percent from a year ago. StreetEasy.com, a service that compiles broker listings, put the increase at 14 percent. Sales of luxury apartments, defined as the top 10 percent by price, jumped 19 percent to 266 transactions, Miller Samuel said. Their median price climbed 12.5 percent to $4.39 million.
This was all discussed back in May and last week. So, whats going on now you ask?

According to the NY Times, "Manhattan Real Estate Market Seems to Stabilize, With Prices Up and Sales Volume Down":
Data released by the real estate Web site Streeteasy.com showed that the level of sales activity had already started to slow. Streeteasy counted 1,832 listings that went into contract in the third quarter, a 37 percent drop from the previous quarter and 30 percent lower than the same time last year.
Our real time pending sales metric shows a 29% qtr-qtr decline, which represents the slowdown in the pace of newly signed deals starting in July:

pending-1qtr.jpg

When it comes to enhanced seasonality, you must use caution when over-interpreting it. Real estate is seasonal and we will see some notable monthly and quarterly percentage changes when our busy season is very active and our slow season is very slow. Now that we are past the slowest part of our year, we should keep our eyes focused on if the recent tick up in activity sustains itself, for how long, and to what degree.