Ticker TOP for 1 MONTH Deal Vol?

inonada

Well-known member
I should also say that I acknowledge and agree with your point that if warehousing LLs weren’t warehousing, the prices would be lower. But price is price: it’s the point at which buyers & sellers meet today, not where they would meet given hypotheticals.
 

David Goldsmith

All Powerful Moderator
Staff member
You know I look at the RE industry with a suspicious eye, and I have no doubt there is all sorts of inventory hiding & warehousing happening. But the trends on the Miller data match what I have seen broadly.

1) Peak inventory was January according to Miller and started really coming down in March. I know of at least 1 returnee that came back in March. Think single people who were tired of wandering, living with family, etc. and wanted to get back to social life in NYC.

2) In the broad high end market, I saw individual condos with no incentive to collude, warehouse, etc. all started getting snapped up over the winter accelerating into the spring. I’m talking things like 100-unit buildings with 10 rental listings dropping to 1 or 0, with many buildings like this.
I guess I'm have a senior moment but I thought you had previously said a significant amount of those high end rental listings had just gotten pulled from the market as opposed to actually rented.
 

David Goldsmith

All Powerful Moderator
Staff member
In terms of more standard apt buildings, I had been tracking Prism on SE threads because of their relative transparency & reactivity over the past year. Of the 269 units, listings had reached as high as 49 in late 2020. It is now 7:


Looking at the line of 440 sq ft studios I had been keeping an eye on, 2019 to present:

2/8/2019​
#19A
$3,710​
studio1 bath
440​
3/1/2019​
#18A
$3,455​
studio1 bath
440​
4/16/2019​
#12A
$3,270​
studio1 bath
440​
4/20/2019​
#16A
$3,345​
studio1 bath
440​
4/24/2019​
#13A
$3,450​
studio1 bath
440​
6/2/2019​
#8A
$3,450​
studio1 bath
440​
6/16/2019​
#11A
$3,460​
studio1 bath
440​
7/1/2019​
#4A
$3,450​
studio1 bath
440​
7/29/2019​
#9A
$3,615​
studio1 bath
440​
8/10/2019​
#10A
$3,635​
studio1 bath
440​
10/12/2019​
#7A
$3,425​
studio1 bath
440​
11/29/2019​
#9A
$3,300​
studio1 bath
440​
5/7/2020​
#6A
$3,180​
studio1 bath
440​
5/9/2020​
#7A
$3,295​
studio1 bath
440​
7/1/2020​
#13A
$3,065​
studio1 bath
440​
8/21/2020​
#5A
$2,670​
studio1 bath
440​
9/30/2020​
#19A
$3,380​
studio1 bath
440​
10/7/2020​
#18A
$3,345​
studio1 bath
440​
10/12/2020​
#8A
$2,620​
studio1 bath
440​
10/31/2020​
#10A
$2,820​
studio1 bath
440​
10/31/2020​
#2A
$2,515​
studio1 bath
440​
1/21/2021​
#3A
$2,325​
studio1 bath
440​
2/9/2021​
#4A
$2,280​
studio1 bath
440​
2/13/2021​
#10A
$2,370​
studio1 bath
440​
2/16/2021​
#11A
$2,490​
studio1 bath
440​
3/18/2021​
#19A
$2,895​
studio1 bath
440​
4/3/2021​
#14A
$2,625​
studio1 bath
440​
4/15/2021​
#2A
$2,920​
studio1 bath
440​
5/5/2021​
#17A
$3,340​
studio1 bath
440​
5/14/2021​
#16A
$2,995​
studio1 bath
440​
5/26/2021​
#18A
$3,395​
studio1 bath
440​
5/30/2021​
#7A
$3,120​
studio1 bath
440​
6/13/2021​
#6A
$3,430​
studio1 bath
440​

It doesn't seem like they are playing games, but rather maximizing revenue via market pricing. In particular:

