Manhattan loft market outperforms in volume (big) + absorption

nice (rare) consensus among firms!
Yesterday I beat up a little bit on Vivian Toy’s traditionally formatted New York Times article about the 4 major quarterly Manhattan real estate market reports for the Third Quarter and a bit more on the brokerage part of the Manhattan Real Estate Industrial Complex for its willingness to make predictions of “recovery, or “bottom”, or “normal” (Oct 1, why the race to (call) the bottom? third quarter Manhattan real estate market reports hit).

In today’s episode, Manhattan Loft Guy finds a pleasing consensus among the major firm reports about what happened last quarter in the overall Manhattan market, and explores the ways in which the Manhattan loft niche outperformed the overall market. (There’s also a rant or two, and an idea for more interesting loft data!)

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. [The Links: Miller Samuel report is here; Corcoran is here; the Halstead version of the Terra report is here; StreetEasy is here.] Even though I am often critical of the news articles about quarterly market reports, I have also noted the challenges to offering coherent analysis in our Wild West in which data differ between firms, so if you are looking for concise or brilliant prose, avert your eyes….

Loft data from the Third Quarter 2010 Manhattan real estate market reports, with year-over-year comparisons

  median sales price avg price per foot transactions days on market inventory
Miller Samuel $1.66mm [up 10.7%] $1,091 [up 6.2%] 190 [up 53.2%] 104 [down 24.1%] 521 [down 16.4%]
Terra Holdings   $1,077 [up 12%]      
Corcoran $1.775mm [up 18%] $1,119 [down 2%]      

Overall market data with year-over-year comparisons

  median sales price avg price per foot transactions days on market inventory
Miller Samuel $914k [up 7.5%] $1,095 [up 10%] 2,661 [up 19.3%] 125 [down 25.5%] 8,123 [down 3.2%]
Terra Holdings $890k [up 14%]   2,471 [up 4%] 97 [down 24%]  
Corcoran $900k [up 9%] $1,046 [up 2%] ~3,000 [down 5%]   9,243 [down 4.9%]
StreetEasy $875k [up 14.4%]   ~ 3,350 [up 1.9%] 123/113* [down 17.5%/19.1%] [down 6.5%]

*If StreetEasy has an overall market number for DoM, I didn’t find it; my table has Condo/Coop numbers (how awkward!)

Without going all anal on you, I can’t recall another quarterly market report in which the same-firm trends for the overall Manhattan real estate market matched so well. On median sales price, days on market, and inventory, all reporting firms report within a tolerably narrow range. Looking only at direction (not scale), there is only one arrow pointing a different way: Corcoran shows transaction volume down, while the other 3 reporting firms show a year-over-year increase in the number of transactions.

caution: Habitual Rant ahead
I have to point out the obvious here, sorry …. In what kind of rational market can the “simple” act of counting What Is For Sale come up with answers as variable as 2,471, 2,661, 3,000, and 3,350?? What is so frigging important to these firms about their own frigging numbers that they can’t see the importance of standardizing method to avoid being laughed at (by whatever small percentage of the consumer population that actually takes these reports seriously) because there is a 36% spread between the High and Low counts?

Yes, these numbers are all produced by professionals. And, yes, each firm believes in its heart of hearts that it has the best method. Probably, each firm believes that its method is “better” because of its proprietary advantage in data collection / data massaging / data interpretation.

Memo to brokerage firms: (educated) consumers don’t believe you. At least in part, they don’t believe you because you don’t agree.

a Modest Prediction
Sooner or later, StreetEasy (or something like it) is going to come up with a format that is sufficiently acceptable to (educated) consumers that its report will gain credence as the (only) objective report out there. At that point, essentially no one will pay attention to the (oh so expensive to produce) Proprietary Reports.

Obviously, Property Shark is betting the other way, as it allied with Corcoran (last year? in 2008??). I imagine that relationship has a contract term; I wonder how long it is , and whether The Shark will want to renew. Similarly, The Miller made a deal with PruDE way back when (when there was no dried fruit in DE); I wonder if he worries about whether that relationship diminishes his credibility in The New World. (Note that both the New York Times article and the Wall Street Journal article about the major firm reports now include citations to StreetEasy.)

UrbanDigs see this opportunity, clearly, but his approach is different from any of these reports: Noah wants to track a whole bunch of metrics for real-time trends. He is not so much competing with the major firms as playing a different game.

lofts (finally!)
Let’s get back on track here …. As I noted so far up top that it in the title of this post, the reported loft numbers show that this niche outperformed the overall Manhattan real estate market year-over-year in two metrics: transactions (volume) and inventory change (absorption). I scan the other metrics as roughly similar, overall market to Manhattan lofts.

I suspect that the first number is more due to the inherent volatility of Small Numbers (a niche is a niche), but that the second may be more significant. Which leads me to An Idea … I should track both Loft Transactions and Loft Inventory as a percentage of the overall market! (Meaning, I should re-frame The Miller’s numbers to calculate something he is not especially interested in.) I am inclined to think it will be less interesting to re-frame the median price data in this way, but let’s see what I think when I get around to actually doing this …. (Weigh in, you Manhattan Loft Guy Readers, if you have a preference.)

© Sandy Mattingly 2010



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