S&P to launch condo price indexes for five cities with data going back to 1995
Started by Topper
over 17 years ago
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Member since: May 2008
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A new data set to analyze! This is very exciting.
Looking at the unadjusted numbers NYC condo prices topped out in Feb '06. That's the bad news. The good news is that the index is only -3.5% since the top tick. If you bought in Feb '06 with a 5 year horizon you're halfway through (31 out of 60 months). Factor in transaction costs and it's more like a -15% round trip loss if you sell at the index level but that still beats the stock market since Feb '06 and you got yo live in your condo (unless you rented it out).
For those who see Chicago as a comparison, Chi-town topped out Sep '07 and is -5% since then.
Where's the crash? San Fran is -17% since the top tick in its condo prices back in Oct '05.
Interesting to watch this index to check out what happens during the "economic recovery era" of Oct '08 - ???
http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,6,0,0,0,0,0.html
More thoughts. If I put in a 12% transaction cost hurdle (buy+sell fees, taxes and other costs) the breakeven point for NYC condos is almost exactly Jan '05. If you bought at the index value before Jan '05 you're in the money if you bought after Jan '05 you're underwater, according to the index.
I think these condo figures are for the NY "metro" area - not just NYC, let alone Manhattan. That said, I would expect that Manhattan is finally well represented in the data as I think the market cap of Manhattan condos is fairly high relative to the rest of the metro area - but I'm not totally sure. It would be nice to eventually have additional breakouts.
Bottom line, though, is that there still hasn't been a whole lot of price weakness in the condo numbers.
Hopefully - and probably - in time. I'm betting on the end of 2010.
Topper, you are correct, it is NY Metro so you have Jersey City, Hoboken, etc... lumped in here.
It isn't perfect, but we're getting closer to a usable measure....
NYC metro condo market looks to be lagging the stock market by 1.5 years. I think someone once suggested a 2-year lag between the stock market and real estate prices was reasonable. So let's see if Oct '08 stock crash == Spring '10 as the time to buy given that condo resale values in NYC metro area stopped rising Feb '06.