Posted by Jonathan J. Miller -Saturday, April 7, 2012, 6:04 PM
Comments Off
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 “blue” line for average changes very little year to year but the scale of the chart does frequently.
Side by side Manhattan regional comparison:
March 2011 v. March 2012
[click images to expand]
Thoughts on the year-over-year comparisons
- Manhattan Most price segments below $3M remained faster than 10-year average pace of sales and accelerating. $5M to $10M accelerated while $10M+ slowed
- East Side Below $3M gained speed while $10M+ condos slowed.
- West Side Similar to overall Manhattan
- Downtown Below $3M gained speed while $3M+ slowed.
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.
Posted by Jonathan J. Miller -Thursday, April 5, 2012, 2:02 PM
Comments Off
[click to open press release]
One of my issues with existing national price indices (I have many) has been that they reflect what happened after the fact. That in and of it self is not a bad thing at all. The problem concerns their use by the consumer and media. They rely on them and often have no idea of the severity of the trend lag (as much as 6 months). This lag is interpreted as the current market and then they proceed to mischaracterize or misunderstand what’s actually happening in housing right now.
Jed Kolko, the Trulia’s chief economist has come up with what looks to be a much better way to look at the direction of housing prices by following list price trends which lead home price trends by several months. He’s also created The Trulia Rent Monitor which addresses the same issues on the rental market. Both reports are based on what Trulia does well, aggregating and managing listing information by the boatload.
Trulia Price and Rent Monitors – March 2012 Download
The Trulia Price and Rent Monitors rely on the latest asking price or rent rather than the original to better track the direction of the market. Prices on MOM, QOQ and YOY on based on a 3 month moving average. Here’s the nitty gritty. Love the “technical” and “non-technical” FAQ notes detailing how it works. Jed is very clear that this is not a way to “game” the existing indices like Case Shiller and predict them in advance of their release (aka accurately predict what a 4-6 month old index result will be tomorrow) which serves an entirely different purpose I suppose.
I thought it was particularly interesting that some speculative and depressed markets are showing the most upside swing – i.e. Detroit, Miami, Phoenix. CA still weak throughout. The NYC metro results are consistent with what we are seeing throughout the region, prices down 3.3% YOY and rents are up 6.2% YOY.
From the press release, the Trulia Price Monitor for March 2012 shows:
- Asking prices up 1.4% quarter-over-quarter, seasonally adjusted. This is the first clear indication of a national home-price turnaround. Unadjusted for seasonality, prices were up 2.4%.
- Asking prices up 0.9% in March and 0.6% in February, month-over-month, after bottoming in January 2012.
- Strong year-on-year increases in asking prices throughout Florida, and year-on-year price declines throughout California.
The Trulia Rent Monitor for March 2012 shows:
- Rents up 5.0% year-over-year.
- Rent increases in nearly all large metros, especially metros with faster job growth.
Note: I have been on the Trulia Industry Advisory Board since its inception in 2006.
- Why US Housing Indices Make Terrible Investment Benchmarks [Matrix]
- Asking Prices on the Rise as Housing Recovery Expands [Trulia]
- Trulia Price and Rent Monitors – March 2012 [Trulia]
- Trulia Price and Rent Monitors – FAQ [Trulia]
Posted by Jonathan J. Miller -Wednesday, March 28, 2012, 10:00 PM
Comments Off
It’s time to share my Three Cents Worth on Curbed NY, at the intersection of neighborhood and real estate in the capitol of the world. And I’m simply here to take measurements.
Read today’s 3CW post on Curbed New York:
Next week we release the Manhattan 1Q 2012 market report. I’m sifting through the data now but I thought I’d take a shot at seeing ahead into the second quarter sales based on listing activity in the first quarter. I realize this is fraught with statistical pitfalls and I am using too many graphic elements in this one but hey, this is Curbed and I’m USING arrows…
[click to expand]
Posted by Jonathan J. Miller -Thursday, March 22, 2012, 7:22 AM
Comments Off
The New York Fed publishes a coincident index using data on employment, real earnings, the unemployment rate and average weekly hours worked in manufacturing and its beginning to show nominal weakness. This comes out monthly and I keep an eye on it. The employment numbers were rebenchmarked in 2011 which made the second half of last year better than originally reported.
A coincident index not a lagging indicator like consumer confidence or a leading indicator like building permits. Coincident is closer to what is happening now, or it least that is what my smart economist friends tell me.
The latest release (January 2012 data):
January’s Indexes of Coincident Economic Indicators Show Fairly Robust Activity across the Region
In January, the New York City Index of Coincident Economic Indicators (CEI) increased at an annual rate of 3.1%, following a 2.9% increase in December. The index is up 3.5% over the past year.
It looks like the regional economy is grinding out “solid”, “robust” gains. Eventually this will be helpful to housing in the region, whether or not credit eases anytime soon.
Posted by Jonathan J. Miller -Wednesday, March 21, 2012, 9:43 AM
Comments Off
[click to expand]
When I was contacted to do yesterday’s Bloomberg interview, a by-product of the producer’s call was to show the affordability of housing to Wall Street. We never covered it in the interview and I was (self) taught never to waste a good charting opportunity.
