Q4 2010 Miller Samuel Data

Average sales price:

Year Quarter Studio 1 Bedroom 2 Bedroom 3 Bedroom 4+ Bedroom All
2010 4 385,815 635,579 1,462,725 3,046,295 8,047,255 1,482,650
2010 3 407,703 641,431 1,407,530 3,060,502 7,216,188 1,487,472
2010 2 416,722 671,950 1,352,748 2,942,987 6,108,760 1,432,712
2010 1 406,527 696,496 1,385,839 2,997,041 6,318,709 1,426,994
2009 4 414,525 706,120 1,410,018 2,948,199 6,258,396 1,296,157
2009 3 403,955 683,809 1,301,969 2,435,692 6,176,328 1,323,462
2009 2 456,884 690,353 1,371,397 2,709,007 5,339,636 1,312,920
2009 1 476,915 805,890 2,179,093 4,544,871 9,631,295 1,825,847
2008 4 441,583 768,262 1,905,718 4,690,007 10,356,347 1,485,102
2008 3 471,035 768,826 1,794,430 4,344,220 14,252,481 1,480,363
2008 2 513,404 870,692 2,008,306 4,570,279 9,488,361 1,669,729
2008 1 561,804 848,077 2,023,264 5,181,996 14,295,551 1,722,991
2007 4 455,181 785,973 1,898,784 5,076,798 7,645,603 1,439,909
2007 3 443,059 747,014 1,662,750 4,421,069 8,532,524 1,369,486
2007 2 442,893 741,267 1,630,421 4,187,753 9,175,255 1,333,316
2007 1 455,571 687,078 1,521,042 3,592,638 8,957,570 1,290,391
2006 4 441,028 694,926 1,554,645 3,630,938 7,591,794 1,224,840
2006 3 466,829 705,036 1,588,763 3,750,527 7,330,000 1,288,748
2006 2 451,384 724,477 1,658,968 3,562,418 6,737,751 1,386,193
2006 1 423,659 700,201 1,491,060 3,295,963 7,175,170 1,300,928
2005 4 406,920 694,601 1,559,760 2,794,952 6,746,931 1,187,404
2005 3 428,831 687,744 1,486,962 3,233,727 6,823,346 1,149,813
2005 2 380,073 626,188 1,539,260 3,551,641 10,639,792 1,317,528
2005 1 337,396 592,945 1,409,539 3,792,282 6,662,761 1,214,379
2004 4 329,971 546,841 1,199,961 3,078,856 5,862,906 987,257
2004 3 317,271 538,872 1,300,062 3,084,826 6,745,007 1,044,166
2004 2 321,417 521,879 1,276,222 2,671,626 4,998,910 1,009,998
2004 1 256,933 470,718 1,197,063 2,579,499 5,731,306 966,292
2003 4 298,124 466,013 1,112,813 2,465,255 5,044,054 887,734
2003 3 300,010 463,224 1,044,842 2,468,286 5,698,266 896,407
2003 2 249,061 422,865 1,015,861 2,480,192 4,928,348 836,773
2003 1 277,347 450,452 942,216 2,587,977 5,032,366 756,669
2002 4 252,031 442,248 1,004,096 2,478,438 5,368,477 783,773
2002 3 254,792 403,638 972,972 2,507,273 5,299,134 818,789
2002 2 259,802 411,867 937,509 2,586,899 4,104,811 805,679
2002 1 243,380 420,903 919,608 2,397,066 3,458,972 766,900
2001 4 269,961 399,794 913,071 2,784,180 5,200,764 738,766
2001 3 295,985 375,149 901,086 2,317,876 5,452,589 743,302
2001 2 313,365 410,924 979,988 2,454,196 6,192,154 780,844
2001 1 353,360 377,793 962,189 2,677,748 5,485,598 849,701
2000 4 243,860 348,270 823,171 2,396,835 6,007,590 688,087
2000 3 274,256 343,810 889,295 2,516,862 6,371,511 716,215
