Median price up, Sales down

This article is to be ignored. EddieWilson documented dozens of apartments that are currently selling at 2005-prices.

Buyers are in denial for paying today's prices and sellers are in denial for asking today's prices.

Prices down 40% by Dec. 1!

Median prices are down 12% this year alone. by the CORCORAN numbers (same ones we are talking about) They're using YoYs. Soon they'll be doing this year over 2001.

"Streak of gains"... what a joke...

Median prices are skewed because of mix, you can't pay any attention to them. Isn't that correct nyc10022?

I don't think prices are going to go up, but they are not going to fall 40% across the board by December 1st.

That's just some random statement thrown out there without any real evidence to support it. Just the practicality of it doesn't work. By the time any numbers trickle out after sales will be months down the road. I'm just saying....

> Median prices are skewed because of mix, you can't pay any attention to them. Isn't that correct
> nyc10022?

Its a flawed measure, absolutely. We have a bunch of flawed ones we can use to sense overall direction. Another would be sales volume. That has absolutely tanked.

That being said, when it goes from 10% up to 10% down, even in median, that is a pretty big change in direction. Also, the baset issue has been skewing UPWARD. So that might just mean it is significantly worse than the median.

A better view is the resale numbers, which don't have the basket issue to anywhere the same degree, from Corcoran show greater declines than the overall medians (through Q2, haven't seen Q3 yet)

And, the apples to apples is every worse, several 10-20% losses on apartment resales have already been shown.

Most importantly, we are talking about a period of sales who 80% or more were priced pre the panic. Probably more, given this is based on closings. We haven't even seen the September shock. So, just logic there says we have at least another quarter of some severely challenged numbers.

"Its a flawed measure, absolutely. We have a bunch of flawed ones we can use to sense overall direction. Another would be sales volume. That has absolutely tanked."

Listings have also tanked and if you look at the numbers over the past few weeks, they are falling fast. You can't get dramatic price reductions without inventory, so the new listings numbers will be what I would focus on in addition to the sales volume. I know you don't want to, but you have to look at both sides of the equation for your statement to have merit.

As far as measures go, I like median price per square ft. I think it is the best measure of where prices are going and the most important for buyers and sellers.

> Listings have also tanked and if you look at the numbers over the past few weeks, they are falling
> fast. You can't get dramatic price reductions without inventory, so the new listings numbers will be
> what I would focus on in addition to the sales volume. I know you don't want to, but you have to
> look at both sides of the equation for your statement to have merit.

Absolutely, you need sales to have the stats show anything. But, nothing selling usually leads to lower prices, not higher prices.

That being said, Urban Digs showed a peak in inventory last week. Also, even if inventory cuts in half, if sales go down 75%, that is actually an increase in effective inventory on a per months basis. Fewer apartments being chased by EVEN FEWER buyers. That being said, all the stats I've seen say higher inventory through last week. And still more to come through new construction.

> As far as measures go, I like median price per square ft. I think it is the best measure of where
> prices are going and the most important for buyers and sellers.

I like it, too, but thats also a tough one. Because the worst apartment in a building will sell in good times, but will have trouble in bad times. Buyers can be pickier and pick the better stuff.

I also think we have the issue of giveaways not included in prices.

Total listings have tanked, JuiceMan, but not available listings, which have soared:

Sales in Manhattan
We found 8,091 listings with an address
Median price: $1,230,000 Median size: 1,150 ft² Median price per ft²: $1,164

That seems to be higher than UD's numbers from last week. Are they using the same source?

http://www.urbandigs.com/charts.html

Either way, that is a pretty steep climb..

Personally, I ignore the median (or average) number. In my search which started early this year, I saw the selling prices about flat with 2007 to about 5% down by summer. That is strictly for apts. I was interested in so YMMV in other areas/different types of places.

For the record, I've stopped looking until a) prices fall at least another 10% or b) I hit the lottery (and I don't play the lottery).

If you read the Corcoran 3Qtr report you will see that close to 40% of the transactions were in new developments that went to contract a year ago. This is when the market was much stronger. These transactions are clearly skewing the numbers. Also, you realize with so many of the transactions being driven by contracts that were signed a year ago, there are substantially fewer buyers in the market, far fewer than the number of transactions would suggest.

Here is the non-slanted (or at least less slanted) view of the report...

Manhattan housing market cools in third quarter
Median sales prices were down almost 10% from the second quarter, even as more apartments are sitting on the market longer.

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20081003/FREE/810029964/1059/newsletter11

"Also, even if inventory cuts in half, if sales go down 75%, that is actually an increase in effective inventory on a per months basis."

That is a fair and valid point nyc10022

"I like it, too, but thats also a tough one. Because the worst apartment in a building will sell in good times, but will have trouble in bad times. Buyers can be pickier and pick the better stuff."

Not sure I follow you here. Bad apartments will have a lower lower price per square foot than good apartments in the same building. The price per square foot should already reflect those differences.

"I also think we have the issue of giveaways not included in prices."

If you are referring to new devs, I agree that there us a long road ahead for marginal projects in marginal areas.

It is tough to get an accurate read with the reports coming out of the RE firms becasue they will be extremely cautious in how they word everything. It will be interesting to see how things decline in the 1st quarter, as people who took their apartments off the markets throw them back out there to see what kind of interest there is.

I do think the numbers almost have to be looked at neighborhood by neighborhood, block by block and apartment by apartment to see what the real cost is to a particular unit. I know how impossible that is, but I guess what I am trying to say is that saying "the market will be down 20%" isn't necessarily representative of what one particular apartment may experience because so much goes into each apartment, in each building and in each neighborhood. 20% down will mean that some are down 35% and some are down 5%. "It depends" is a weak answer, but I do think it is accurate.

>> "I like it, too, but thats also a tough one. Because the worst apartment in a building will sell in
>> good times, but will have trouble in bad times. Buyers can be pickier and pick the better stuff."

> Not sure I follow you here. Bad apartments will have a lower lower price per square foot than good
> apartments in the same building. The price per square foot should already reflect those differences.

We agree on that. My point is, in a bad market, both apartments might sell because buyers can't be choosy. In declines, especially with sales off, the one buyer likely takes the better apartment. I am oversimplifying, but I don't think crap sells in a bad market.

Point is, yes, all of these measures are flawed.

But if it was median we watched on the way up, it is median we'll watch on the way down...

> "I also think we have the issue of giveaways not included in prices."

> If you are referring to new devs, I agree that there us a long road ahead for marginal projects in
> marginal areas.

But, don't forget that those giveaways will have an upward effect on the medians... it is a way of "hiding" the discount...

"Buyers are in denial for paying today's prices and sellers are in denial for asking today's prices"

a stroke of genius

I'd say that was right on a few months back.

Prices have come down, but not enough... but buyers certainly aren't paying today's prices anymore.... nothing is selling. Sales volumes have fallen off a cliff.

another stroke of genius

Any data on how many new apartments are coming on-line for purchase? That does not seem to be factored into much of the research. No one knows where RE values will head as far as loss in value but 40% does seem high. Data suggests more of a reversion to 2002-2003 values due to the new credit rules.

> another stroke of genius

Compared to what was said just a few months back, it certainly is.

> Data suggests more of a reversion to 2002-2003 values due to the new credit rules.

What data?

A true stroke of genius

http://www.nbc.com/Saturday_Night_Live/video/clips/vp-debate-open-palin-biden/727421/