2010 Q1 Market Reports

"The median price rose 7.2 percent from the previous quarter, according to the Miller Samuel and Prudential Douglas Elliman report."

http://www.observer.com/2010/real-estate/manhattan-housing-its-bounce-time-around

According to the report from Prudential Douglas Elliman and Miller Samuel, half the apartments traded in Manhattan in the first quarter went for at least $868,000. That's a median price up over 7 percent from the quarter before, and one comparable to median prices seen during the last boom

Other reports detail similar price bumps since the end of 2009. The Corcoran Group shows the median up 3 percent and the average up 2 percent, to $820,000 and $1,393,000, respectively. Halstead Property also puts the median at $820,000, higher than the quarter before; the average was $1,396,883, the highest in a year.

"That's a median price up over 7 percent from the quarter before, and one comparable to median prices seen during the last boom"

Uhh, OK. Let's see what Miller Samuel's data has to say:

3Q, 2009 850,000
2Q, 2009 835,700
1Q, 2009 975,000
4Q, 2008 900,000
3Q, 2008 928,263
2Q, 2008 1,025,000

uh oh...seems like someone mis-stated the historical numbers. what a surprise.

This had me scratching my head:

"The median price for a co-op or condo slid 11 percent to $868,000."

Yet:

"Studio apartment prices fell 14 percent from a year earlier to a median of $375,000, Miller Samuel said. One-bedrooms slid 12 percent to $627,500; two-bedrooms sank 25 percent to $1.21 million and three-bedrooms plunged 36 percent to $2.4 million."

So the overall market slid 11%, yet every single category slid by more than 11%. I assume this means that the mix of apartments in the median must have moved up appreciably?

yes...or they are simply doing the numbers differently to suit their own purposes.

all the anecdotal information (which is worthless, i suppose) would indicate that the mix slid the other way.

"uh oh...seems like someone mis-stated the historical numbers. what a surprise."

I didn't mean to leave out 4Q, 2009 from the table; it was 810,000. So there was indeed a 7% increase. And in the article's defense, 868,000 is comparable to 1,025,000.

inonada: "I assume this means that the mix of apartments in the median must have moved up appreciably? "

I agree, except there's NO mix of 14, 12,25 and 36 which comes out as 11. The problem is that these people STILL can't help themselves from distorting numbers and presenting them in ways which show that no one should listen to what they have to say. The slight of hand you are seeing here is probably that they so interchange numbers for "Coops & Condos" and just "Coops", and don't mention "Lofts" or a catch-all "other" category that you never know what is counted where, or counted at all, you don't know when they are talking about which. Note the 11% median slid for "Coops and Condos"; but they don't specify what the broken out numbers are (Coops, Condos, Coops and Condos, something else?).

Also, the median price of sales is really a terrible indicator of what people really want to know: WTF is the market actually doing? These reports are still what they have always been: numbers fed into calculators using equations which the operators don't really understand, all they really want to do is have something official looking to announce to make it look like they have a handle on things. And when what they want doesn't quite work out, they go back and revise the numbers, sometimes YEARS later, and hope that no one catches that they said the market was doing one thing at the time, and now say it was doing something different during that time period.

Note the range in quotes from 8.2% from SE to 11% from MS. And supposedly "everyone is using the same data now"? Also note that according to MS "The number of sales soared to 2,384 from 1,195 a year earlier", but on the first page of the Corcoran report, we see "Twenty-three percent more properties sold in the First Quarter of 2010 than in the same quarter one year ago."

And to drive home how ludicrous some of these numbers are (vs reality), take a look at the Corcoran Report on Townhouse Sales:
On the UES, average price fell 44% and median fell 56%, while on the UWS, average price rose 84% and median rose 92%, and Downtown average price rose 80% and median rose 112%. Really now?

If not median, then what mean? a $50,000,000 property gets sold in the quarter and there go your stats..

its clear of two things as you read all these reports, that vary a bit from each other.

The low in terms of SALES PACE/VOLUME was Q12009
The low in terms of Price Action reflecting the damage done was spread between Q2+Q3 2009

So, expect the next two quarterly reports to start to show the y-o-y price improvement that I have been discussing for the past 4-5 months on http://www.urbandigs.com as I have seen it in the field of Manhattan real estate.

"I agree, except there's NO mix of 14, 12,25 and 36 which comes out as 11" This misses the point on mix. Even if two and three bedroom prices are down big (25%, 36%), if there are more of them in the mix it will introduce an upward (or in this case less downward) bias in the median.

In a highly simpified example, if in year 1 you have a market of two studios, two 1BRs, two 2BRs and two 3BR, the median price is the average of the higher priced 1BR and the lower priced 2BR. Now assume that prices fall 14-36% in year 2 (as in today's report), but the mix is now one studio, two 1BRs, three 2BRs and two 3BRs. The median is now the average of the two lowest priced 2BRs, which even with a 24% decline from year 1 2BR prices is likely to increase the median. Obviously reality is much more complicated, but the example illustrates how a mix shift toward larger units could result in the marker median being down 11% while each segment is down more than that.