While there is no reliable causation measure of bonus size to Manhattan housing prices there has long been a connection (i.e. common sense). I took the Manhattan annual average sales price for the past 20 years and compared it to the average annual Wall Street bonus per person. The resulting multiplier shows some element of affordability: the higher the multiplier, the less affordable Manhattan housing is.
I realize there are disclaimers needed in doing this including:
- With the regulatory overlay from DC rising, bonuses are becoming smaller relative to overall compensation.
- Not everyone on Wall Street getting a bonus lives in Manhattan (but a
disproportional amount probably do).
- Bonus income is just less than half of total Wall Street compensation.
- Post-Lehman saw higher share of deferred bonus over cash.
- Wall Street total comp only accounts for about 25% of total NYC wages.
- Foreign buyers and Fortune 500 type executives have picked up some of the Wall Street slack.
With those disclaimers aside or perhaps because of them, the chart shows:
- The 20 year trend shows greater affordability over time but significant volatility along the way.
- Post-Lehman the multiplier shows slightly weakening affordability (despite falling interest rates).
- The early 1990’s recession, 2001 recession and 2008 credit crunch/recession all showed sharp reductions in affordability (higher multiplier).
- The 20 year average annual multiplier is 9.9
Given the fact that sales contract activity seems to be ahead of last year, prices remain stable, foreign buyers continue to participate in large numbers and the economy is grinding towards improvement in the region, the decline in bonuses doesn’t appear to be a huge deal for the housing market at this point. Certainly not helpful but perhaps can be characterized as having a nominal impact on the market – if you believe this methodology.
- Manhattan Bonus to Price Multiplier [Miller Samuel]
- [In The Media] Bloomberg Television’s “Street Smart” 3-20-12 [Matrix]
- Wall Street Comp’s Influence On Luxury Housing Prices [Matrix]
Posted by Jonathan J. Miller -Tuesday, March 20, 2012, 2:27 PM
Comments Off
One of the by-products of my Three Cents Worth column (3CW to those in the know) is the generation of other data in the process of coming up with a chart.
As a side bar to my Curbed post this week, I also created the tallest chart ever with every residential sale (co-ops, condos and townhouses) from 2003 to 2011 (plus January 2012) in a single chart. I thought it was important to show better context in the market data since we all throw around $88M like it was a generic sales event.
Hey Guiness Book of World Records – check out the chart. ====>
Click graphic to the far right to see it in all its glory. =================>
- Tallest Chart in the History of Manhattan Real Estate [Miller Samuel]
- [Three Cents Worth NY #182] Charting Manhattan’s Sales History [Matrix]
Posted by Jonathan J. Miller -Tuesday, March 20, 2012, 2:06 PM
Comments Off
It’s time to share my Three Cents Worth on Curbed NY, at the intersection of neighborhood and real estate in the capitol of the world. And I’m simply here to take measurements.
Read today’s 3CW post on Curbed New York:
This is the final chart of the Manhattan scatter graph trifecta. I thought this format was a great way to look at the entirety of the market with better context. This week I am literally long on graphics and short on text. I used the same approach as two weeks ago but divided the market into easier-to-view scaled segments and then placed them on top of each other aligned by years. A few things stood out:…
[click to expand]
Posted by Jonathan J. Miller -Wednesday, February 29, 2012, 5:25 PM
2 Comments
It’s time to share my Three Cents Worth on Curbed NY, at the intersection of neighborhood and real estate in the capitol of the world. I’m simply here to take measurements.
Read today’s post:
Since the New York State Comptroller announced official Wall Street 2011 compensation numbers today (to be distributed in 2012), I thought I’d compare Wall Street compensation per person against Manhattan sales by year. As an industry, real estate seems to think it lives and dies by Wall Street compensation. No argument that it’s important to the NYC economy, accounting for 25 percent of NYC private sector wages but only 5 percent of private sector jobs…
[Click to read full post on Curbed NY]
Posted by Jonathan J. Miller -Tuesday, February 14, 2012, 6:00 AM
1 Comment
[click for full analysis]
Brookings provides a good overview of the basic economic metrics over the past 5 quarters. There’s much more on the site.
I love short succinct visuals – sort of like spark line charts in Excel. Memo to self: While I give a 5 quarter breakdown in my reports, I need to do this with my report releases.
How We’re Doing Amid Policy Gridlock [Brookings Institution]
Posted by Jonathan J. Miller -Wednesday, October 27, 2010, 1:15 PM
1 Comment
Source: New York Federal Reserve [click to expand]
At least once a week I am asked about the breakout of the housing stock in Manhattan. My latest research/estimate has been 75% rental/25% owned for the borough and of the 25% owned, co-ops out number condos 3:1 or 75% to 25%. If you throw in townhouses, thats about 1% out of the 75%/25% co-op/condo relationship.
Ok, so apparently I wasn’t making this up. Here’s the New York Fed’s housing profile based on Census and the Housing and Vacancy survey. Phew! A great reference point for not only Manhattan, but all 5 NYC boroughs.