2000 2 231,566 344,227 918,431 2,387,415 6,117,607 766,131
2000 1 194,157 316,310 823,151 2,442,000 4,494,772 672,481
1999 4 176,989 290,049 741,339 1,924,691 3,410,988 553,808
1999 3 212,745 280,777 718,811 1,698,977 4,636,780 571,623
1999 2 170,498 290,164 727,313 1,680,663 4,005,960 568,454
1999 1 156,862 256,701 628,161 1,703,858 3,810,486 492,401
1998 4 135,113 248,758 606,337 1,335,824 4,957,623 470,454
1998 3 133,035 244,347 624,920 1,551,530 3,534,971 470,131
1998 2 134,351 231,653 577,821 1,562,299 3,098,041 473,906
1998 1 129,288 219,394 566,918 1,390,557 3,008,023 454,308
1997 4 126,453 216,108 510,007 1,547,071 3,501,639 426,671
1997 3 128,819 206,745 526,704 1,457,149 2,530,801 417,516
1997 2 127,900 204,600 502,298 1,279,220 3,111,581 456,162
1997 1 139,310 211,080 459,440 1,125,190 2,683,831 392,393
1996 4 126,296 185,446 426,928 1,037,888 2,628,827 359,013
1996 3 121,092 186,373 437,442 1,026,821 2,362,033 381,035
1996 2 124,287 195,519 442,372 1,095,294 1,972,912 395,207
1996 1 125,324 189,959 426,814 1,085,646 2,182,911 392,944
1995 4 115,162 189,005 390,529 1,163,261 2,148,826 350,078
1995 3 129,796 191,905 426,350 1,053,422 2,060,883 367,504
1995 2 119,495 196,022 418,149 974,871 2,153,135 365,506
1995 1 114,492 189,607 409,881 1,044,344 2,130,409 359,908
1994 4 135,710 191,374 423,563 1,092,357 2,932,222 402,090
1994 3 141,040 198,068 464,089 1,063,835 2,243,914 409,446
1994 2 150,678 195,181 418,786 938,405 2,540,321 421,917
1994 1 139,881 187,662 410,139 938,319 2,387,764 377,746
1993 4 136,107 199,261 417,947 1,018,447 2,165,444 375,732
1993 3 144,128 188,349 428,042 920,905 2,269,864 385,898
1993 2 139,265 194,170 410,119 1,050,274 2,177,050 397,312
1993 1 132,461 193,268 381,126 1,020,218 1,725,709 376,194
1992 4 134,645 181,099 396,806 899,467 1,723,025 383,188
1992 3 118,686 171,726 388,512 888,889 2,049,289 389,717
1992 2 127,166 178,939 406,230 990,796 1,811,705 431,203
1992 1 121,456 186,461 383,727 987,170 1,826,769 380,683
1991 4 119,363 188,221 406,419 900,095 2,360,302 418,648
1991 3 127,041 188,847 393,954 906,202 1,787,461 394,543
1991 2 135,149 204,833 395,066 1,006,981 1,685,835 406,435
1991 1 113,322 188,277 408,301 919,862 1,807,856 375,876
1990 4 133,774 186,017 449,523 874,454 2,960,212 378,703
1990 3 128,274 199,739 419,139 922,799 1,975,550 365,664
1990 2 140,499 206,224 483,335 1,117,923 2,391,405 403,521
1990 1 127,448 213,516 507,940 1,296,889 2,594,683 434,140
1989 4 127,911 210,216 524,910 1,144,732 2,966,162 429,242
1989 3 132,474 200,460 467,517 1,110,370 2,417,667 356,832
1989 2 153,738 218,603 501,759 1,363,276 2,713,873 472,453
1989 1 150,258 216,899 428,448 1,094,563 2,621,068 371,099