  • The lowest-priced apt available now is $6095. If they were warehousing and/or not listing full inventory, why wouldn't they have anything at a lower price?
  • If they were doing serious amounts of warehousing and/or not listing full inventory, why were they showing 49 apts in winter 2020?
  • If they were "holding the line" on higher rents, why would they go from $3635 for 10A in Aug 2019 to $2370 for the same unit in Feb 2021? And then we see $3450 for 8A in Jun 2019 vs. $3430 for 6A in June 2021. 6A spent 16 days on market and was the last sub-$5500 apt listed for over a month now.
I think talk of "continued heavy rental activity into early 2022" will prove wrong, just like "continued heavy sales activity throughout summer" seems to be proving wrong because it's all driven by return-to-NYC-by-Sept demand. But for the moment, it sure seems like it's here. Prism played it smart, and will probably leave the summer at normal-ish near-full vacancy, with existing tenants primed for renewal increases. Those who have been warehousing will be sitting on empty inventory come the fall & winter, with reduced pricing and demand IMO.
I think Prism is a bad example of what the general market did because the actions they engaged in was fairly outside of those of the majority of LLs. Also the person I know who lived in Prism said he believes they recently stopped listing everything available like the used to, but that's not really "here nor there."
 

David Goldsmith

All Powerful Moderator
Staff member
I should also say that I acknowledge and agree with your point that if warehousing LLs weren’t warehousing, the prices would be lower. But price is price: it’s the point at which buyers & sellers meet today, not where they would meet given hypotheticals.
My point wasn't that if they weren't warehousing prices would be lower, it's that they are attempting to manipulate the market. Also that as large amounts of leases end in July and August I think it's not going to be as easy to just "slip them back in" to the inventory pool and get absorbed as they think.

And to be clear, it's not that I think some landlords are warehousing units: I know some landlords are warehousing units. I just don't know exactly how many.
 

inonada

Well-known member
I guess I'm have a senior moment but I thought you had previously said a significant amount of those high end rental listings had just gotten pulled from the market as opposed to actually rented.
You are right. That was an early 2021 trend I had seen in my old building, where 3 rental listings got pulled after 4/9/10 months each. One of them subsequently got listed for sale and sold. The other two had been simultaneously been listed for sale, and in May both of those sales listings got pulled too. None have come back as listings.

Is that warehousing? I dunno. I think they could have gotten their asking rent in this market. I’m certainly seeing a lot of fast activity at that pricing happening right now. That building has no competing listings available at the moment. I figure they had a change of heart about what they want to do with the apt. Maybe keep it as a pied-a-terre, maybe wait for the sales prices to go up.
 

inonada

Well-known member
I think Prism is a bad example of what the general market did because the actions they engaged in was fairly outside of those of the majority of LLs. Also the person I know who lived in Prism said he believes they recently stopped listing everything available like the used to, but that's not really "here nor there."
I got that sense at some point too, but I don’t anymore. If they have a bunch of sub-$6000 apts sitting around, why wouldn’t they list at least one of them over the past month. I suppose they could be sitting on a pile of $6000+ apts, but that’d be weird.
 

inonada

Well-known member
My point wasn't that if they weren't warehousing prices would be lower, it's that they are attempting to manipulate the market. Also that as large amounts of leases end in July and August I think it's not going to be as easy to just "slip them back in" to the inventory pool and get absorbed as they think.

Suppose it’s Jan 2021 and you think:
  • You can get a 2-year tenant in Jan 2021 at $2400, because demand is low
  • You can get a 2-year tenant in Jul 2021 at $3600, because demand will be high
  • Pricing in 2023 and beyond is $3600
Is it market manipulation to wait for the July demand? 18 months at $3600 is more than 24 months at $2400, and you don’t have the difficulty of renewing a tenant from $2400 to $3600 come 2023.

Now you & I may believe such a strategy won’t pan out, but aren’t they allowed to think that it will?
 

David Goldsmith

All Powerful Moderator
Staff member
Suppose it’s Jan 2021 and you think:
  • You can get a 2-year tenant in Jan 2021 at $2400, because demand is low
  • You can get a 2-year tenant in Jul 2021 at $3600, because demand will be high
  • Pricing in 2023 and beyond is $3600
Is it market manipulation to wait for the July demand? 18 months at $3600 is more than 24 months at $2400, and you don’t have the difficulty of renewing a tenant from $2400 to $3600 come 2023.

Now you & I may believe such a strategy won’t pan out, but aren’t they allowed to think that it will?
The market manipulation isn't making that decision, it's telling people they've been rented at the higher rents already rather than being pulled and that they better act fast and rent units before they are gone because of how fast units are renting.
 

