in praise of StreetEasy, not to bury it

much beleaguered, of late
I’ve been mulling over a post about the many and various changes to StreetEasy that seem to have dropped (thudded) into the lives of so many fans of the Manhattan residential real estate market, but that’s a long story so this won’t be that. Instead, I’ve too long resisted the temptation to use the StreetEasy Manhattan Condo Market Index. That ends today. The crunchiest broker in Manhattan crunching numbers has long been singing its praises, and using it as the one number that is the single best proxy for that foggy concept, The Manhattan Market. (That would be Noah at UrbanDigs, of course.)

I wish there was a link on the Index page describing the methodology (room for simple improvement, StreetEasy!) but my recollection is that the Index uses same-condo resales as its main ingredient, then adds secret sauce including a filter that screens out outliers. They rely on the large numbers to soften the impact of weird sales that are not so weird as to fit their definition of outliers, instead of, for example, screening out off-market transactions. Your mileage may vary, but Noah’s confidence in the Index speaks volumes for me.

Of course the Index is still there on the StreetEasy sales home page, but you have to scroll down quite a ways to find it; one more click will get you to the basic chart going back to 1995 with all the colorful squiggly lines for Manhattan overall, downtown, midtown, and the two uppers. If you find them distracting or irrelevant, click them off at bottom to get just the overall Manhattan lines. Hovering over the lines at any calendar point gives you the raw numbers (up top) with the Index Value (measured off a base value of January 2000 = 1,000) and sales volume by month.

Play with it any way you like, but some highlights for me follow. Hovering over the recent bottom in sales activity, you see that the fewest sales in the modern era were the 294 recorded in April 2009, aka The Trough. (Note that these cannot just be condo resales, but all [condo?] sales in Manhattan.) The lowest recent sales prices were in the 5-month sequence September 2009 through January 2010, holding at 1,800 to 1,801, and this Index value had not previously been hit since April 2005 on the long frothy march to increased values.

There’s some nice wiggling prose in the brief official description of the Index, with my italics for emphasis:

Our index gives you a feel for how the Manhattan Condo Real Estate market performed over the past 15 years. For each month since January 1995, we were able to estimate a rate of return for the Manhattan market as a whole, and used January 2000 as the base period with a value of 1,000.

I like the humble wiggling for its explicit acknowledgement that The Market cannot be described in one number, or even briefly. This simple point is often obscured in reports from the Manhattan Media Division of the Real Estate Industrial Complex and often ignored by people (civilians and “professionals” alike) who over-determine an analysis of a specific property based on Overall Market Data.

utility and limitations
Users who keep in mind that this tool gives only “a feel” for the condo portion of the Manhattan market will draw appropriately modest and provisional conclusions about the applicability of the Index to a particular property. Of course, I would prefer that an index like this include coops, since most old-school lofts are coops rather than condos, but I wasn’t invited to sit on their committee. I have a fear that the coop market would be shown to be a little more stable, as new development drove much of the market data since 2006 and new development tends to be overwhelmingly condo. I also have a fear that the most dramatic data comes out of the thinnest months; taking those 294 sellers who closed in April 2009, for example, pictures of these folks would be in a real estate almanac as “Desperate” sellers.

But I will take what I can get (especially once blessed by UrbanDigs, of course).

So … thanks to StreetEasy for creating (and maintaining) this tool. I will save my carping about the new StreetEasy for another day, after the thing has stabilized a bit more.