Median sales price:p

Year Quarter Studio 1 Bedroom 2 Bedroom 3 Bedroom 4+ Bedroom All
2010 4 375,180 615,000 1,225,000 2,600,000 5,400,000 845,000
2010 3 375,000 610,000 1,250,000 2,700,000 6,000,000 914,000
2010 2 410,000 639,000 1,248,000 2,600,000 4,650,000 899,000
2010 1 375,000 627,500 1,206,584 2,400,000 5,650,000 868,000
2009 4 375,000 661,000 1,242,265 2,350,000 5,400,000 810,000
2009 3 399,000 645,000 1,175,000 2,250,000 5,181,110 850,000
2009 2 405,000 650,000 1,267,000 2,346,050 3,920,000 835,700
2009 1 437,500 710,000 1,605,000 3,750,000 7,889,000 975,000
2008 4 420,000 715,000 1,620,000 4,050,000 8,750,000 900,000
2008 3 425,000 727,000 1,520,000 3,792,940 10,225,000 928,263
2008 2 480,000 778,961 1,650,000 3,700,000 7,350,000 1,025,000
2008 1 499,000 795,000 1,614,000 3,850,000 12,000,000 945,276
2007 4 459,000 749,000 1,485,000 4,325,000 5,400,000 850,000
2007 3 390,000 689,000 1,375,000 3,650,000 6,567,712 864,397
2007 2 429,936 700,000 1,400,000 3,600,000 6,600,000 895,000
2007 1 390,000 635,000 1,312,550 3,138,451 6,450,000 835,000
2006 4 410,000 649,000 1,305,000 2,987,500 6,250,000 799,000
2006 3 400,250 655,000 1,395,000 3,200,000 4,900,000 845,147
2006 2 420,000 660,000 1,395,000 3,300,000 5,750,000 880,000
2006 1 399,000 650,000 1,350,000 3,175,000 5,800,000 825,000
2005 4 380,000 650,000 1,330,000 2,700,000 4,700,000 760,000
2005 3 400,000 649,000 1,295,000 3,000,000 5,995,000 750,000
2005 2 369,000 595,000 1,280,000 3,055,000 7,800,000 775,000
2005 1 316,000 557,500 1,200,000 3,200,000 5,050,000 705,000
2004 4 310,000 525,000 980,000 2,450,000 5,725,000 605,000
2004 3 305,000 500,000 1,010,000 2,500,000 6,000,000 600,000
2004 2 285,000 470,000 970,000 2,250,000 4,300,000 625,000
2004 1 250,000 433,000 975,000 2,150,000 4,650,000 595,000
2003 4 250,000 425,000 900,000 1,900,000 3,650,000 500,000
2003 3 246,000 420,000 840,000 2,000,000 3,600,000 530,000
2003 2 236,500 405,000 860,000 2,500,000 5,075,000 475,000
2003 1 245,000 405,000 815,000 2,365,000 5,200,000 443,000
2002 4 245,000 400,000 839,000 2,140,000 4,400,000 450,000
2002 3 239,000 387,000 825,000 2,100,000 3,800,000 470,000
2002 2 220,000 375,000 770,000 1,925,000 3,550,000 450,000
2002 1 210,000 365,000 750,000 1,935,000 3,400,000 425,000
2001 4 218,000 359,000 745,000 1,950,000 3,450,000 420,000
2001 3 212,000 352,500 740,000 2,100,000 3,850,000 423,000
2001 2 210,000 365,000 737,500 2,000,000 4,175,000 430,000
2001 1 201,000 356,000 775,000 1,950,000 4,000,000 450,000
2000 4 195,000 340,000 750,000 2,138,500 3,768,000 445,000
2000 3 185,000 330,000 750,000 2,195,000 5,150,000 400,000
