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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

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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]


3 Responses to “[Manhattan Absorption] August 2013 – Don’t Blink or It’s Gone (Except Trophies)”

  1. Jonathan, if the absorption rate for condos in the $5-$10MM range is twelve months, and for those above $10MM it’s 27.9 months, why do developers keep building these wildly expensive properties? Who’s going to buy them? Do you foresee a glut? And why is nobody building less expensive properties when we’re starved for inventory at the lower price points? Always find Matrix fascinating–thanks

    • Thanks Confidence. Developers are largely forced to target the high end of the market because of the cost of land and construction. The math doesn’t work at the lower price points. If the high end softens then land prices slide and the math begins to work again. Rising housing prices tip more inventory in the market as people have more equity to participate although that has not happened in Manhattan yet.