Q4 reports coming in / demand continues
2007 record, but demand slowed
The big story for me in the last round of quarterly market reports for Manhattan coop and condo sales was that demand remained at historical highs for each quarter of 2007 (by then). The new numbers for the 4th Quarter of 2007 show that demand slowed from the way-beyond-record pace of the earlier part of the year, but was still at a historically strong level.
Here’s what I said on October 3 (it’s the demand, stupid / Manhattan Q3 market numbers), when playing with Miller Samuel’s report of the number of transactions:
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).
At that point there had already been 15% more sales of Manhattan coops and condos than in any prior full year. Now I can complete the table I started then:
|
Q4 07
|
2,518
|
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
|
Yes, that number of transactions in Q4 is way down from each of the prior three quarters, which has to mean the velocity of the market was not sustained. But that quarter represents more closed transactions than any quarter in the last ten years, save two: there were 2,842 in Q2 2002 and 2,533 in Q3 1999. As I noted on October 3, 1999 year was the busiest year before 2007 (at 9,522), and 2002 was the second busiest year (at 9,509). 2007 closed at 13,430 transactions – a huge year.
Of course, what I said in October is as valid today:
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….
Put the potential for a recession on that elephant’s back, and we will still be looking forward to what happens next?
Personally, I am looking forward to having some hard inventory numbers to chew on in the nest day or two.
© Sandy Mattingly 2008
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