2000 2 160,000 312,000 720,000 1,850,000 3,950,000 399,000
2000 1 147,000 285,000 630,000 1,900,000 3,325,000 350,000
1999 4 140,000 270,000 615,000 1,500,000 3,400,000 320,000
1999 3 137,500 260,000 590,000 1,595,000 3,350,000 310,000
1999 2 130,000 250,000 580,000 1,400,000 3,100,000 325,000
1999 1 125,000 225,000 535,000 1,400,000 3,375,000 267,000
1998 4 122,000 230,000 525,000 1,265,000 2,249,500 265,000
1998 3 120,000 225,000 539,000 1,250,000 3,100,000 275,000
1998 2 120,000 221,000 525,000 1,207,000 2,495,000 275,000
1998 1 110,000 200,000 475,000 1,175,000 2,800,000 245,000
1997 4 105,000 190,000 437,500 1,200,000 2,900,000 225,000
1997 3 95,000 180,000 418,000 1,200,000 1,800,000 230,000
1997 2 93,000 179,500 418,500 1,250,000 2,250,000 255,000
1997 1 92,000 179,000 408,000 1,040,000 2,250,000 245,000
1996 4 83,000 157,500 365,000 960,000 2,200,000 200,000
1996 3 80,000 160,000 373,000 874,000 1,900,000 220,000
1996 2 80,000 154,000 365,000 910,000 1,900,000 220,000
1996 1 79,000 155,000 330,000 987,500 2,100,000 218,000
1995 4 81,000 154,000 335,000 975,000 1,750,000 200,000
1995 3 76,750 152,500 335,000 820,000 1,950,000 201,000
1995 2 75,000 154,000 340,000 815,000 1,725,000 217,500
1995 1 75,000 150,000 330,000 920,000 1,800,000 208,000
1994 4 75,000 157,500 350,000 910,000 1,780,000 227,500
1994 3 80,000 160,000 385,000 900,000 1,900,000 252,500
1994 2 76,000 160,000 357,000 857,000 1,925,000 250,000
1994 1 77,500 155,000 340,000 845,000 2,100,000 230,000
1993 4 82,000 155,000 340,000 835,000 2,100,000 220,000
1993 3 85,000 157,000 340,000 750,000 1,675,000 244,500
1993 2 80,000 154,000 335,000 817,500 1,761,125 245,000
1993 1 80,000 150,000 320,000 800,000 1,670,000 215,000
1992 4 75,000 150,000 325,000 783,000 1,400,000 225,000
1992 3 79,500 155,000 332,500 839,200 1,450,000 240,000
1992 2 76,000 155,000 350,000 800,000 1,525,000 240,000
1992 1 85,000 165,000 325,000 945,000 1,450,000 215,000
1991 4 81,500 165,000 335,000 830,000 1,900,000 235,000
1991 3 95,000 166,000 335,000 825,000 1,450,000 240,000
1991 2 95,000 170,000 350,000 832,500 1,400,000 260,000
1991 1 85,000 170,000 345,000 775,000 1,650,000 220,000
1990 4 100,000 167,500 390,000 830,000 1,750,000 220,000
1990 3 101,000 181,000 363,000 882,500 1,700,000 225,000
1990 2 110,000 185,000 405,000 999,000 1,700,000 245,000
1990 1 107,500 190,000 425,000 1,210,000 1,900,000 252,500
1989 4 104,000 192,000 428,000 910,000 2,400,000 232,500
1989 3 108,000 193,000 410,000 1,128,000 1,850,000 228,500
1989 2 118,350 196,000 420,000 1,300,000 2,000,000 255,000
1989 1 119,000 202,140 389,500 980,000 2,800,000 240,000

