first impression of First Quarter reports

what is wrong with that baseline?
I do feel badly for the reporters who have to summarize the major firm quarterly reports of Manhattan real estate activity, such as Christine Haughney in today’s NY Times, Slight Rise in Manhattan Apartment Prices in First Quarter, Data Show. With reports from Terra Holdings (Halstead and Brown Harris Stevens), Corcoran, and Miller Samuel for Prudential Douglas Elliman, there’s usually enough inter-firm variation to make a coherent narrative challenging even leaving aside the often incoherence of same-firm data comparisons. This quarter is no different.

I will dive into these reports to check how the loft niche data compares to the overall Manhattan real estate market, but my first reaction on reading the Times article is that the emphasis on 1Q10 vs. 1Q08 has the wrong tone for a piece to be consumed by readers who don’t follow real estate every day and by other media.

Of course one wants to compare the current market to The Peak, but if I edited the Old Grey Lady (ha!) I’d have pointed out how anomalous The Peak was, and probably compared the Manhattan Peak-to-now to national Peak-to-now numbers.

I would not have published this:

Apartments in Manhattan sold for an average price of $1.4 million in the first quarter this year…. That is well off the peak in the first quarter of 2008, when apartments sold for about $1.7 million. The 2010 price is a slight increase over the average price in all of 2009, when it was around $1.3 million. It might be some time, however, before the Manhattan real estate market returns to its frothy heights.

I think the tone of "well off the peak" (for the average price) is just wrong, when that 17.65% decline from two years ago is probably a much smaller decline from peak than most US markets.

I think the tone of "might be some time, however, before the Manhattan real estate market returns to its frothy heights" is wrong, because it implies that the "frothy" market is something that anyone wants to return to. That Peak has a lot of baggage. While I happen to believe that the availability of too-easy credit was more of a froth factor in other markets than it was in Manhattan, loose underwriting was a local factor, along with the Wall Street bonus boom and its myriad trickle down effects (which were more of a factor here than elsewhere).

Do cheerleaders in the Real Estate Industrial Complex yearn for peak pricing? Some do, absolutely. But no one will be quoted as saying they want peak prices and peak froth. (Unless they are even less tethered to reality than I think.)

Dottie: call your publicist
The template for these quarterly pieces in the NY Times is evident in today’s article. Start with some general trends (here, 2 paragraphs worth), then follow with an overall comment (here, Diane Ramirez of Halstead) and (nearly random) specific points citing the Major Firms. In that category, the Times quotes Corcoran data for relative strength in the 1-bedroom market and other Terra folks for the sparse $10mm market. Then, add another overall comment or two (here, from Corcoran and The Miller), dropping some more (nearly random) specific points (here, Terra data on sales volume, Corcoran data on bidding wars, and The Miller on inventory). You close with a capture-the-psychology quote from A Major Player (here, “The biggest complaint I’m getting from my brokers is ‘I need more property.’ ” )

This is actually brilliant in execution, in weaving in quotes and numbers from the three major reports and four major firms. For the average reader, this looks like a very comprehensive review of the quarterly data, glossing over internal firm report trends and inter-firm differences in data. That’s probably as much as one could hope for.

Unless you were an executive at Prudential Douglas Elliman.

I am not suggesting that anyone actually tracks who gets quoted (and how often), but … Terra got quotes from the heads of Halstead and BHS and from its chief economist; the head of Corcoran got quoted twice; The Miller twice, as well.  I understand that it is almost mandatory to quote The Miller in these pieces, given how successfully he has branded as The Go-To Guy for Manhattan real estate data and analysis. And even though he can speak "for" the report his firm does for Prudential Douglas Elliman, I was surprised not to see their executives quoted. Maybe Dottie Herman is out of town….

© Sandy Mattingly 2010