Wednesday, December 16, 2009
A snapshot of the Manhattan Real Estate Market today
» download snapshot (544kb) I'm presenting some data published here by Corcoran based on November contracts signed, which leads the sold and closed metrics by 60 to 90 days. This is telling if you are thinking about bringing a home onto the market, or buying one in the first half of 2010. I've met several new customers who will be spending bonus money in the first quarter, but others have been sitting on the sidelines waiting to see what was going to happen before plunking down hard earned, and recently recovered savings. I can feel the momentum to a busy first quarter of the year starting already. It was not unusual to see multiple bids on properly priced homes this December.
In truth, we've seen good activity in the final quarter of 2009. A year ago, amid the uncertainty of the financial crisis, sales activity had slowed to a trickle. This chart shows the number of Manhattan contracts signed market-wide since November of 2007 for some context. Today they are up 193% since January, largely because of improved opportunities for buyers, and consumer sentiment generally feeling better.
The sales activity has a roughly inverse relationship to the chart below, which shows the supply side. A year ago we began to see peaking inventories of apartments. It has today decreased by 25% since November 2008. While there is some "shadow inventory" of new developments (unlisted/unsold) unaccounted for in these metrics; the pipeline of newly developed units, has virtually been turned off. Developers accepted the new market reality and began improving prices as the year continued.
november 2009 manhattan condo and coop prices
Condos gained in pricing in November compared to a month earlier, amidst strengthening demand for larger homes. The number of contracts signed was roughly consistent with October and about double a year earlier. Coops sales activity was also up a significant 173% over November 2008. Median sale prices increased 18% over the month prior and 12% year over year. They are selling quicker too. The increased activity is due to pent up demand from people needing to trade up to larger units and improved pricing that brings them in line with demand.
If we continue to see the inventory of available apartments going down, and buyer activity remain as strong, I believe that we will be hitting real price equilibrium soon. On a micro scale I know that I've seen pricing in some larger coop buildings actually increasing already off their lows of the year.