Spring Market Roars In but Tiptoes Out Early

yeah, I keep asking for a mkt temp.... none given... I wonderz whyz?

Steve, since when did you ever look to quotes from real estate brokers and puff pieces in the Times for any kind of insight into the market??

come on, you are better than that....

It's from the business section, not the real estate section.

Big difference (usually). And it does clearly state "Although many brokers [...] some economists and real estate experts...."

Following an extremely strong April, signings down a whole 4% in May. Oh the horror.

Inventory is awfully high for mid- june

Real estate for sale
in Manhattan
We found 9,103 listings
Median price: $965,000 Median size: 1,071 ft² Median price per ft²: $1,037

yep, seems odd that after one of the busiest 6-8 months in history, inventory didn't decline at all.

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

p09, very odd. I'd be interested in hearing how delistings and relistings compare. UD are you back from europe?

spells renewed s-o-f-t-n-e-s-s in pricing going forward.

Median prices are down considerably, too.

RAW unfiltered ACRIS "rolling sales" data by Month for Manhattan
w/ Year over Year Change from 2009

Month Sales Y-o-Y
Jan-08 1957
Feb-08 1925
Mar-08 1931
Apr-08 1958
May-08 2000
Jun-08 2825
Jul-08 2132
Aug-08 2117
Sep-08 2264
Oct-08 2464
Nov-08 1433
Dec-08 1616
Jan-09 1100 -43.8%
Feb-09 1126 -41.5%
Mar-09 1114 -42.3%
Apr-09 1249 -36.2%
May-09 1313 -34.4%
Jun-09 1822 -35.5%
Jul-09 1658 -22.2%
Aug-09 2079 -1.8%
Sep-09 1731 -23.5%
Oct-09 1895 -23.1%
Nov-09 1651 15.2%
Dec-09 2163 33.8%
Jan-10 1483 34.8%
Feb-10 1518 34.8%
Mar-10 1598 43.4%
Apr-10 1450 16.1%

We're coming off a nice bounce in the number of Year over Year sales.
(Note, increased VOLUME does note necesarily mean price increases, although lack of volume can certainly contribute to a decline in prices.)

It's clear the tax credit helped the low end of the market (that and the availability of conforming mortgages.) The Spring bounce came late last year (2009) and early this year. I will be shocked if the positive Y-o-Y number of sales lasts past June of this year.

Given that the tax credit helped, and has ended for contracts as of April 30th, and will end for closings on June 30th, its possible that the number of closings MIGHT meet or exceed the 1822 closings in June 2009, after that, I will bet dollars to donuts that Y-o-Y sales go back into negative percentages.

Given that the number of contracts signed (according to UD) slipped below 1000 per month in late May or early June, it seems rather UNLIKELY to me that we will exceed the 2079 ACRIS closings in August 2009 in August 2010...

stevejhx "Median prices are down considerably, too."

steve,

I'm leery of the use of median prices as an indicator. The tax credit and the availability of conforming mortgages have skewed the market toward the sale of more lower-end Manhattan RE in the last year relative to high-end homes which would mathematically drive down median prices.
See:
http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1168397931yhNzR&Record=10

Once the tax credit sales end on June 30th (albeit conforming mortgages will not change although I've heard that more sales consist of people putting up larger downpayments in order to get the balance into conforming territory) it wouldn't surprise me if the median prices start going back up as there will be fewer low-end homes in the mix.

While in reality, I would bet that actual prices will continue downward - while median prices go up.

As for the original Times article cited at the start of this thread, they cite the following foreclosure stats.

"(The rate in Manhattan in May was 1 in every 12,514 housing units, versus 1 in every 387 nationally, according to RealtyTrac, a company that compiles foreclosure records.)"

This makes Manhattan look good relatively speaking (and we ARE in MUCH better shape than Nevada.) That said, my impression is that higher-end properties, much more prevalent in Manhattan than the rest of the country, are more likely to go into short sales than foreclosure. I'd still bet we are much lower than the rest of the country on short sales, but it would probably be worse than the 12514/387 ratio cited for foreclosures.

(As for foreclosures, Manhattan also peaked later and it takes longer for foreclosures to go through in NY, so we'll probably gain a bit on the rest of the country across time.)

I'm not a fan of median prices either - but these are median prices for listings, not for sales. So I'm not sure how your argument fits in.

The state now requires public disclosure of a pre-foreclosure notice.

Obviously it takes forever to foreclose here. I read something today, will try to find it, that said that lenders now must register their notices to homeowners. In new York state 57000 notices went out the first quarter, with more than half in NYC and long island. unfortunately they didn't break it down further but this is public record now supposedly and I'm going to try and find it.

stevejhx,

"I'm not a fan of median prices either - but these are median prices for listings, not for sales. So I'm not sure how your argument fits in."

True. I'm just trying to point out the perils of median prices.

Its possible listing median numbers could go down (rather than up like sales median numbers) as more low-end inventory accumulates after the end of the tax credit.

I totally agree about the median. but something in me just would like to rub it in the industry's face after their using numbers inflated by new development for so many years.

Rub their noses in their own poop I say.

Yo ar

isn't it almost imopssible to have a foreclosure in a co-op? i thought that even if it gets to that point the board/bank/whoever does everything they can to prevent it, for this reason foreclosure figures are not a good indication of manhattan RE climate

glamma -- doesn't the bank do whatever it can to work with the board because they have the right to reject any buyer bank comes up with? Certainly the board's right to refuse buyers is not rescinded in the case of foreclosure. therefore, would it ever appear as a foreclosure rather than a short sale?

Actually, when foreclosures happen in NYC Co-ops, it is often the Co-op itself that initiates the foreclosure as the Co-op typically holds the first lien on the shares.

My impression is that those who default on mortgages generally default on Co-op maintenance charges first.

Co-ops probably do have a lower foreclosure rate than other RE as most have maintained much more stringent financial requirements. Back when banks were letting folks with no proven income make downpayments of 3.5% on property - often as investment properties - many Co-ops still required proof of income and 20% downpayment to become an owner-occupant (not investor.)

Clarification:

My impression is that those who default on mortgages generally default on Co-op maintenance charges first. So it's the Co-op that is holding the bag for the maintenance charges and they have the highest priority lien. If the bank forecloses, they have to pay the legal fees but proceeds from sale go to pay off the Co-op first.

For that matter, some (older) Co-op owners have paid off their mortgage but can still default on maintenance, so the Co-ops are sometimes the only lien holder.

sisph: since the coop has a vested interest in having the apt sold, and the bank or mortgage holder is beholden to the good graces of the board to accept a buyer, do these distressed situations ever result in an actual foreclosure? it seems that in worst case, it would be a short sale. so situations that might be a foreclosure in normal circumstances would never be listed as such in manhattan co ops. would it? even with 20% down circumstances of job loss, etc can lead to foreclosure. Just less likely in co op for these reasons, no?

The number of signed contracts for apartments in Manhattan jumped nearly 35 percent from February to March, to a total of 1,000 contracts, far more than had been typical in the previous two years, according to data provided by Streeteasy.com. In April there was an increase, to 1,063 contracts, but the number slipped slightly in May, to 1,016.

hahaha 1,063 to 1,016 so funny. Anything to drum up a non-event. What the truth says is market is back to normal. Which is great. Just wonderful seeing J Miller rhetoric, trying to get his joint venture flop going.

Jon Miller is a hypocritical flop.

I saw similar higher activity earlier in the year, and recently a bit less.