True Gotham

Numbers, numbers, everywhere.

Josh Barbanel wades through third quarter figures from several different sources, and finds the market to be, essentially, stable--although the numbers vary pretty wildly. He also notes:

Part of the uncertainty over the direction of the Manhattan market comes from the many ambiguous and contradictory market reports issued by various brokerage firms. They all combine publicly available data on co-op and condo sales, with proprietary information on closed sales that have not yet been filed and recorded. The result is that each report includes a different mix of sales, and may record the same sales in different quarters as information becomes available.

Sometimes the information available is incomplete. Mr. Miller, for example, said the increase in reported sales might be the result in part of better data collection, as the city provided public access to sale prices of co-ops that had not previously been available.

Pamela Liebman, the chief executive of the Corcoran Group, noted that while the overall market paused in the last few quarters, the prices on smaller apartments had continued to rise, driving up median prices, a measure less influenced by multimillion-dollar sales, making even small apartments more expensive. As a result, some developers of new apartments have been offering concessions, such as covering closing costs, that would reduce the cash outlay needed to buy an apartment.

Gregory J. Heym, chief economist for Brown Harris Stevens, who produced the most seemingly pessimistic figures, said the price decline actually captured a market shift. He said the decline in average sales prices reflected a change in the typical apartments sold: the average apartment size dropped and the price per square foot rose.

He said he expected the strong local economy, and modest interest rates, to keep the co-op and condominium markets stable.

No surprise here that the five reports released yesterday all supply different information. Two of the reports were put together with help from the same appraisal firm--and the resulting numbers are still different? What does this all mean? I don't know. I do suspect that we will begin to see more accurate information over the next 12 months as co-op information is now public domain. I would love to have a round table on True Gotham of all who had a hand in preparing these reports to take the inside scoop on why they vary so much. Stay tuned…

So whats it going to be. Are owners going to blink first or buyers. Will it be a soft landing,or will prices continue to decline gradually over a long period of time?

I have a question for every owner trying to sell their apt in manhattan. Can they afford to buy their apt today for the price they are asking.
Do they have the cash available for the down payment, do they have have the income necessary to service the mortgage debt. I bet the ansewer to this question by most sellers would be no.
So what makes them believe that someone else out there can?

The simple answer Frank is that "someone else" keeps coming along and paying these asking prices because there is an awful lot of $$$ out there. Whether or not a seller can afford there own apartment at today's prices isn't terribly relevant. Would you harbor disdain for the person who was fortunate enough to buy Google stock when it was pennies a share. The better question would be to ask the seller if they have set a realistic asking price based on current market conditions. The answer to this question is much more frequently a resounding "yes." Most sellers who were "testing" the market are gone and those who continue to "test" the market are in for the long haul waiting for a buyer.

I'm seeing more buyers and sellers "blinking" simultaneously these days with concessions being made by sellers and buyers being realistic about market softening.