[This week, chartman Jonathan Miller, expands on some of the numbers that got Matt Drudge all excited earlier this week. The chart below shows the relationship between the number of sales listings in the Manhattan market (in red) versus the average number of days on the market (in blue). The x-axis runs from the second quarter of '00 to the second quarter of '05. The y-axis runs from 0 to 8000 for inventory and to 200 for days on market.]
A bevy of numbers on the Manhattan real estate market was released by my firm on behalf of Prudential Douglas Elliman this past Tuesday and some of the more interesting numbers reported had nothing to do with price. Listing Inventory and Days on Market are two fascinating statistics that are often overlooked. By the way, the formal report will be available for download here shortly.
After the jump, why this is all just business as usual.
First, some definitions:
Listing Inventory: The number of new and re-sale coops and condos available on the market at that particular point in time.
Days on Market: The number of days between the last price change of a listing, if any, and the contract date. We use the last price change rather than original listing date because that captures how long an apartment takes to sell, once its priced competitively. This filters out all apartments that are over-priced, and which tend to distort the data. For example, if a severely overpriced apartment sat on the market for three years, it would not be representative of market conditions and should not be included in the data.?
Then, some observations:
It's apparent from this chart that the number of days an apartment takes to sell is reflected in the number of competitors it has (i.e., total listings). In 2005 as inventory expanded, the time it took to sell an apartment extended as well. The average days on market is currently 133 days, one month more than last quarter, which averaged 102 days. This is not uncharted territory by any means, but is more in line with levels seen in 2003. This trend is consistent with national housing patterns.
For perspective, an historic norm for days on market is about 120 to 150 days, meaning a market that is generally in balance. In 1991, during the dark days of the recession, it took between 180 and 270 days to sell a typical apartment.
· Listing Inventory vs. Days on Market [Miller Samuel]
· Enfin, La Deluge? [Curbed]