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 -Wednesday, April 4, 2012, 10:45 PM Comments Off
Had a quick couple of clips in this one covering the Manhattan housing market. Inventory restrained, pent-up demand for Q2 to be released, credit remains tight, etc. Always great to speak with Suzanne Pratt at NBR.
Posted by Jonathan J. Miller -Tuesday, April 3, 2012, 12:57 PM 2 Comments
[click to expand]
The Elliman report for the 1Q 2012 Manhattan Market that I author was released today and there was a lot of commentary thrown around that I thought I’d apply actual data to. They relate to the topic of “bidding wars” and some sort of upward price skew cause by the closing of the $88M sale this quarter (contract signed in December).
More “bidding wars” What’s being projected as market conditions The chart above is my attempt to quantify this phenomenon. When a property is sold above the list price at the time of contract, then it’s reasonable to assume there was intense competition between buyers that drove the property over list aka “bidding war”. I doubt there are many buyers on earth who would pay over list price unless there is more to the story.
What’s our take on the story? We estimate that 8.4% of all sales in the quarter were sold above list price and therefore were subject to a “bidding war.” However it’s probably a bit higher than that since 11% of the sale sold for list price. There might have been a bidding war up to the list price and the buyer with the best terms (i.e. cash) won the bid. However I would not characterize the market as rampant with bidding war activity right now. It’s been steadily rising since 2Q 2009 but still remains about half the levels seen just before the credit crunch began in 2008.
The $88M sale skewed the overall numbers higher What’s being said about the record sale’s impact to the market results The record sale at 15 Central Park West closed for $88M during 1Q 2012 and there was concern that this simply skewed the numbers and overstated the results.
What’s our take on the story? This is not the case. When removing the $88M sale from the mix, the median sales price of $775k remains unchanged. That’s because median sales price slices from the top and bottom until it meets in the middle. There were 10 sales that sold for $775,000 this quarter and therefore the removal of this high sale had no impact on the middle. Average sales price was skewed 2.7% higher than it would otherwise would have been. Still not a big deal and it would be inappropriate to remove the $88M from the data set – otherwise the $48M and $36M sale in the year ago quarter would also need to be purged.
Posted by Jonathan J. Miller -Wednesday, March 21, 2012, 9:43 AM Comments Off
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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.
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.
Posted by Jonathan J. Miller -Tuesday, March 20, 2012, 10:32 PM Comments Off
Was invited to be on Bloomberg TV’s Street Smart today with Trish Regan to talk about the outlook for Manhattan housing prices with particular attention paid to reduced bonus compensation. Always fun to go to BB.
True (funny) story just before I did the interview:
I was getting mic’ed up and makeup applied while waiting for my turn on the set when I looked up and standing in front of me was Patrick Doyle of Domino’s Pizza holding a large pizza box as a prop for his appearance (It must have been warm because it smelled great).
I introduced myself and he couldn’t have been nicer, and a bit self conscious standing in a newsroom holding a pizza box. I immediately remembered his latest commercial – my kid’s and I were commenting on it last weekend while watching March Madness. I quipped to him that I had a few ideas that could make me CEO – he cracked a smile and then proceeded to do a great interview – check out his closing line in the commercial so my story makes sense.
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.
Posted by Jonathan J. Miller -Tuesday, March 13, 2012, 2:38 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. And I’m simply here to take measurements.
I was drinking a cup of coffee bought from a bodega I was walking by (the only way I could squeeze in a bodega reference) and had a thought. After coming off of last week’s scattergraph bender, I decided to apply the same approach to flesh out the price resistance that occurs at the $1M threshold. I selected a price range of equal distance above and below $1M and let the dots fly. Each dot represents a closing date and price from $750,000 to $1,250,000 from 2003 to 2011 (plus a few weeks into 2012)…
Posted by Jonathan J. Miller -Tuesday, March 13, 2012, 10:00 AM 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.
Side by Side Manhattan regional comparison:
February 2011 v. February 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. $3M-$5M and $10M+ slowed while $5M-$10M accelerated.
East Side Co-op absorption continued to remain slower than a year ago pace of sales. Condo pace of absorption, specifically below $2M noticeably accelerated.
West Side Sub-$2M more or less the same as last year. Weaker above $10M.
Downtown Same as last month – the rates by segment generally accelerated below $5M and $10M+. The $5 to $10M segment 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 -Wednesday, March 7, 2012, 2:09 PM 1 Comment
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.
With so much discussion about the upper end of the market, I decided to look at the top 1 percent of Manhattan co-op, condo and townhouse closings as a scattergraph since the dawn of time (i.e. 2003, when the boom started to gather steam, nearly a decade ago). Each dot represents a closed sale at or above $10M…
[click to expand]
some added fun – same chart below but without the $88M 2012 sale for an easier to read graph
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.
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…
