Discussing Manhattan real estate trends is a two-tiered science: there is what is happening right now in the field, let’s call that real-time, and then there is the sales data telling us of price trends, which is lagging by about 4-6 months. Sometimes the two things tell you completely different things, so its important that the professional agents out there educate their clients on this dynamic. Right now happens to be one of those times where the real-time data is starting to show a pickup in activity as the upcoming sales reports are likely to show a cooling down – especially in the Condo sector! Let’s discuss.
First, lets take a peek at MONTHLY CONTRACT ACTIVITY – 3 YEARS that will show just how sluggish 2016 really was and how 2017 is starting off in better shape:
Here is a running tally of the past 3 years activity for Jan/Feb combined for comparisons:
2015 – 1,817 Contracts Signed in Jan/Feb
2016 – 1,438 Contracts Signed in Jan/Feb (a 20.9% decrease)
2017 – 1,696 Contracts Signed in Jan/Feb (a 17.9% increase)
It’s easy to see how bad 2016’s active season started out when you look at it this way. The market is always about the buyers and their bids making Contract Activity one of the purest measures we have to following the pace of real-time demand. Buyer’s should know that 2017 is starting out noticeably more active than last year.
Lets check in on Supply Trends, same chart type showing MONTHLY NEW SUPPLY – 3 YEARS:
Here is a running tally of the past 3 years new supply for Jan/Feb combined for comparisons:
2015 – 2,407 New Listings in Jan/Feb
2016 – 2,522 New Listings in Jan/Feb (a 4.8% increase)
2017 – 2,494 Contracts Signed in Jan/Feb (a 1.1% decrease)
So, conclusions. When looking at Feb realtime activity of new supply & new contract activity, we see inventory trends cooling off while demand rebounds. If 2016 was the year the softness hit, 2017 will be the year the quarterly reports finally show it – and chances are high the weakness will first hit the Condo sector.
I try to paint a timeline of Manhattan Price Trends for the classes and discussions we have with UD users. It looks something like this:
Late 2014 –> High End starts to peak out and show weakness
Early 2015 –> High End gets hit, Softness starts to spread to lower price sectors
Mid 2015 –> The $5M and up market in Manhattan has officially peaked and in contraction.
Late 2015 –> The $2M – $5M sector starts to get affected. The $2M and under sector does too, but barely.
Early 2016 –> The trough for all price sectors. Biggest weakness exists around Feb/March. Weak Active Season
Mid 2016 –> Attempt at a rebound, but its sluggish
Early 2017 –> Signs that a rebound may be happening
There are plenty of older discussions here on this blog about this as it was happening, but for those with little time…that pretty much sums up what happened! Read my “Manhattan’s 2016 Narrative” post for details on how much softness each price sector experienced.
WHAT TO LOOK FOR –> We expect future quarterly market reports (which are mostly sales based) to show year over year weakness. We expect the Condo markets to show most of the softness versus the more stable Co-op market. It is very possible that the Sales Reports when released show “Todays market X% weaker than 1yr ago” while the real-time data shows “Today’s market x% more active than 1yr ago” – that’s the point of this discussion. On April 1st, the major firms will release their Q1 reports so lets take a peek then and re-discuss.