Manhattan Inventory Less Than 9000!

"I'm going to take my apartment off the market for the slow holiday season, and then re-list when spring is approaching."

That may be true, alanhart, but I am getting a lot of "in contract" alerts on streeteasy.

alanhart

I recognize that line from somewhere else...

Oh yeah, just substitute "summer" for "holiday" and "Labor Day" for "spring" and repeat as necessary.

From my experience (I've been looking since June) that's because the majority of people who are listed now really NEED to sell and they've slashed prices. Bargain hunters who are willing to make concessions are scooping up the well-priced places but from my search, most of what's out there is crap. From the 30 or so apartments I've seen, only 2 have gone into contract, and those were priced well, and the rest are still way overpriced/sitting.

With a running average of 1000 sales per month (5 dozen yesterday alone) it's getting harder and harder to buy the argument that the Manhattan market has been anything but healthy for the last 6 months.

I sold 5 units over the past 2 months. Mostly 1 bedrooms.

Things are moving at the right price.

except that prices remain lower, sales remain skewed to the smaller units, and despite very robust sales, inventory is high for the season. rents continue to decline. and several new developments look like they are on the verge of implosion.

otherwise it's the vision of health.

IN the last 4 weeks there has been aprox:

1309 listings REMOVED from market
995 listings ADDED to market or BACK ON market
1,014 listings that went to CONTRACT

Some developments deserve nothing less than complete implosion. Their pricing structure was flawed from the beginning.

To maintain a healthy balance in nature, some must die while others thrive.

you'll get no arguments from me there, spin. but at least temporarily the implosion could rock our real estate world. likely you'll see some flight to safety, so certain subsets may even strengthen, but that won't be universal.

The ratio of sales of smaller units to larger units should be somewhat proportional to the number of units of each category on the market at any given time. It stands to reason that we see more sales of smaller units than we do large.

Thank you UD, carolst as well. Of course things are selling. Some people HAVE to sell and some people want to buy because they can. It doesn't mean that prices aren't going to drift downward. Do people not understand that real estate is a herd mentality? Stocks can clear out in hours. Your house? Not so much. I'd be interested to hear from UD on what he's seeing with regards to his latest post. Are people walking away when they see the appraisal come in, or are sellers willing to negotiate?

but it hasn't been. absorption rates have been much higher (and unusually so) for lower priced units due to the conforming loan issue. it's been moving up in recent months, and the $1-2mm segment has been doing better.

My buyer just had an appraisal completed on a new development 3 bedroom...to all our surprise it appraised at the ask (which was set in 2007).

Many of the buyers I am working with have taken the "Armageddon scenario" completely off the table and are looking at the market one apartment at a time. If they can reach what they deem is a fair price for a home they want to live in..they are pulling the trigger. What has been happening the last 2 months is many of our offers are falling short on the AAA units we are bidding on. Some of my customers are frustrated, but we are not going to chase the market....patience and persistence.

Look at this chart

http://www.urbandigs.com/charts3.html

Look at it over 6 months

Inventory is down not because contracts are up, they are down(blue line), but because new listings are down even more(red line). Do you think apartments are getting up and leaving the city?? No, in fact supply continues to increase. There are 4 unfinished buildings in my immediate neighborhood that will add about 1000 units of supply when they are completed.

Until all of this supply is onto the market and absorbed, there is more downside.

Noah, year over year comparisons would be best if/once you have the data(you know this).

There might be problems in the addition of the off the market listings. In Central Harlem you have:
34 new listings,
417 no longer available
in the last 7 days
This looks like a SE error to me, one that can be impacting the final number.

i have a different data source now, and the platform is done. We are on break for holiday and but when we get back to work we will be designing the new system and as of now we got status updates (14 million of them)going back to 2004 I believe. So lots of precomputing to get done.

My inventory is around 8700 or so, while in JAN 2007 it was 5000, JUL 2006 around 4400. In mid 2009 it was 11000 or so. Data for contracts signed, listings removed, etc need way more fine tuning as you must understand the data is only as good as the agent that updates, the status that is updated and we need to determine what variables play for each metric in terms of when the last update was. Gets tricky to get all these nailed down and we are testing dozens of scenarios to figure out which is most accurate. Going to take another 2 months or so I think

TRUST ME - there are MANY MANY issues with how existing data has been calculated! Nobody put the time and effort and money into cleansing all the data - SE did a great job, as good as is out there, but I always think it can be done a bit better.

For OFF MARKET, how does one count it? Lets say a unit was off market for 2 months, 4 months, 12 months, 19 months? Etc. When does it end? Sometimes the status is never updated. So what constitutes OFF MARKET for sake of analyzing potential shadow inventory that may or may not come back to market? These are the little things that affect each metric worth tracking and takes time to work out exact methodology for how you calculate the metric

Data we got originally was a complete mess. Now, my confidence is very very high. Tons of errors that had to get adjusted for and corrected. Crazy if you ask me that quarterly reports were built off this data that was so messed up - times must change

Thanks for the updates, Noah! Look forward to the improved data.

I believe that just in Central Harlem the error is of more than 400 units off the market. That HAS to be creating a data problem.

mimi, noah isn't using SE data. he's reinventing the wheel, so to speak. and good on him for doing so.

Accept data points that agree with your doom and gloom argument (many less of these recently) and completely pick apart as wrong all the data points that do not agree with your doom and gloom argument (which there are a majority these days)

could someone explain to me what in contract means, exactly? is it when a buyer is in negotiations with seller or when buyer has singed an offer or?

it is when a contract of sale has been fully executed by both the buyer and the seller. everything up until that point is just negotiations.

In contract is when you have the contract out, meaning you have reached an agreement on the price and the buyer's lawyer gets the contract for review, then you may have the mortgage approval process slowing things down.. so you could be in contract for 2-3 months before the CLOSING.

eurocash - "In contract is when you have the contract out, meaning you have reached an agreement on the price and the buyer's lawyer gets the contract for review"

THAT IS NOT TRUE! At least not for this market. I know some markets consider a verbal agreement on price binding, NOT SO in Manhattan!

IN CONTRACT - which is what the last commenter was questioning, refers to a listing whose status update was changed to reflect the fact that a contract of sale has been fully executed by both parties in the transaction, and the listing is now pending closing (seecuring a loan/board approval) - and is not being marketed anymore.

Contract "out": generally understood to mean price has tentatively been agreed upon and parties are finalizing negotiations of contracts other terms. There is, however, no legally binding agreement at this point--all is preliminary and neither party is bound to anything.

"In contract" means BOTH parties have signed a contract and the deal is proceeding toward closing. There may or may not be clauses that provide for cancellation of the contract if certain things do or don't happen, but the key is that there is now a legally binding agreement in place and the parties must both abide by its terms. Neither can simply walk away any more. The contract can only be terminated per the terms set forth in the contract itself.

"Accept data points that agree with your doom and gloom argument (many less of these recently) and completely pick apart as wrong all the data points that do not agree with your doom and gloom argument (which there are a majority these days)"

Extremely amusing coming from the guy who said Manhattan would up 15%... right before it went down 25%... and STILL hasn't acknowledged the data that showed he was a moron.