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[Manhattan Absorption] January 2014 – “Bottom 99%” of Market Is Tight

February 5, 2014 | 7:00 am | Charts |

1-2014Manhattan [click to expand]

Thoughts
For the overall Manhattan Market, in fact for the “Bottom 99%” (I love saying that) of the market, the absorption rate is well below the year ago period. Record high sales and record low inventory has pressed the absorption rate to the floor. For the $10M+ market (top 1%) the absorption rate has slow sharply from a year ago. While this segment has always been a LOT slower than the market overall (see archives below), it has slowed considerably. The next highest segment $5M-$10M has essentially remained the same with the remainder of the submarkets seeing much more rapid absorption rates over the same period. All regions saw similar changes from the year ago period.

Side by side Manhattan regional comparison:

January 2014 v. January 2013
1-201401-2013
[click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month for that market area.

Definition
Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in our market report series reflects the quarterly pace – nearly the same)


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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[Manhattan Absorption] August 2013 – Don’t Blink or It’s Gone (Except Trophies)

September 9, 2013 | 3:42 pm | Charts |

[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month for that market area.

Side by side Manhattan regional comparison:

August 2013 v. August 2012

[click images to expand]

Compared to last year, everything below $5M (all but a few % of the market) is flying off the shelves as evidenced by very fast absorption rates. The $1M to $1.49M Manhattan co-op market is seeing absorption rates as low as 2.4 months, an incredibly fast pace. The weakest segment appears to be $5M and $10M+ condos, which are seeing absorption rates of about 12 months and 28 months respectively. High end co-ops, especially those above $10M (<1% of the market) are also absorbing slowing, averaging about 16 months. The balance of the co-op market (nearly all of it) is being absorbed faster than the 10 year average absorption rate.


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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[Manhattan Absorption] July 2013 – Most of Market At Breakneck Pace, But North of $5M Slows

August 22, 2013 | 10:54 am | Charts |

[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

July 2013 v. July 2012

[click images to expand]

This month I began to make the Y-Axis fixed in height so better side-by-side comparisons can be made in the future. The disparity in pace of the market between the $5M+ (slowing) and the remainder of the market (brisk) widens. An exception to this seems to be the co-op market from $5M to $10M which is absorbing at an average pace while the condo market in the same price range is moving much more slowly. This is likely because re-sale units are competing with the surge in new condo units entering the market (most won’t start closing until next year) and are often over listed, influenced by the new dev pricing even though buyers view new development with a premium value.


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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Zillow Acquires StreetEasy, Goes Vertical, Literally

August 19, 2013 | 10:41 am | |

I was reading my twitter feed and it just jumped out at me: Zillow announced their acquisition of StreetEasy for $50M in cash. I also heard it simultaneously on the show Bloomberg Surveillance. Their CEO Spencer Rascoff will be on the show tomorrow morning to talk about the acquisition.

While there will be lots of prognosticating about Zillow‘s entrance into the NYC housing market through a heavily used resource like StreetEasy (Zillow was here already, just not taken very seriously).

I think there’s a bigger story for Zillow. If Zillow leverages the StreetEasy data presentation model, Zillow will be shaking up the housing market real estate information space across the US.

Think highrise urban housing markets – I call them “vertical” markets (not to be confused with “vertical” in marketing parlance).

• All national data aggregators and brokerage companies haven’t yet figured out vertical housing markets yet in terms of their presentation of information.
• MLS systems remain firmly single family orientated and have yet to present data in highrise markets in a visually logical way – ie co-ops and condos. Symbolic of the general primitiveness of MLS systems in handling multi-unit housing, one MLS system in the NYC metro area still tags “co-ops” as “condos.”

Kudos to Streeteasy for shaking up the market from day one. When they launched, StreetEasy became the housing data resource of choice for most in NYC. I met most of the team a while back and I was impressed with how a small group of people could really shake things up in a huge market. While presenting clean data in a very dirty data environment continues to be a challenge, I think their greatest contribution to the housing market has been how they displayed their information – in a way that consumers screamed for.

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[Manhattan Absorption] May 2013 – Fast Pace Below $2M Remains, Slowing On Top

June 6, 2013 | 7:00 am | Charts |


[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

May 2013 v. May 2012

[click images to expand]

Significant acceleration in the pace of the market below $2M, not much change from $3M to $10M and continued slow down north of $10M


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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[Manhattan Absorption] April 2013 – The Bottom 90% is Brisk

May 12, 2013 | 12:59 pm | Charts |

[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

April 2013 v. April 2012

[click images to expand]

The market pace continues to be brisk below the $3M level (incidentally that accounts for 90% of the market).


Manhattan Market Absorption Charts 2013 [Miller Samuel] Manhattan Market Absorption Charts 2012 [Miller Samuel]

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[Manhattan Absorption] March 2013 – What a Difference a Year Makes

April 7, 2013 | 11:10 am | Charts |


[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

March 2013 v. March 2012


[click images to expand]

In sub-$3M the market pace is moving twice as fast as the 10-year average and also faster than the $3M+ markets. Especially note the acceleration below $1M in the side by side comparison to 2012 above.


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

Tags:


[Manhattan Absorption] February 2013 Shows Not Enough Supply To Wet A Sponge

March 18, 2013 | 1:16 pm | Charts |


[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month.

