March Manhattan Market Update

How is condo resales?

Or even better by $ per sq ft and absolute $ segment

Resale market pulse - https://www.urbandigs.com/resale-charts/market-pulse/?agentid=58

Hopefully this shareable link should work, I know some have said it didn't.

Here is market pulse broken down by price point - https://www.urbandigs.com/resale-charts/market-pulse/all-manhattan/all-proptypes/%3C600k+600k-1m+1m-2m+2m-5m+5m-10m+%3E10m/?agentid=58

Thank you. The chart by price segment is great. So less than 2mm, in which segment there are limited no new developments in Manhattan, seems pretty healthy.

Yeah it's cool to see it like this.. buyers and sellers need to know how fragmented this market is and how their little world is doing

So, market pulse is down from last year (which everyone admits was horrible), pretty much across the board except for $1 million to $2 million (where it is up 2.1%, but only because of record numbers of "taken off market", is still less than 0.5, and is down 7.5% YTD).

I think you guys are way over selling the health of the market.

I don't know how much this is affecting the actual numbers, but every day I am getting more and more emails from brokers with "off market" listings. Obviously they are actually on the market, but not included in any listings database and therefore not included in the number of new listings, number on the market, etc.

Noah,
On Chrome I'm getting that pop-up like last time, Firefox not.

I take that back - it's happening on Firefox too now.

@Noah: I'm sometimes getting the pop-up and sometimes not in the same browser. Very odd.

Back to the actual content - the interesting pattern to me is that it looks like the market pulse for almost all market segments were trending up from 2011-2015, and now almost all of them are trending down from 2015 onwards. The current year looks most similar to 2012.

The other interesting pattern is that the 5-10m and >10m segments seem to always be well below 0.5, but everyone seems to acknowledge that segment has been hit particularly hard recently. It's not clear that you can see that from this data alone, though. Perhaps it's just a scale issue with the chart, but I would need the raw data to figure that out.

@Noah - and most importantly, thank you for the data!

Ugh, ok we are deep into a few big initiatives so I'll have to circle back to the shareable link issue later. Thanks for the feedback on it, definitely helps.

All the links work for me, I'm using a pixel 3. Not sure if it matters that I'm a subscriber.

I became a subscriber. It works for me now.

I'm going to take a guess on something and Noah can verify:
UD was getting pretty much all of the closed sales from the city registrar's for a long time, but it took a lot longer to get close to all of the listings. So for this particular metric (Market Pulse) even if the market were exactly the same, the numbers given by UD charting would probably be lower the further back in time you went.

30, talking somewhat bullish angle in the numbers?!!

No, what I'm saying is if you try and compare today's numbers with some time a decade or whatever ago where the Market Pulse figure appears to be the same you may end up with a false comparison because the number back then may be higher than should be indicated by market conditions.

But with all these shadow listings it's also skewing in the opposite direction.

Interesting discussion. So 30yrs, correct me if Im wrong. Your looking at Market Pulse (which is ratio of pending to inventory) as units of inventory where both pending and active both contribute. If you incorporate Off Market into this total units of inventory, it gives a slightly diff angle to the picture.

So, off mkt today is 4500 or so. Off mkt in 2012 was closer to 3000s. So considering that Market Pulse in 2012 was similar to today, but off mkt was lower, leads to a slightly more pessimistic view when looking at today's MP value. Is my logic correct here?

30 is also saying that you may have captured a smaller percentage of listing In 2012 vs today.

Well, the PIPE is basically the same..RLS, it was just called ROLEX back then in 2012 before rebny regained control of the sharing mechanisms and started RLS..so I didnt think it was this?

Noah,
Yes that is the point I am making in regards to Market Pulse and Off Market - that you have to color Market Pulse to take into account Off Market because Market Pulse kind of counts each Off Market as half a sale (positive) when I think in terms of an actual indication of how the market is doing, Off Market represents a negative.

Regarding the percentage of units on the market you are actually capturing I was referring to earlier on than 2012.

What does RLS capture? I just brought a 2/2 to market -- SE says that there are three other listings for sale in the building; OLR agrees that there are three other listings for sale in the building -- but last time I searched the RLS portal, I only saw mine. Am I searching incorrectly, or are others not pushing to RLS?

UD lists supply as 6,628 units (is that the RLS count?). Streeteasy has 7,367 units listed. OLR says 9,008.

RLS Portal is opt in only, so guests to UD who search will see about 75% or so of the actual listings. I got to go door to door and get each firm to opt in to get guest search full exposure. We put a note saying this on guest searches and a way to connect to agent see all listings

Now, agents and their attached clients, and all analytics, are full rls and see all listings.

Our supply chart is highly cleansed, so we do remove stale, limbo and illogical listings from supply counts

Could you define illogical?

A listing that violates normal status flow.. don't want to give details, it's part of our IP

@Ali the other agents may have listed incorrectly and then it doesn't get pushed to the RLS. For instance once I had an incorrect email address for an agent. Because of that the RLS rejected the listing, however they don't tell you that, you have to do your own investigating to make sure your listing is in the RLS.

