Radar Logic: Manhattan condo report (thru Aug.)

Thanks, GraffitiGrammarian.

I don't think this has been posted. It's a report I haven't seen and it looks quite interesting. Seems like it is Manhattan's answer to Case-Shiller which doesn't include Manhattan coops/condos. It's also interesting to see how much diversity there can be even within just Manhattan. I expect that when the October report comes out the results will be particularly interesting.

yes agreed...wait until it catches up and people start to realize this will not be a 1 or 2 month decline then bounce back up. Unfortunately, media headline shock will enhance the slowdown and thats when things change.

urbandigs yes agreed...wait until it catches up and people start to realize this will not be a 1 or 2 month decline then bounce back up. Unfortunately, media headline shock will enhance the slowdown and thats when things change.

I'm confused then. Does not this report go against what most RE bears have been saying about the "current" state of RE in Manhattan? According to all the reports I have been reading here, RE is supposed to have already been in a far worse situation then this report says. No?

real estate is not liquid right? real estate sales are also lagging right? So closings in that report could be contracts that were signed between JUNE & SEPT of 2008 + any and all new development closings that were signed into contract up to 18 months ago, yet had to wait to close for the project to be completed, and CoO issued, right?

So, price reports in general are lagging. We still have alot of new development deals to work through the system, right? Who knows the number, but there are certainly tons of condo sales that are waiting to be closed on for building completion, this will artifically skew the data up and give a false impression of time. For example, if you paid $1,400+/sft at THE LUCIDA on 86th & Lex, and signed that contract say SEPT 2007, you are YET to close! They are still working on this building. So, when you do close, a deal that took place some 15 months ago in time and place, will get counted in the pricing report of today!

So, when I discuss front line observations, I tell you what is happening NOW! Not 15 months ago, or whatever. These reports are simply not real time and they could be very misleading. Because of this, it will take a few more quarters for what I and others discuss that is happening now, to work its way through the system and into the reports.

If you want a more real time take on what is happening now, look at sales volume and inventory trends and days on market trends for signs of strength of weakness

Although things have been slowing all year, the employment market and the stock mkt (think loss of personal wealth) didn't start looking super ugly until Q3, with October being the worst. Real estate is certainly a lagging indicator. It's next year's report which will be gloomiest. Jonathan Miller has been saying for most of 2008 that he's more concerned about 2009.

Q3 numbers were barely touched by the panic. That was mid-september, and how many deals were sold that week and closed within 2? Q4 numbers are going to be a meeeeeeeessssss.... and I think that just starts the snowball downhill...

urban, what we really need to see are pricing trends with new construction stripped out. the same way that nationwide we report new home and existing home sales.

Corcoran actually did that in one of their reports. I only caught the anecdote (in the post), but they said that Q1 was actually down 2% YoY when you look at only resales.

Meaning, we probably started declining last year...

"Jonathan Miller has been saying for most of 2008 that he's more concerned about 2009. "

as have I! 2009-2010, I dont see anything that will make this only a 1 yr downturn, question is when the fastest adjustment happens. I think we're in it now.

Special K - I think the new reports are starting to do this. I think corcoran started last quarter. Your right though. Eventually we'll see where these new devs resell at, for the ones that MUST sell. That is when you will see the biggest percentage drops I think. The guy who paid top dollar, $1600-$1,700+/sft for a new dev that is forced to liquidate.

Urbandigs:

Do you think these new developments can wait things out? Or are they going to be under pressure from the banks? Will they simply adjust strategy and rent out the units instead?

really dont know, its highly individualized and dependent on the developer, their financial strength, the investors, and the terms of the construction loan. And of course sales pace, and if the project is within time and budget expectations.

I just dont know. Im sure some will be forced to alter plans.

The condos renting out instead movement started almost a year back. Hell, Times did an article on it. At some point, they're going to figure out that they can't rent ALL of 'em (at least without major price drops), so that will make it tougher choice between renting and just selling for less...

If every development thinks they can rent out and "wait it out", then they will ensure that they actually can't...