Uhh, No - Noah,

To quote your blog from Dec. 27, 2009. "All the good products traded already or are pending closing. So get ready for a few bullish year-over-year reports as the reflation months from the Feb/March lows get caught over the next few quarters!"

Isn't 2010Q1 a "next" quarter!? I wouldn't call this report "bullish" unless you forget the lines of John Wooden, "Never mistake activity for achievement." Volume is up Y-O-Y, but prices are down Y-O-Y. So if volume goes up on the stock market, but prices go down, this is bullish???

I'm still a fan though I think you're doubling down on a bad bet by extending your predictions about improving Y-O-Y prices to Q2+Q3 2010...

sidelinesitter -- exactly right. The interesting/telling thing to see would be quarter over quarter data by apartment type.

sisphean - umm, do you miss the very quote you use: "next few quarters"

I said VERY CLEARLY on more than one occasion that I did not know WHICH report would catch the y-o-y price improvement! Very clearly. I never said it would be Q1 for sure and that was my prediction. The only thing I predicted for Q1 was a surge in closings on a y-o-y basis, which was proven accurate and I even went out on a limb and gave an estimate a month ago on where sales would come in, around 2400-2600 levels, and it came in at 2384.

http://www.urbandigs.com/2010/03/looking_forward_to_manhattan_q.html

"It is my belief that the next 1-3 quarterly reports will show this improvement first discussed right here on UrbanDigs.com. Timing which report snags it is difficult."

http://www.urbandigs.com/2010/03/here_comes_the_q1_2010_report.html

"What I am unsure of is which quarterly report will ultimately show the improvement in price action from the extreme trades at the height of fear in early 2009"

Even with your statement, I clearly said "next few quarters", but if you want to dissect that down to mean ONLY the next quarter and say I am wrong, go for it! Everyone else knows that I said multiple times very clearly that I do not know which report out of the next 2-3 reports will catch the improvement in y-o-y prices due to the lag that I so often discuss and break down so people know how off on timing these reports are!

The number of apartments for sale surged 17 percent from the
previous three months to 8,027 properties, the biggest jump from
the end of one year to the beginning of the next in at least a
decade, Miller said.
“I anticipate a lot more inventory growth this year than
we normally see because people are testing the waters again,”
Miller said.

bottom line is that there arent enough capable buyers to support the mrket long term at these prices. by long term I mean the next few months...after that the free fall continues becuase the few buyers that remained have been taken out.

any why are we even using these quarterly reports anymore as if they are the know all and only guide as to what is happening out there? How many times do we need to see such variations in the data across brokerage firms and how many times do we need to show how lagging these reports are.

People stick to these like they are god of Manhattan real estate. Amazing to me the trust people place in these. Oh the quarterly report says prices bottomed in Q2 2009, so it must mean if you bought a place in June 2009, you hit the exact bottom! In reality, its just not true.

If you dissect the quarterly reports, take a look at Q1 2009, you know that time when fear was extreme and the Dow as at 6,600 and S&P at 670 and blood was on the streets and bids for property were none existent. Its clear Q2 + Q3 of 2009 were the two reports that caught the bottom trades:

http://media.halstead.com/pdf/Halstead_QuarterlyReport_1Q10.pdf

Page 2/8 shows it clearly here. When in reality those trades were signed into contract Q1 2009 and maybe early Q2 2009; only to close 2-6 months later and get caught in the reports later on. You have to play the game by the rules no matter how OFF the rules may be!

I said today, its becoming very clear to me that the next 2 quarterly reports will show the y-o-y improvement I have been discussing. So if it comes, will you validate my writings or will you chalk it up to an improvement that didnt happen yet, but will over the next 3-6 months?

the reason avg/median sales prices in Q1 2009 were as high as there were, was because of the lagging nature of the reports. Q1 2009 reflected deals done 2-6 months PRIOR! Q2 + Q3 2009 more accurately captured the lows I have been discussing and therefore it will be Q2 + Q3 2010 that accurately shows you the y-o-y improvement I have been writing about. I feel like I have to explain this simple concept as if Im talking to a 2nd grader

Noah, Any chance we're seeing the effect of pre-bubble contracts closing now. Credit was not available for many of these units three and six months ago. Also did you catch the news that Fannie was close to or is loosening some of ridiculous restrictions on Condo lending in NYC

certainly not to the degree that we were seeing lagging new dev pre bubble contracts close say in 2008 and into early 2009. Sure there may be a bunch in there still yet to close that were signed long time ago, but the wave of these I think already did close. Nope, didnt catch the news. Link?

Not the best news sources.. but considering how dumb some of the new rules are.
i.e. buildings have to commit 10% of each year's operating budget toward building reserve, I suspect they have to loosen.

http://blogs.wsj.com/developments/2010/03/31/freddie-mac-eases-rules-for-some-florida-condos/
http://www.businessinsider.com/fannie-maes-caving-on-condos-has-officially-begun-nyc-condo-salvation-coming-soon-2010-3

I now judge real estate by "Selling New York," and they remain 0 for 1000: in all of these episodes they've only managed to "sell" two apartment: both to other realtors at a significant discount from asking.

