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Sunday, January 17, 2010

manhattan market equilibrium?

click to download report

4Q 2009 Corcoran Manhattan market report Manhattan real estate market report Has the Manhattan residential real estate market found its footing again? Prices have generally dropped about 15% from the fourth quarter of 2008 when the financial crisis began to apply downward pressure. The uncertainty of the economy in the first half of 2009, has lead to a release of pent up demand in the second half. In December of 2009 signed contracts for condos were up 48%, and co-ops up 157%.

Supply is shrinking and buyer activity, catalyzed by lower prices, is picking up. In Q4 2009 the story was about the available inventory of apartments. It was actually absorbed by 36%, and stands at about the same level as in 2007, at the height of the market (see chart below). That to me is the most striking metric. It is exactly the opposite of what was happening just before the market began to slide, as inventory built, and demand halted due to the financial crisis. Corcoran's entire Manhattan market report is available for download here. It has in-depth metrics on sales activity in the fourth quarter of 2009 and compares them to a year earlier.

click on the chart to enlarge

What it means if your a buyer is that the time is now, if you've been sitting on the sidelines. Interest rates are still fairly low for the moment and there are special tax credits available for some buyers. If you are a seller it means that there is a marketplace again for your property, if it is priced well and marketed properly.

When price appreciation will begin is anybody's guess. My opinion is that we've hit a point of price equilibrium now. It is a delicate balance which may be the beginning of a recovery; but it will be difficult for prices to rise significantly without greater employment and a more robust overall economy. I think we will see a market which has some stability, but little if any appreciation in the near term. If you are waiting for market prices to get back up to their peak to sell your home, you will be likely measuring that distance in years.

where are the opportunities?

click on the chart to enlarge

For first time buyers, it's a no brainer to buy now while prices are on a dip, mortgage rates low, and tax incentives are out there. If you are looking to sell and buy simultaneously, you're going to find both challenges and real opportunities in this market. It's no surprise to find that one bedroom buyers moving from rental to ownership comprised the biggest segment of buyers in the chart above. People also traded up to larger units, taking advantage of the dip in the market. Downtown Manhattan had stronger demand, on a relative basis, than other parts of the city. Your personal real estate strategy always requires looking at what and when you may have purchased, and what and where you are looking to buy. I help clients navigate those decisions every day. As always, please let me know if you have questions about the Q4 2009 market report.

» download the fourth quarter 2009 manhattan market report

Wednesday, December 23, 2009

Sohoho Nohoho (replay)

hohoho postcard

headroomI was surprised to find out that my Christmas postcard from 2004 was being auctioned on ebay, by an outfit named Sensual World, "Purveyors of sensual items from around the world". While I fail to see how exactly I fit in there, I'm somewhat flattered nonetheless. These were both mailed out and distributed on postcard ad racks around downtown Manhattan that year. It was free then, but can be yours today for about three bucks. I've always focused on developing a brand and bringing attention to my practice, and my clients listings, through design. While this is a truly minor recognition of my design work, it gave me a great excuse to recycle this image, and take a moment to wish you all a very happy holiday season!

Wednesday, December 16, 2009

A snapshot of the Manhattan Real Estate Market today

Corcoran Manhattan market report» 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.

click on the chart to enlarge

Manhattan number of signed contracts per month in 2009

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.

click on the chart to enlarge

Manhattan for sale housing inventory per month in 2009

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.

click on the charts below to enlarge

Manhattan condo prices in November 2009



Manhattan coop prices in November 2009

» download the manhattan november real estate market snapshot (544 kb)
» download the Q3 2009 manhattan market report (3.9 mb)

Friday, October 2, 2009

leaner times call for leaner brokers

Peter Comitini on Staple Street in TribecaheadroomSo for those of you who've been wondering where I've been, let me start by saying I'm back to blogging. I've been managing my time a bit differently recently for both professional and personal reasons, and took a momentary break from blogging this summer. I've actually had a busy time of working, and closed a good number of deals. I made a recommitment to my own health. I guess leaner times call for leaner brokers. I had been about 100 lbs. overweight for a number of years. I said to my doctor a year ago that if I didn't do something about my weight, I felt like I was going to die. With his best Borscht Belt style delivery he told me, "Peter, I have bad news for you. Your gonna die sooner or later anyway". Which actually kinda put it in perspective for me. I decided that my quality of life, longevity, and eight year old daughter, were important enough reasons to make a change. Since the beginning of the year I've now lost 75 lbs and still counting downward.

This has meant putting my life back into balance. That looks like spending much more time exercising, planning my nutrition, and taking the time to sit down and have a proper meal— rather than grabbing a slice while running to an appointment. In this marketplace, the deals take longer and require even more diligence to close too. I remember that when I worked at Newsweek as their Director of Covers, the top editors would always take the time, even when we were on a Friday night publishing deadline, to leave the building and sit down to dinner. The important take away for me being that time management is what we make it. Life will run you, if you don't run it. Focusing on the areas of my life that were demanding my immediate attention was the right thing to do for me, and have lead to new opportunities and accomplishments.

I've added quite a lot to my days. Rather than using a ghost writer, or posting something half-baked, I just went quiet for a little while. It's funny, but when one blogs, there is a kind of self-imposed tension to keep up with it. The real estate market is still here, and I will be continuing to bring you my perspective on it. This week I'm learning how to work my posting back into my routine. I'm feeling great and excited to be back to blogging. I posted the latest report on the Manhattan real estate market (3.9 mb) for download in the left column, and have a commentary forthcoming. Stay tuned.

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