Number of sales:

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Year Quarter Studio 1 Bedroom 2 Bedroom 3 Bedroom 4+ Bedroom All
2010 4 294 782 847 288 84 2,295
2010 3 237 947 1,025 349 103 2,661
2010 2 323 959 894 500 80 2,756
2010 1 290 837 839 279 103 2,348
2009 4 442 987 612 375 57 2,473
2009 3 385 756 676 308 105 2,230
2009 2 255 572 448 185 72 1,532
2009 1 185 413 480 81 36 1,195
2008 4 380 825 950 95 32 2,282
2008 3 479 967 1,045 125 38 2,654
2008 2 569 1,024 1,239 181 68 3,081
2008 1 475 771 905 76 55 2,282
2007 4 592 795 978 115 38 2,518
2007 3 486 1,323 1,469 180 41 3,499
2007 2 664 1,299 1,738 205 33 3,939
2007 1 544 1,174 1,538 161 57 3,474
2006 4 414 878 1,016 99 34 2,441
2006 3 308 752 927 97 29 2,113
2006 2 268 695 822 98 51 1,934
2006 1 282 706 866 98 53 2,005
2005 4 283 577 613 72 29 1,574
2005 3 348 752 781 90 26 1,997
2005 2 331 758 921 136 35 2,181
2005 1 299 709 864 110 46 2,028
2004 4 331 756 950 92 32 2,161
2004 3 455 853 939 141 41 2,429
2004 2 312 760 932 100 43 2,147
2004 1 297 647 832 104 36 1,916
2003 4 288 881 1,007 102 37 2,315
2003 3 372 780 1,092 115 47 2,406
2003 2 305 741 961 99 38 2,144
2003 1 319 717 803 80 18 1,937
2002 4 365 744 895 94 20 2,118
2002 3 412 728 1,059 135 32 2,366
2002 2 425 933 1,276 168 40 2,842
2002 1 255 790 1,000 108 29 2,182
2001 4 378 835 826 87 31 2,157
2001 3 341 715 822 77 35 1,990
2001 2 339 645 839 76 19 1,918
2001 1 381 679 920 108 45 2,133
2000 4 385 774 958 88 29 2,234
2000 3 412 781 859 89 29 2,170
2000 2 392 859 965 107 47 2,370
2000 1 406 885 963 113 43 2,410
1999 4 394 837 843 104 24 2,202
1999 3 441 997 937 113 45 2,533
1999 2 324 965 981 106 36 2,412
1999 1 342 690 690 64 32 1,818
1998 4 360 714 665 78 27 1,844
1998 3 373 874 805 90 33 2,175
1998 2 394 897 941 117 48 2,397
1998 1 292 733 712 96 38 1,871
1997 4 307 856 707 89 37 1,996
1997 3 283 869 826 105 31 2,114
1997 2 190 660 759 93 44 1,746
1997 1 193 587 702 82 21 1,585
1996 4 211 733 734 86 30 1,794
1996 3 177 745 824 95 42 1,883
1996 2 132 457 569 80 28 1,266
1996 1 140 594 686 99 37 1,556
1995 4 162 584 631 78 24 1,479
1995 3 133 507 560 76 21 1,297
1995 2 118 517 603 66 25 1,329
1995 1 133 583 710 84 22 1,532
1994 4 90 391 518 72 18 1,089
1994 3 111 575 670 80 34 1,470
1994 2 108 457 631 93 41 1,330
1994 1 114 440 580 78 24 1,236
1993 4 107 389 496 64 18 1,074
1993 3 117 399 585 52 29 1,182
1993 2 82 325 413 60 24 904
1993 1 88 324 428 55 32 927
1992 4 69 362 488 79 32 1,030
1992 3 80 346 477 76 36 1,015
1992 2 75 366 526 96 54 1,117
1992 1 85 355 450 50 41 981
1991 4 73 407 482 79 43 1,084
1991 3 100 429 562 92 49 1,232
1991 2 102 363 504 88 42 1,099
1991 1 80 316 390 48 29 863
1990 4 98 289 325 31 16 759
1990 3 148 365 384 54 28 979
1990 2 166 389 382 73 19 1,029
1990 1 171 416 433 55 30 1,105
1989 4 138 369 367 44 22 940
1989 3 135 346 343 37 9 870
1989 2 223 469 522 78 47 1,339
1989 1 221 528 491 54 28 1,322

Kudos to JM for making all this data available, and putting it up so quickly so that is SEers may have a proper head-bashing with all the data.

Unfortunately, data has never gotten in the way of the meaningless back & forth between the bulls & bears on this site - I don't expect that to change, but applaud your efforts to try.

