how did lofts do last quarter compared to overall market?

a third set of impressions of the First Quarter
Having sniped at the media narrative (April 2, first impression of First Quarter reports) and then having psycho-analyzed the Big Firm reporting styles (April 5, second impression of First Quarter reports) it is (finally!) time to actually look at the numbers reported in the market reports for Manhattan real estate in the first quarter of 2010, with the expected focus on loft data. The short story: the loft niche moved with the overall Manhattan market, but took longer to sell and showed a greater shrinkage of inventory; more or less.

The two tables below break out the (limited) loft-specific data from the three major firms that do quarterly market reports for Manhattan real estate and then provide some (deeper) overall market data from these three firms and from StreetEasy. [Links to the reports are here (Miller Samuel), here (Corcoran),  here  (Terra; the Halstead version), and here (StreetEasy).] That April 2 post noted the challenges to doing any coherent analysis when data differ between firms, so please don’t expect concise or brilliant prose.

same-firm trends

As always, The Miller provides the best sub-set of data regarding Manhattan loft transactions. Staying just in Miller World for the moment, the price data comparisons are sloppy, with lofts having taking a bigger hit on median sales price than the overall market, but with price-per-foot averages moving similarly for lofts and the overall Manhattan market. That suggests to me that the median price difference is more a matter of the mix of lofts that sold being smaller this past quarter than a year ago. Recall that I quoted The Miller yesterday about the volatility in different price indicators (average or median sales price, price-per-foot):

So … the loft niche is in sync with the overall Manhattan real estate market, at least in Miller World. In that world, lofts took rather longer to sell than "apartments", and did not show the same improvement in the Days on Market metric as the overall market. I suspect that this is a "small n" problem, with the relatively small number of loft transactions leading to greater volatility in this metric than in the overall market, as opposed to there being something about lofts this past quarter that made them harder to sell.

arithmetic error?
I am checking with The Miller about an apparent inconsistency in his loft numbers. On the one hand, his tables show loft transactions in the First Quarter as 180, compared to 2,384 in the overall market. On the other hand, he has a lovely nugget in his text about lofts:

There were 180 loft sales in the first quarter, representing 11% of the overall market sales activity and consistent with the 10.5% market share for lofts over the past decade.

But … 180 loft sales are only 7.5% of the 2,384 overall transactions, so either I am missing something or The Miller made a calculation error. Putting that aside, the context that lofts have had a decade-long market share of 10.5% is a very useful nugget, indeed. (Note to self: perhaps do a ten-year recap of The Miller’s loft numbers?)

It is unfortunate that none of the other reports provide much loft-specific data. The limited Corcoran / Property Shark data on lofts show loft median sales pricing dramatically improved year-over-year compared to the overall market (at plus-25% vs. down-11%); on the other hand, the average price-per-foot for lofts in the Corcoran report moved in the same direction and at similar scales to the overall market (down-6% vs. down-10%).

StreetEasy does not break out loft data at all. The only loft data point that Terra tracks is price-per-foot, which is not a data point for the overall market in Terra’s reports.

cross-firm comparisons risk incoherence
There are only two data points on which more than one of the three firms report loft numbers, median sales price and average price-per-foot. With three sets of average price-per-foot reports, numbers from The Miller and from Corcoran are essentially identical, with Terra being tolerably within range. But the two median sales price numbers are so different that grinding and gnashing of teeth is inevitable.

Not only do The Miller and Corcoran disagree on the median sales price ($1.4mm vs. $1.75mm), they radically disagree on the year-over-year trend (down-32% vs. up-25%). The only explanation is both familiar and dis-satisfying: their data sets are different.

In such a world, it is a fool’s errand to draw any conclusions from inter-firm data differences. Sigh.

© Sandy Mattingly 2010