David Goldsmith

All Powerful Moderator
Staff member
You are right. That was an early 2021 trend I had seen in my old building, where 3 rental listings got pulled after 4/9/10 months each. One of them subsequently got listed for sale and sold. The other two had been simultaneously been listed for sale, and in May both of those sales listings got pulled too. None have come back as listings.

Is that warehousing? I dunno. I think they could have gotten their asking rent in this market. I’m certainly seeing a lot of fast activity at that pricing happening right now. That building has no competing listings available at the moment. I figure they had a change of heart about what they want to do with the apt. Maybe keep it as a pied-a-terre, maybe wait for the sales prices to go up.
While I don't think that's warehousing I do think it is an example of how there is overstatement of why availability is down.
 

inonada

Well-known member
Yep, that’s certainly market manipulation / sketchy.

Inventory dynamics definitely seem out of whack right now. Big LLs are seeing units move fast at higher prices, validating their warehousing decision. They continue warehousing, rather than lowering price, under the theory that the demand will remain past the summer. Individual owners’ shadow inventory is high because uncertainty breeds vacillation (should I sell, rent, or keep as a pied a terre???). So listed inventory seems like it’s now down to “normal”, but there is an abnormal 5x behind it. Meanwhile, instantaneous demand is peaking at 5x “normal” and gobbling up the listed inventory at a frenzied pace.
 

inonada

Well-known member
Definitely looks like your May 21st call as the ticker top will hold. If you work back from “Be settled in NYC by Sept”, May would be the right month to close. June would be OK too, July would be cutting it awfully close, August would be late (though some will do it because they are committed though late), and Sept would be all done. Will be interesting to see the Sept 30th print…
 

inonada

Well-known member
Do you have this data for rentals? It feels like July will be the peak.

SE shows less than 20K rentals available currently in NYC, compared to 40K+ in the winter. I do remember looking at the number of listings at $20K+ over the winter and seeing it around either 270 or 400. That number is now at 120, which is all the more a contrast because asking prices are appreciably higher for the same thing. Correcting for that by looking at $25K+ listings, there are 81. That’s a factor of 3.4x to 5.0x lower than before, depending on whether my memory of 270 or 400 was right.
 

David Goldsmith

All Powerful Moderator
Staff member
It's getting harder to tell how many listings of either flavor are actually on the market. Brokers keep pushing their clients to go the "discretely off market" route, StreetEasy both raises rates on rental listings and cuts the automatic feed on sales listings, REBNY starts charging for RLS (and who knows what else is in the works).

It seems like the transparency for Real Estate consumers movement is moving to a new level of "in lip service only."

(And that's not even talking about shadow inventory)
 

David Goldsmith

All Powerful Moderator
Staff member
I just saw a report about increasing incomes of those signing new leases in secondary markets. The analyst concluded that this was due to many higher earners being lured away from the largest cities and although there was no chart/data the claim was that income for those signing leases in SF, LA, Boston, Seattle, Washington DC and NYC was down. If that's true what does it say about what the market pressure on NYC rents will be? Screenshot_20210720-013859.png
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
At what point off of peak May volume do we say the decrease is greater than "normal seasonality" decrease?
This is a really good question David. Honestly given where we came from, I'm unsure. I think what we are seeing now is still in the area of regression to historical mean from last year's shutdown
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I just saw a report about increasing incomes of those signing new leases in secondary markets. The analyst concluded that this was due to many higher earners being lured away from the largest cities and although there was no chart/data the claim was that income for those signing leases in SF, LA, Boston, Seattle, Washington DC and NYC was down. If that's true what does it say about what the market pressure on NYC rents will be? View attachment 344
Hmm, logically the Sargent makes sense and pressure would be down, but I'm hearing the rental market is staging one hell of a comeback right now with rents starting to rise again
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
It's getting harder to tell how many listings of either flavor are actually on the market. Brokers keep pushing their clients to go the "discretely off market" route, StreetEasy both raises rates on rental listings and cuts the automatic feed on sales listings, REBNY starts charging for RLS (and who knows what else is in the works).

It seems like the transparency for Real Estate consumers movement is moving to a new level of "in lip service only."

(And that's not even talking about shadow inventory)
I don't like it I must say. Real estate Data wants to be free and transparent, but here we are
 
Top