And Miller Samuel's comparable data for rents (all Manhattan, rent psf)

2010 3 47.82 49.34 45.05 37.62 42.48 47.22
2010 2 47.55 50.02 49.81 54.01 51.55 49.60
2010 1 51.61 46.89 46.63 53.76 56.42 46.91
2009 4 47.28 44.71 49.10 52.67 50.78 47.02
2009 3 50.52 46.62 46.66 47.94 60.94 47.84
2009 2 52.13 43.87 46.20 52.81 63.42 44.16
2009 1 49.98 47.04 51.64 54.44 60.16 48.41
2008 4 50.20 50.70 48.60 56.50 103.80 49.30
2008 3 52.40 53.20 50.70 61.20 96.50 52.80
2008 2 52.90 52.90 52.30 58.30 71.30 53.50
2008 1 53.20 51.90 50.20 59.80 95.40 52.02
2007 4 54.67 52.93 48.58 51.16 69.51 51.00
2007 3 52.40 52.10 49.60 49.90 58.90 50.00
2007 2 51.40 51.80 49.50 52.00 62.10 50.40
2007 1 50.70 47.50 50.40 55.10 78.80 50.90
2006 4 50.24
2006 3 50.36
2006 2 46.03
2006 1 45.43
2005 4 44.15
2005 3 42.23
2005 2 40.16
2005 1 40.47
2004 4 40.13
2004 3 38.75
2004 2 38.23
2004 1 37.51
2003 4 37.74
2003 3 37.16
2003 2 36.15
2003 1 37.29
2002 4 36.33
2002 3 37.57
2002 2 34.79
2002 1 37.15
2001 4 39.29
2001 3 40.74
2001 2 42.49
2001 1 44.91
2000 4 45.28
2000 3 44.44
2000 2 41.49
2000 1 40.11
1999 4 38.35
1999 3 36.95
1999 2 38.12
1999 1 36.73
1998 4 36.67
1998 3 35.60
1998 2 33.71
1998 1 33.95
1997 4 32.60
1997 3 33.42
1997 2 32.09
1997 1 30.80
1996 4 32.42
1996 3 30.95
1996 2 29.52
1996 1 30.05
1995 4 29.02
1995 3 25.93
1995 2 27.78
1995 1 27.67
1994 4 27.72
1994 3 26.02
1994 2 24.89
1994 1 26.85
1993 4 24.19
1993 3 22.59
1993 2 23.56
1993 1 25.25
1992 4 24.61
1992 3 23.14
1992 2 23.43
1992 1 23.44
1991 4 21.85

1990 4 100,000 167,500 390,000 830,000 1,750,000
1999 4 140,000 270,000 615,000 1,500,000 3,400,000
--------------------------------------------------
Up by: 40,000 102,500 225,000 670,000 1,650,000

2001 4 218,000 359,000 745,000 1,950,000 3,450,000
2010 4 375,180 615,000 1,225,000 2,600,000 5,400,000
----------------------------------------------------
Up by: 157,000 256,000 480,000 650,000 1,950,000

Why, that's not a bubble at all. I best buy now, or I will be priced out forever. I'm also going to get my broker's license and get ready to become filthy rich. The next decade is going to be AWESOME!

Notes: 1991-2006 number is the overall average. And by "comparable" I meant only that these are MS numbers. No doubt the quality of sale apartments is consistently higher than than of rentals.

Why did you choose 1990-1999 and not 1991-2000? My guess is you left out 2000 because the % increase from 1991 to 2000 was greater than 2001-2010.

You have to work on your table-constructing skills.

Wow, the overall median just dropped another 7.5%. And its down 17.6% off peak.

to be honest, I don't really think it "dropped" (look at the categories), this is just a correction to the shifting apartment mix (what allowed each size category to drop by 20% and the overall median to go down only 10-13% at the same time).

Meaning the drop was already there, it just wasn't apparent.

Bubble math:

In 1991:4 the average psf sale price was 12.9x the average psf rent price. By 1992:3, the market bottom after the late '80s boom, the ratio had dropped to 11.49. By 2000:4, rents had more than doubled, presumably reflecting some combination of inflation (about 26% per CPI), renovations and new construction leading to better housing stock and improved quality of life in the City. The ratio was then 11.9. Since then, rents dropped a bit and then climbed and as of 2010:3 are up about 20% -- much less than CPI inflation, which was about 27%.

