Q1 Manhattan market reports highlight high prices + major caveats

The Market of high prices and confusing numbers
Enough about me! Let’s talk about what I think about the Manhattan market reports for the first quarter issued by the major firms that got so much media play last week….

As typified by the NY Times article 4.2.08, the big numbers for media chewing were prices and volume. With an impressive attention to detail, all the reports agreed — and most of the media reported — that prices were up compared to one year earlier, and all agreed that some of that was due to closings at 2 new construction condos, 15 Central Park West and The Plaza. Many media reports tracked the Miller Samuel "however" comment, as stated in the MS headline to the report: "jump in pries as number of sales decline" (they report a 34.3% decline in the number of transactions YOY).

Jonathan Miller collects the news reports in the post on his Matrix that introduced the Q1 report, where it is easy to click through to see how the MS numbers were reported in different media.

getting behind the sales numbers
The three major reports (see the Miller Samuel Q108 report, the Halstead [Terra Holdings] Q108 report, and the Corcoran Q108 report) are in general agreement that prices in the quarter were up YOY (from 9% to 13.2%, for the median price), but they are maddeningly different about the base lines:

Interesting that the two firms that report median sales price for lofts showed year-over-year declines but also (joined by the third firm report) an increase in average price per loft foot. Logically, they found that the mix of lofts sold changed from somewhat larger lofts a year ago to somewhat smaller lofts in this past quarter.

I may come back to this price data another day, but I also want to address now the much more than maddening differences in the firms’ sales numbers.

why can’t we all just count along?
Curbed posted a small item yesterday about the differences between the Miller  Samuel number of sales for Q108 (2,282, down a sobering 34.3% YOY) compared to the Terra Holdings reported sales (2,857, down an exceedingly modest 1%). I posted a question this morning to Jonathan Miller on his blog about this, and will update this when (if) I hear an official explanation from the Miller Samuel ‘side’. But the Terra Holdings side is throwing some smack, if Curbed is accurately quoting an actual internal memo from the Chief Economist for Terra, Greg Heym:

One of the reports showed 2,282 closings, a figure we know to be incorrect. Our report was based on 2,857 closings, 99% of which were verified through public records available through the ACRIS system (the remaining 1% is through managing agents).

We understand that this discrepancy has caused some confusion, so please keep the following in mind when speaking with your clients and customers:

· Our report includes all sales in Manhattan which are verified by our Research Department either through the NYC Dept of Finance (using ACRIS), or by the managing agent of the building. Our market reports have never been based on only our company’s sales, and have always contained every public record available at the time the report was issued.

Therefore, our reports are the most comprehensive and accurate in the industry.

· The firm reporting the 34% decline in sales has not been able to explain why their report is missing almost 600 sales, which were available for anyone to view on the ACRIS homepage.

meanwhile, in a galaxy far far away…
It is clear that Miler Samuel and Terra say they are counting the same thing, and (if the Heym memo is authentic) that Terra Holdings volume number is "99%" based on city records on ACRIS. I assume that sooner or later Jonathan Miller will explain or reconcile the difference. But Corcoran’s report is from another planet on this number.

If by "absorption" (see p 3 of 6 in the Corcoran report), they mean "number of units sold" (what else could it mean??), Corcoran counts many, many, many more units as having sold in the first quarter of 2008 than either Miller Samuel or Terra Holdings. Adding together the monthly numbers, Corcoran says 4,072 units were "absorbed" Q108, down 38.9% YOY (even above the drop-off according to Miller Samuel). I don’t see a methodology section in the Corcoran report and have not found one on their website; if anyone can explain this, please….

I will hold off further analysis of the significance of the volume number at this point, hoping to get a reconciliation or explanation that makes sense of the differences between Miller Samuel and Terra Holdings. I have no hope of reconciling Corcoran’s number.