Side by side Manhattan regional comparison:

February 2013 v. February 2012


[click images to expand]

Although everything seems to be absorbed at an historically fast pace, co-ops are generally being absorbed more slowly in nearly every price segment below $5M.


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

Tags:


On Bloomberg TV, Surveillance w/Tom Keene 3-11-13: Housing, Mortgages, Rising Prices

March 11, 2013 | 11:46 am | | Radio |

Had a great visit with Tom Keene this morning on Bloomberg TV’s Surveillance along with Scarlet Fu and Sara Eisen. It was simulcast on Bloomberg Radio.

Also in studio was James Lockhart, vice chairman of WL Ross & Co., formerly the head of GSE regulator FHFA. We were also joined by Nicolas Retsinas, a senior lecturer in real estate at Harvard Business School who called in – he has been on my old podcast a few times. Both provided great insight to the housing narrative.

Here’s the second clip from the same session. My basic premise is that while new home sales are rising, it will not be enough to address the collapse of listing inventory which will drive housing prices higher in the US. Hint: It’s mostly about tight credit. Housing is local and credit is national.

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[Manhattan Absorption] January 2013 Absorbing Faster Than Paper Towels

February 4, 2013 | 11:57 am | Charts |


[click to expand]

Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the annual pace of sales activity. (The definition of absorption in my market report series reflects the quarterly pace – nearly the same)

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed quarter.

Side by side Manhattan regional comparison:

January 2013 v. January 2012

[click images to expand]

All market segments below $5M, which is roughly 95% of the housing market are seeing their fastest pace (lowest absorption rate) in the 12 years I’ve been tracking listing inventory.


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

Tags:


[Housing Recovery Update] Proclamations Over Reasons, Statistics Over Logic

December 13, 2012 | 10:20 am |

Once a month a local real estate broker passes out monthly updates of our local Connecticut housing market at our commuter train station. He’s a nice affable guy and I get to hear him explain the market to people as we wait in the warm station. He said this to me after I took a look at his handout this morning,

“The statistics aren’t too shabby, eh?”

And I smiled and responded, “that’s the power of record low mortgage rates.” to which he gave me the “thumb’s up” gesture.

And he’s right, his MLS statistics show a very much improved housing market from a few years ago and nearly all of the improvement has been mortgage rate related.

His view of housing is not unlike most public economic prognosticators from Wall Street, NAR, NAHB and real estate brokerage firms, consumers and general in-the-media-all-the-time types.

However few, if any, prognosticators understand why or seem interested in understanding whether it is sustainable (aka forecasting a trend). Once a metric shows promise, it will rise forever, or something like that.

Here’s my town recap for November being presented as a report (with a wildly low 15 sale data set). All the percentages reflect November 2012 over November 2011:

  • New Listings -40%
  • Pending Sales +36.4%
  • Homes sold +15.4%
  • DOM +53%
  • Average Sales Price +29.4%
  • Average Dollar Volume +49.3%

Despite the low data set, the results are remarkably consistent with national trends. Now look at why these metrics actually changed:

  • New Listings -40% [tight credit pressing inventory down because sellers can’t buy]
  • Pending Sales +36.4% [record low (and continuing to fall) mortgage rates + high rents]
  • Homes sold +15.4% [behind pendings because pace of sales accelerating as rates fall]
  • DOM +53% [older stagnant inventory is getting sold off from lack of supply]
  • Average Sales Price +29.4% [more high end sales are moving this year]
  • Average Dollar Volume +49.3% [same as above]

If you pull the plug on low rates, the housing market (literally) plunges. No one is suggesting this is the scenario that will occur but the national housing market feels incredibly fragile to me.

But why should I (or anyone else) actually care whether we understand what’s actually going on? The stats show sales and price numbers are higher than last year – “bullet dodged” – that’s all we need to know – we did the math.

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Serious Jibber-Jabber: Lessons from Nate Silver to Filter Out Housing Noise

December 10, 2012 | 7:00 am | TV, Videos |

I really enjoyed this “Charlie Rose”-like interview by late night TV host Conan O’Brien and statistician Nate Silver on his “Serious Jibber-Jabber” series. I recently bought Nate’s book “The Signal and the Noise: Why Most Predictions Fail but Some Don’t” and it’s next on my reading list (actually I bought 2 copies because I forgot I had pre-ordered on Amazon for Kindle and ordered again from Apple iBooks, Doh!).

What I found intriguing about the discussion is how much effort it takes to filter out the noise and get the to meat of the issue as well as getting outside of your self-made insulated bubble to be able to make an informed decision – aka neutrality.

Real estate, like politics, is a spin laden industry whose health is very difficult to gauge if you rely on people and institutions who have a vested interest in the outcome. i.e. Wall Street, rating agencies, government, banks, real estate agents etc.

Some interesting points made:

  • During the bubble, for every $1 in mortgages, Wall Street was making $50 in side bets.
  • Many people during the housing boom saw it was a bubble but didn’t want to miss out. They would see the green arrows pointing up on CNBC screen and it became very hard to be contrarian and be left behind.

The current “happy housing news” that is all the rage seems to draw a parallel with the pundits who got the election outcome all wrong yet all were experienced in politics. The housing herd is disconnecting from what the data is showing.

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