The ratio, however, is now 23.19x. Prices would need to come down another 45-48% to bring that to the 1991-2000 levels.

To make a decent return on buy-and-hold rental property the 12-13 ratio is probably the maximum, even taking into account that the medians are not for similar apartments.

Paying 13x current rents means an investor expects to earn less than 8% gross. Take off 1% for RE taxes, 1% for common charges/maintenance, 2% for repairs/renovations and you are at 4% with no management costs and no vacancies/tenant problems, not much for a risky, burdensome and illiquid investment (and less than lenders demand for a less risky, less burdensome loan on the same property). So, buy-and-hold investors will not pay as much 13x rents unless they expect significant imminent rent increases, a better bet in 1991 than today.

Bubbles grow when demand becomes self-generating and exceeds supply; they end because supply eventually catches up. If the price:rent ratio is too high for investors to earn more than T-bill rates for managing rental properties, over time they will sell out to homeowners or flippers or anyone else who is willing to pay more than long term investment value. That increases supply until prices come down to investor levels or investor-owned-rentals run out, whichever comes first.

Equilibrium -- i.e., the long term value around which prices will fluctuate -- should be no higher than 8-10x rents of comparable apartments, or somewhat lower than 13x using the reported medians. Of course, it could be lower if investors (not homeowners or flippers) worry about liquidity or the possibility of capital losses, or rent decreases due to lower government services/QOL, or if rents are high enough to make building, renovation or conversion profitable. And on the way down, if homeowners and flippers start worrying about the possibility of losing money, prices could easily go well below equilibrium.

W67 may yet turn out to be a bull.

bubbles also grow and peak when easy credit is available to finance the speculative activity. Think margin debt for dot coms and easy loans for housing bust. Without available credit, its hard to have a bubble

yet credit IS still fairly readily available to the buyers of the smaller units, FHA, conforming expanded. and that market is showing some signs of serious hurt.

yes, but nowhere near the way it was say from late 2004 - early 2007

how many condos qualified for FHA financing in 2004-2007? what's the down payment requirements for FHA? 3.5%? you don't think that's keeping certain markets alive?

and prices are now 20-25% lower, interest rates have been ridiculously low, even compared to the ridiculously low levels of 2004-2007.

so credit isn't particularly tight, prices are lower, interest rates have been incredibly low, and yet the smaller unit market shows signs of giving up all gains from the previous propping of the market. seems like the signs of a healthy market to me.

Thanks for all the postings, inonada and financeguy.

financeguy:

You speak of

The ratio, however, is now 23.19x. Prices would need to come down another 45-48% to bring that to the 1991-2000 levels.

It's interesting to ponder what that "gross" price-to-rent ratio means in terms of "gross" yield. It comes to a "gross" yield of 4.3%. Now subtract those taxes, maintenance, insurance, and repair costs and you get a mighty skimpy "net" yield at today's prices. That "net" yield should grow with inflation over time so it is a bit analygous to "real net" yield. But it is certainly skimpy. But perhaps it's a bit related to the real yields we see today on TIPS. I'm seeing the 10-year TIPS trading at around a real yield today of 0.9%.

That said, TIPS real yields are likely to revert to more normal levels (2.5%?) over time. Seems to me any sort of return to more normal real interest rates would be quite negative for home prices - particularly Manhattan ones. I'd further note that Manhattan price-to-rent ratios are far higher than those in the rest of the country. The only potential justification would be an expectation that Manhattan rents would rise much more quickly than those of the rest of the country. Maybe. But I'm not convinced. Yes, Manhattan is an island. But you can always build higher (and zoning laws are being relaxed) and there are many parts of the island that remain way underdeveloped.

My best guess is that the "slow train wreck" will continue on for a good number of years - but not be particularly dramatic. Lots of false starts and stops but a general decline in "real" terms until price-to-rent ratios are normalized.

anyone want to share what they think the 3 most important/telling data points are from this to determine what shape the marlet is in, and or any trend

...for example..