Guess I'm saying those other agents may not realize their listing is not pushing through to the RLS (assuming they're REBNY).

Understood.
But if you're not counting listings because they violate the apartment numbering convention for the building (say the building is simply a number followed by a letter 9A, 10B, etc and a 9B1 shows up so you reject it) then you may be scrubbing things which are actually on the market since we are seeing brokers take listings off the market and re-list them with false unit numbers to game the system re:days on market.

No no, not those

After all the anecdotes about how market activity was booming, at the end of the day number of contracts signed for March in Manhattan down 13.1% YOY.

@30yrs The results hold for both resales and new dev, down -10.4% and -25.4%, respectively. Looks like supply is still increasing even with increased listings taken offline, because of the slow pace of sales.

All the price metrics are negative as well, again across both markets. However, that data is lagged vs. the supply / contracts data, so it's not an apples to apples comparison. Not a lot of "green shoots" in this data.

Just posted an update

https://medium.com/@noahrosenblatt/april-manhattan-market-update-new-charts-are-in-398832baa30c

I don't know if anybody used the term 'booming'. the market was booming in 2014 it's certainly not booming now.

I think a more interesting conversation is whether we're going to see a crash of prices of 50% as 30 thinks. Or are we simply in a correction cycle that will find its bottom at a level a bit less frightening than 50% down? (I don't discount either potential outcome anything is always possible).

The Burkhart group is certainly not a proxy for the market but we continue to be busy and are getting deals done. The only segment of the market that remains extremely competitive are two bedrooms in Prime Brooklyn under 1.4.. I don't want to bring other agents listings on to this board, but I could name 4 that went into best and final over the last few weeks after 1 open house. Yes, that's certainly an anomaly.

Our current buyer-base is being extremely selective and careful.

But I certainly found you can't generalize about this market. In a newsletter I remarked prices were down 10 to 20% since 2014. This is based on personal experience in the market with actual transactions. It seems more likely we're down a bit less based on actual data points for resales under $5m when considering the entire market.

This latest Miller Samuel report shows the continued decline in the market. At least for now it continues to be a soft landing, as one might say.

How much longer will the faucet continue to drip?

Keith
The Burkhardt Group
https://www.cnbc.com/2019/04/01/manhattan-real-estate-sales-fall-for-sixth-straight-quarter.html

Keith, Thank you for your insight. Best price metric is Streeteasy condo index which has appx 3 months lag due to time taken for recorded sale to appear in the city records after a contract is signed. It is appx down 5 percent with potentially another 1percent decline in the last three months. So total 6-7 percent down for Manhattan resales. Some areas and lower prices segments down less and higher price points and gut reno needing apartments down more.

BK still increasing as per index.
https://streeteasy.com/blog/february-2019-market-reports/

Keith, as always, thanks for sharing your in the field insights. Its nice to hear it along with aggregate data which doesnt get the personal touch

Just to clarify I have said 35% to 50% (and still believe this).

https://www.cnbc.com/2019/04/01/manhattan-real-estate-sales-fall-for-sixth-straight-quarter.html

30, Which $ per sq ft price segment? I think in Ultra-luxury segment of $4-5k per sq ft and >$20mm 20-30% has already happened from the crazy initial ask.

Almost everything in a new development is down 10% in Manhattan from initial ask in 2015.

Here is an example of down 25% but traded at $7.5k per sq ft. Could it go down another 20%? Sure and it will still be very expensive and much more than the cost of building a new one.

https://streeteasy.com/sale/1380798

Unless I'm reading the dates wrong, it looks like they took the 25% ($10M!!!) hit after less than a month on the market!?

The ask is made up by the developer.

Most of the high floor/$ sales in this building are at 20 percent discount from sponsor’s ask. This one is 25 percent.

https://www.bloomberg.com/news/articles/2019-04-02/manhattan-homebuyers-make-fewest-first-quarter-deals-since-2009

Re: 432 Park:
As I have said before every unit in a new building is actually on the market when the offering plan is accepted. I mean, if someone came along and offered them $42 million for this apartment at any time since sales began do you really think they would have said "No. We haven't released that apartment yet. You can only buy one of the ones that we say we are offering right now"? So in reality this was on the market for over 5 years. And they had a pretty good idea of what they could and couldn't get for it based on all their recent sales. So unlike "regular" sellers they didn't need the listing to get "seasoned" before they became realistic about accepting an offer.

That's quite a spread! Glad the buyer was smart enough to ask for a 10 million dollar discount!!!

Keith, The buyer does not jade be very smart to get 10mm discount. Almost everything in this building traded/went into contract at 20 percent below ask even in 2015. Of course, the buyer has to be pretty smart or born into the right family to have that money.

Keith, The buyer does not have be very smart to get 10mm discount. Almost everything in this building traded/went into contract at 20 percent below ask even in 2015. They can look at previous sales as the sponsor never adjusted the ask in line with actual sales. Of course, the buyer has to be pretty smart or born into the right family to have that money.

theburkhardtgroup - still think the market will continue to decline in manhattan and brooklyn over the next 6 to 12 months?

Yes.

Come to the dark side Keith!!! ;)