This week they claimed the $1.5 millionish discount was because it was an "all-cash" deal. WTF? Why would anyone care where you get the "cash" from, especially if it's a condo?

How's about the discount was because the original price was VASTLY too high.

did anybody catch the header?

"Manhattan apartment sales doubled in the first quarter as bargain-hunting buyers scooped up co-ops and condos in a market where resale prices have fallen an average 29 percent since their peak. "

It's all relative, if it previously sold for 2.2 and accepted 1.7 it's a bargain.

here they are all in a row (I think)...

1Q, 2010 868,000
4Q, 2009 810,000
3Q, 2009 850,000
2Q, 2009 835,700
1Q, 2009 975,000
4Q, 2008 900,000
3Q, 2008 928,263
2Q, 2008 1,025,000

the idea that they're back to old levels... only if Q3 2009 is your idea of "old". ;-)

When you stand back from the reports and the city you have to marvel at the relative recovery. I would have bet hard earned money that the malaise would have lasted much longer.
Do you know how many times I've read...'Buy now or be priced out forever'?
I thought that was one of our little jokes.
Damn it!

What I find most interesting is the lack of attention to sustainability. Where will the buyers come from for this quarter and next? Once this activity dries up, then what ? We know the jobs aren't there . Please bulls... From where next will the buying come????

Where did all the jobs come from in todays job report?

45,000 census workers
seasonal construction
Small business

Not exactly a stellar recovery but, looking up, if only by degree.

"What I find most interesting is the lack of attention to sustainability."

and earlier

"bottom line is that there arent enough capable buyers to support the mrket long term at these prices. by long term I mean the next few months...after that the free fall continues becuase the few buyers that remained have been taken out."

1,000 signed contracts and 800 closings a month don't provide a lot of support for this theory, esp. since this pace has been going on since about June last year. Without some actual data about depth of the buyer pool, the argument is just FUD (http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt)

You are saying 800 closings in a city of millions demonstrated that its sustainable?

No, I'm saying that marco has nothing other than speculation to say that it isn't sustainable. What we can say, because there is data for this - now there's a radical concept on the SE boards - is that the pace has been sustained now for something like 10 months. Don't ask me to make sense of it, because I can't. I'm pretty much with falcogold a few posts above that I would have bet money that the downturn would have been longer and deeper. In fact, since I'm a potential trade-up buyer, you could say that I did bet a lot of money on a bigger downturn because I didn't pull the trigger and don't plan to at anything like current prices.

Anyway, this "next month all the buyers will be gone" stuff has been going on since last summer and I'm just pointing out that so far next month hasn't come. Basically this guy has been standing on the SE discussion board sidewalk: http://politicalhumor.about.com/od/economy/ig/Economic-Cartoons/The-End-Is-Near.-j5B.htm.

on average, Manhattan sees about 8500-9500 transactions a year or so. 2007 was euphoria of 13,000 or so. 2009 will be the overshoot to downside on sales volume year, likely less than 7000

Well the one thing that cannot be argued is that prices are declining.

http://www.nytimes.com/2010/04/02/nyregion/02real.html?ref=realestate
What is flat growth?

“We’re going to see flat growth of prices through the year, if not a little longer,” said Diane M. Ramirez, the president of Halstead Property. “We’re not going to have any kind of ‘V’ recovery.”

The apartments that sold best were far from the sprawling Park Avenue co-ops and glassy luxury condominiums that grace real estate ads and appear in movies and on television. Sixty percent of the apartments that closed in the first quarter cost less than $1 million, according to data tracked by the Corcoran Group. While brokers might point to spending by the very wealthy, it is the buyers of lower-priced apartments who are driving the market, said Pamela Liebman, the chief executive officer of the Corcoran Group.

“That one-bedroom market is just really, really busy right now,” Ms. Liebman said. “People are taking advantage of the low interest rate, the low price.” In 2007 and 2008, two-bedrooms were the hot commodity.

The borough’s wealthiest residents were far less active in the market than they were two years ago. Wall Street bankers and hedge-fund executives might have earned record bonuses last year, but fewer apartments that cost more than $10 million are being sold. In the first quarter of 2008, 71 apartments sold for more than $10 million, compared with 9 in the same time in 2009, according to Gregory J. Heym, an economist who prepared the reports for Halstead and Brown Harris Stevens.

Continuing un / underemployment is a fact not speculation. Significant non cash comp paid on wall street is a fact. A rental market that continues to offer incentives while even more supply is coming is a fact. Another weak recruiting season for banks and law firms is a fact . We'll see what happens.

What continues to amaze me are buildings which I don't think rate as highly as others near them, asking the same prices. I do not think the market delineates good from bad product sufficiently.

It's people fishing. Re market is opaque that it behoove sellers to put out high offers.. Maybe they catch a sucker. This is why I think new construction pricing is a great index. These guys have to sell

Perhaps. Just compare Heritage vs Avery. It's ridiculous.