Price increases since last year on uws

Re: listing discount, the median was -3.5% for the last 130-odd co-ops to close in Lincoln Square, where SE had a sale-to-listing match.

NWT: Of course, there's a significant sampling issue there: your figures reflect apartments that actually sold; bmf's population is inflated by apartments that won't sell because they are massively overpriced.

Let me translate what West81st is saying, bmf. In any given month, only something in the range of 1 in 15 apartments transact. You are comparing the 15 from this year against the 1 from last year. Try comparing things that sold recently, or else just the best-priced few, minus 5%. That is the market.

inonada, im a little confused...take the recent ones sold and deduct 5 %? that will give me a idea of what the "true market value " is? as oppose dto lloking at what sold a year ago and adding a percentage?

Nope, I'm saying that you should take the best-priced ones (the 1 in 15's) and deduct 5% or so as that is the typical difference between last asking price and sales price. The remaining 14 are at prices that are too high to induce transactions (what West81st is calling "massively overpriced").

The best thing is to look at recent ones that sold, of course. Or your proxy -- last year plus 5% per SE's CMI -- is also a good barometer of where the market is today. The point is that in 2009, for each of those places were selling for $1.7M, there were a dozen asking $1.8M to $2.4M or whatever. A RE market mostly consists of inventory that no one was willing to buy for the price being asked. What makes it different from, say, the stock market is that the other side of the market (bids from buyers that no seller is willing to sell at) isn't published.

inonada: You might be building in the same discount twice. You're right that the "best-priced" properties are most likely to sell, but among the listings that sell, they are also likely to need the smallest discount off final ask. A significant portion (by definition, those that were priced best of all) will sell above ask.

bmf, you're seeing an increase in list prices due to three factors:

1) seasonal. You're looking at a market segment which is typically families with kids, who buy in the spring to move in the summer. If you're comparing 3Q closings to 3Q list prices, you're really comparing last summer's contract prices (a slower time) to sellers' expectations of what will move in the spring (a hotter time)

2) the factor that you mentioned, listing discount. Jon Miller, who runs all the data for Elliman, showed a Manhattan-wide compression in listing discount from 2Qs 9.1% to 3Qs 5.8%. Absent all other data, that shows a trending recovery, and is going to create seller optimism.

3) rising rents. Sellers are going to be aggressive when they think buyers don't have any alternatives.

Will the jump in list prices be reflected in a jump in closed prices? Only way to know is to make offers and see what market feedback you get, and go from there.

ali r.
DG Neary Realty

"inonada: You might be building in the same discount twice. You're right that the "best-priced" properties are most likely to sell, but among the listings that sell, they are also likely to need the smallest discount off final ask. A significant portion (by definition, those that were priced best of all) will sell above ask."

I think you may be right. The best 7% of the market, say, may be priced "right" but does not necessarily sell in any given month. My argument would be correct if that's all that sold, but it probably is not.

Here's an interesting data point. The main SE page shows average ppsf asking for 2BR at $1200 as of today. I don't know if SE provides historical data for this, but the following thread recorded a value of $1214 as of Feb 2010:

http://streeteasy.com/nyc/talk/discussion/18513-jan-2011-predictions

City-wide, the data seems to indicate that asking prices haven't really moved much despite what you might be perceiving. Perhaps one can argue that there's some seasonal difference between Feb and Nov in asking prices, but I'd guess it's mainly about biases in perception.