1) yoy median sales price for 2 bedrooms
2) yoy ppsf studio
3) yoy number of sales

UrbanDigs- I appreciate your comments on how not to mistake changes in median/averages when thinking what to bid/ask for an apt. Would you recommend though if you are buying a 1 bedroom to look at how that individual market (1 bedroom) did yoy and qoq? If so, which metric seems to be most important: median, avg, ppsf, or sales? Thanks!

AR,
Happy New Year!
When you wrote: so credit isn't particularly tight, prices are lower, interest rates have been incredibly low, and yet the smaller unit market shows signs of giving up all gains from the previous propping of the market. seems like the signs of a healthy market to me.

Sarcasm....right?

happy new year to you too, Falco.

yes, sarcasm. there should be a sarcasm font.

"Would you recommend though if you are buying a 1 bedroom to look at how that individual market (1 bedroom) did yoy and qoq?"

First and foremost - bldg sales, comparable sales

Second - your submarket pending sales active trends, to be used on how aggressive you need to be considering current market conditions.

Third - general market trends, bar charts, overall pending in your price point, active trends, off market trends..

Hands down, in bldg comparable sales are the key...but if there is a market shift, its best to be following the market and submarket so you can tweak your approach accordingly. If we see a HUGE decline in pending for a period of 6 months or more...and then see a bottom forming, then chances are the market may have adjusted a bit and some trades will end up surprising people. On side note, if pending surges and active stays muted or declines, you will have competition out there and sellers will know NOT to hit your low bid with current demand levels

Bob: "Why did you choose 1990-1999 and not 1991-2000? My guess is you left out 2000 because the % increase from 1991 to 2000 was greater than 2001-2010." - Yes, the bubble inflated at a higher rate in the Roaring 90s. It then got pricked in 2008, so that's why you see the difference.

1991 4 81,500 165,000 335,000 830,000 1,900,000
2000 4 195,000 340,000 750,000 2,138,500 3,768,000
------- ------- ------- --------- ---------
Up by: 113,500 175,000 415,000 1,308,500 1,868,000

2001 4 218,000 359,000 745,000 1,950,000 3,450,000
2010 4 375,180 615,000 1,225,000 2,600,000 5,400,000
------- ------- --------- --------- ---------
Up by: 157,180 256,000 480,000 650,000 1,950,000

Irrational exuberance rules, baby!

Hey UD- Thanks, awesome. And I should have said this but I was assuming you do bld sales and comparables as the first and main indicator.

You said "If we see a HUGE decline in pending for a period of 6 months or more...and then see a bottom forming, then chances are the market may have adjusted a bit and some trades will end up surprising people."

First, do you mean suprising some people because they are done at a lower level? I assume so since decrease in pending means decrease in demand.

Secondly, are you saying the bottom forming is due to an increase in contracts due to sellers lowering prices?

Last, it sounds like looking at pending to see demand, and active to see supply is important to know what sense of urgency(competition) you might have as a buyer, is that correct?

'Kudos to JM for making all this data available, and putting it up so quickly so that is SEers may have a proper head-bashing with all the data.' Thanks inonada!

always a great place to gain additional perspective here on the forum.

i

Mr. Miller,
Is there any way to adjust for the improvement in the quality of apartment which are being sold (far higher end renovations and construction vs 90s) rental apartment which have largely stayed the same quality over the last 15 years? Also, it there any way adjust for lower interest rates currently vs in the 90s?

I would think that even after all these adjustments, buy/rent multiple has increased as there are a lot of young people in hedge funds and wall street in their early 30s who are making a lot of money and want to stay in the city. This was not the case in the 90s as trading revenues were smaller and hedge funds industry was not the same size. Apartments are always the most visible status symbol. Also, model/publishing industry wifes of many of these men (sorry, realize that I am being sexist but just speaking the truth) do not do the buy/rent calculation. They simply want to decorate the apartment they live in so that they can live in an apartment out of interior decor books. That is not possible in a rental. For that reason, I do not see the prices coming down much as the worst for wall street /hedge funds is over. We are not going back to 2007 bonuses but they will be ok.

Would appreciate your thoughts. Of course, other are most welcome to comment.