War & Peace: NYC 1Q09 Market Reports

The 1Q09 Market Reports were released last week. Of course each one of them varied:

 

Halstead -The Report

Prudential Douglas Elliman-The Report

Corcoran-The Report 

 

As well as the Media’s interpretation of them.

A recent example:

Housing bust hits Manhattan(with a sub-title: Prices still rising in Manhattan real estate) CNN/MONEY

Honestly, no wonder buyers and sellers are in a state of confusion!

The one thing that really disturbs me is the % basis experts, brokers, and the media throw out there…20% below prime; 40% current list price; etc.

 

 

The fact of the matter is that all apartments; each neighborhood; and every seller has a different story and price-point.  There is no secret percentage.  Some apartments are priced well from the beginning-some are not; some neighborhoods have a greater demand; some sellers are desperate-some are not….To say units should be trading at 40% below list price is just out right foolish methodology for me to communicate to my clients. Mainly, because there is not enough data that has been specifically scrubbed and brokers really need to dig deep for the actual pricing. How can one truly take heed to media reports of condos that include those on East 87th (a walk-up building) all the way down to Walker Street (a full service building)? To me, that is like comparing General Motors with General Mills.

 

 

I have stated many times to my buyers (and sellers): 

“Every apartment has a different story.”  Throwing an average percentage out there is just a lazy broker to me —One that reads the media head-lines as if they are Cliff Notes. One thing that all those years working in a depressed market (such as Cleveland) taught me was to do my homework as if I was tackling a novel by Tolstoy.

When a buyer is serious: I pull the original deed, I pull the recorded mortgages, I pull the closed comps and in this 2009 market those comps also need to be blended with the current list prices…and, yes, I ask a lot of questions.

 

 

Pricing real estate is an element of  history, a measurement of now, a fraction of need and component of balanced consideration…Not an average overall %.

 

 

A Contemplation of a Serious Matter

To further understand the Wagnerian complexities encircling the economy which currently augments the score of real estate here in Manhattan; I attended a few “round-table” discussions performed by the executive leadership team of Halstead at REBNY.

 

The archives of data shared with the most experienced vocal insight of leaders within the industry were heartening for me; but, also brought a dissonance: For nearly a week, I have been trying to find some sort of counterpoint with real estate trades over the last years combined with this new century.

 

So, I decided to compose the data in a form that I could actually understand this NYC Ring Cycle:

 

	STUDIO	1BDRM	2BDRM	3BDRM
2007	$379,182.00	$631,648.00	$1,411,088.00	$3,482,993.00
2006	$389,430.00	$614,770.00	$1,325,048.00	$3,230,631.00
2005	$346,231.00	$570,974.00	$1,228,087.00	$3,091,631.00
2004	$275,791.00	$451,716.00	$1,015,680.00	$2,491,606.00
2003	$243,252.00	$412,181.00	$869,522.00	$2,262,754.00
2002	$248,305.00	$342,451.00	$768,653.00	$2,447,632.00
2001	$226,283.00	$344,250.00	$760,030.00	$2,285,924.00
2000	$152,971.00	$297,696.00	$767,508.00	$1,972,794.00
1999	$103,600.00	$218,061.00	$555,907.00	$1,510,412.00
1998	$123,070.00	$248,632.00	$504,317.00	$1,197,376.00
1997	$91,744.00	$171,731.00	$428,505.00	$1,205,836.00
1996	$79,130.00	$152,380.00	$383,234.00	$998,797.00
1995	$72,176.00	$142,685.00	$355,278.00	$1,000,486.00
1994	$70,985.00	$142,739.00	$369,060.00	$974,718.00
1993	$71,238.00	$136,471.00	$349,552.00	$921,855.00
1992	$83,131.00	$149,677.00	$368,031.00	$930,805.00
1991	$91,698.00	$162,423.00	$371,580.00	$871,036.00
1990	$116,523.00	$174,128.00	$438,077.00	$1,085,296.00
1989	$121,863.00	$184,042.00	$464,629.00	$1,171,664.00

 

Post analyzing the above composition (focusing on the 1990s), I have been haunted by an Unanswered Question:

 

Are we in for another dark dive that lasted nearly a decade?

 

As if I was forced to only see Central Park in the Dark while listening to the music of Charles Ives, I desperately needed to find a dissimilarity within this cycle…this simply cannot be the destiny of our Manhattan market!

 

What is the key difference between the 1990s and this second day of March within the year of 2009: population!

 

According to the Department of City Planning, the population of NYC in the 1990s was 7,322,564…this day it is over 8,310,212.

 

It is for such growth in our city’s population that I do not foresee such a “dark decade” in our future…Simply, we have a NEED to house the growing population in NYC…

 

For the record: I am a REALIST that processes information like an appraiser; communicates as a broker that is a BELIEVER that all things can change for the betterment with thought, knowledge and perseverance…a counterpoint in real estate? Maybe…

 

  

Printable version of the above data

*In music, counterpoint is the relationship between two or more voices that are independent in contour and rhythm, and interdependent in harmony. It has been most commonly identified in Western music, developing strongly in the Renaissance, and also dominant in much of the common practice period, especially in Baroque music. The term comes from the Latin punctus contra punctum (“point against point”).