[Manhattan Absorption] Weakness Appearing in Sub-$500k?

Posted by Jonathan J. Miller -Tuesday, November 16, 2010, 12:01 AM
2 Comments

Absorption defined for the purposes of this chart as: Number of months to sell all listing inventory at the annualized pace of sales activity. I started this analysis in August 2009 so as of late I am able to show side-by side comparisons. The blue line that shows the 10-year 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.

We are starting to see some weakness at the lower end of the price spectrum this month, possibly in connection with the expiration of the federal tax credit. Sub-$500k apartments are seeing a higher absorption rate than their $500k+ counterparts. However, absorption rates as compared to last year are still generally lower across the board by price and region.

Side by Side Comparison: October 2010 v. October 2009

[click images to expand]

Manhattan Absorption Archive 2010 [Miller Samuel]
Manhattan Absorption Archive 2009 [Miller Samuel]

Note: This chart series does not include shadow inventory (properties ready for market but not yet listed for sale) so this anlaysis understates the rate of condo absorption. The Uptown (Northern Manhattan) data set is too thin for a reliable presentation.

2 Responses to “[Manhattan Absorption] Weakness Appearing in Sub-$500k?”

1. Edd says:

   November 16, 2010 at 9:42 AM

   Thanks for including the definition. Far too often we appraisers fail, to our professional chagrin, to define our assumptions and premises very well, if at all.

   Thanks for enhancing this profession, Jonathan. You have much to offer and give generously. Keep up the good work.
   • Jonathan J. Miller says:

     November 16, 2010 at 12:05 PM

     Thanks Edd – as my data visualization hero Edward Tufte of Yale likes to call it “the wonder of the data”