it's the demand, stupid / Manhattan Q3 market numbers


not supply, but demand
I usually focus on the inventory number as a key number in any Manhattan real estate market reports, but the inventory numbers this quarter are overwhelmed in significance by the demand number — the raw number of times a willing seller found a willing buyer, regardless of price (though prices clearly are not coming down on any broad basis).

Check out the number of coop or condo sales in
Manhattan by quarter, as reported by Miller Samuel.
Q4 06
2,441
Q3 07
3,499
Q3 06
2,113
Q2 07
3,939
Q2 06
1,934
Q1 07
3,474
Q1 06
2,005

I will do the math for you. For 2007 through September 30 there have been 10,912 sales, which is nearly 15% more sales than in the highest full year to date.

1999
9,522
2002
9,509
2000
9,184
2003
8,802
2004
8,653
2006
8,493
2001
8,198
2005
7,780
1998
7,646

I considered that the 2007 numbers are skewed for some reporting reasons, but cannot think of any reason why they would be. (According to a blog conversation I recall with Jonathan Miller, there was a reporting irregularity when the city started reporting closed coop sales on a real-time basis, but I recall him estimating that such an effect would be felt in the fourth quarter of 2006 and the first quarter of this year.)

Absent another explanation, the reason for the increase in transactions has to be the simple one — many more buyers than previously find
Manhattan apartments desirable at the high prices that have been recorded.

I will leave it to some possible future post about why this is the case.

As always with any backward-looking analysis, the question what happens next? is both looming and unanswered. Yes, the liquidity crisis elephant is still in the room and may already be impacting Q4 transactions. No way to know now….

© Sandy Mattingly 2007

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