Latest Urbandigs Resales Data

Monthly Contract Activity
816
Contracts Signed In April
18.4% from prior month
15.9% from prior year

Pending Sales
2,169
Listings In Contract As Of Yesterday
16.8% from prior month
15% from prior year

Do you think that any of this might relate to a high incentive to enter into contracts now in order to try to close before July 1? In other words, there's a one-time catalyst to push transactions now, which would get people off the sidelines.

Average price of resale is well below $2mm. So the impact of any transfer tax is negligible. Even at $3-4mm range, tax increases are small relative to discounts you can get.

While I love UD data, I think that the way they have it split into "Resales" and "New and Recent" allows people who want to have an unrealistic take on the market because so much of what they have in the second of those categories is clearly in the resale market. So when I see people using the data to say how the only problem is in new construction based on this data, I know that it's not really accurate.

I will also say that while these numbers are ok, I don't think they are as positive as some people want them to be. A) Last year was abysmal; 16% over last year is nice, but even if that continued for every month for the rest of the year is would still be substantially less volume than the last time the market was headed upward, B) New listings for the month are almost DOUBLE the number of contracts. So even though the number of contracts is up, supply vs demand wise pressure is still downward, C) "Off market" still in record territory. Almost all of these are not "permanent" but simply people waiting for the market to improve and every time there is any sign of that, you will see a lot of these rushing back on and impeding a recovery, D) While market pulse is minimally higher than last year, it's still at a pretty bad 0.43 indicating a receding market, E) Median Listing Discount up 81.8% and Sales Over Ask down 54%.

And on top of this you still have the "New and Recent" which you can not divorce from the market as a whole, especially when prices have come down enough in a lot of that market to make it competitive with the upper end of "Resales" (and we know there is a big push by brokers to get buyers into that end of the market right now). That market things are worse than the numbers would have you believe because so much of the inventory there is unaccounted for in buildings like Central Park Tower (which we know has been on the market for over a year), The Xi, etc. So there are probably THOUSANDS more listings than these statistics indicate.

TeamM,
As far as I can tell there isn't an impact on the Coop/Condo market at all from the proposed changes. The place I would expect it to be happening is where the increased Mansion Tax is kicking in most, but looking at the Olshan Report it would seem like "luxury" is is doing worse than last year, not better. There is some impact in the multi-family market, but it's being drowned out by the worry over what is going to happen in Albany re: rent regulations.

30, If YOY improvement in contracts and pending sales continues at more than 10% for another month, the rest of the statistics will improve and media will finally catch on. One month of better data is clearly too early to call the market healthy but it is certainly a positive - something we have not seen for the last year.

I see 2 key highlights of the UD data:

1. Contracts and pending sales are higher for existing devs, but we know pricing is down. In other words, the new demand seems to be driven by decreases in prices. When prices went down, some demand came back, which makes sense. The question will be at what price point are the new deals closing at - if they are lower than the most recent comps, that wouldn't necessarily be a good sign, no?

2. Supply also went up 12.9%, so even though pending sales went up by 14.3% and contracts went up by 15.9%, that's only eating into the backlog. And as 30 has already pointed out, off market dwarfs all of these metrics (up 29.1%), so there's likely a lot more true supply there.

For the first one, Streeteasy condo index is down appx 5.5 percent for the peak (March Data). Probably has another 0.5 percent catch up. So 6 percent down by the time we see April index on appx May 20th.

TeamM,
I feel I should clarify: as far as I can tell there *hasn't* been an upward bump in number of transactions by people trying to beat the deadline. I don't think there is a question that in the long run these taxes will both depress prices and number of transactions because while they are not a huge percentage of gross transaction price, transaction costs already represent a large drain on gains, especially where people are depending on leverage.

Streeteasy report confirming strong April.
https://streeteasy.com/blog/april-2019-market-reports/

Index, which is based on resales of the same unit, is down just shy of 6 percent from the peak.

The latest UD data as of 5/22 shows that Supply YoY is once again greater than Pending Sales YoY (if only just) at 12.4% vs. 11.8%, with Market Pulse now negative again YoY at -2.3%. This is a change from the beginning of the month, where the numbers supported increasing demand.

It will be interesting to see where the pricing lands for April's transactions. The impression I get is that the units that are/were selling are the ones that priced aggressively, so I'm curious to see if that is actually reflective of a broader trend in the market.

There numbers change daily. So as long as the pending sales in resales category are staying in appx +10 percent range, positive.

There = These

But it seems to be trending down. I don't know if there's an easy way to see a time series for that metric, but the impression I got was that April started off strong, but things have been slowing down since then. And, more importantly, I don't see any improvement in price. Not sure how healthy an increase in sales driven by decreases in pricing really is.

The SE pricing index shows April pricing is down to 2015 levels, but the impression I get is that prices are still headed down.

First step is pick up in volume for a price decline to stop. Pick up in volume creates some urgency in people looking to pull the trigger. For the last two months pending sales are more than 10 percent higher YOY. Is it a trend? I would like to see at least one more month and a couple of positive media stories about Manhattan real estate.
I think Streeteasy condo index for May will be down a little too which are Feb/March contracts. We wouldn’t know the current contract prices factually till two to three months from now.

I agree with most of 300 Mercer post above. The numbers we see at the end of this month should be interesting. I've been mostly hearing that things have been slower than April, but we heard a lot in Fall 2018 about how things were booming and the numbers didn't end up bearing that out, so who knows. In my office we had a number of listings which sold surprisingly quickly and at strong numbers this month, but also stuff which has been sitting around going nowhere even though well priced.
And despite number of contracts increasing YOY for April, there were still almost double the number of new listings as new contracts which is an indication of downward market pressure.

Anecdata: I am in the more active end of the market (sub-$2 mm properties) and I am so busy that it's making my head spin. I think it's interest rates, honestly; one of my mortgage connections said that we're at 16-month lows. StreetSmart, from your double POV of real estate and mortgage, what are you seeing?

Ali, Nice. Congratulations!! Mortgage rates are indeed super low. I am doing low LTV refi 10/1 ARM at 2.75%. Someone I know got quoted 2.5% on new purchase for 10/1 ARM (High net-worth / jumbo; let us just call it $4mm-$7mm purchase; 55-65 LTV).

I agree Ali, we're also extremely busy but it's been very difficult getting to contract. We've recently completed a decent number of transactions (contract), however the amount of work we're going to get there has been out of balance. I'm not complaining, but that's been our experience at least.

Keith Burkhardt
TBG

Keith - could you please explain what you mean? Lots of work on negotiating?

My best guess is that buyers have woken up due to incredibly low rates and want the apartment with a large discount. The buyers still have good options in the market but not necessarily at the prices they want to pay. I was looking at Belnord and the finished apartment discounts they were willing to offer 3-6 months back have reduced by 3-6 percent.