[You cannot put Jonathan Miller in a box! This week, our numbers guy breaks out the pie charts to examine the number of units sold in each of the last four fourth quarters by price: below $1M (green), between $1M and $4M (pink), above $4M (blue). Something tells us you may need a bigger version of these. Click on the image to expand.]
I thought it would be fun to simply compare the most recently completed quarter to the same period in each of the past three years to illustrate how rising sales prices have affected how many apartments actually fall below the $1M threshold. Ok, ok, I got a little carried away with the pie charts, but hopefully, it clearly illustrates my point.
In a rising market, the usefulness of categorizing markets by price is limited because price is always a moving target. This makes it particularly challenging to do useful historical comparisons if the threshold keeps changing. In the luxury segment of our quarterly market reports, we look at the top 10% of the sales. Admittedly this not perfect, either, but it does move with the market.
In 4Q 02, the share for apartments selling below $1M was 78%. The share of these apartments has reduced steadily from 76%, to 70% and now 64%. The $1M to $4M segment represents the majority of the new housing stock to enter the market over the past 4 years.
Even though its market share continues to shrink, 64% of all apartments to sell in Manhattan in 4th quarter 2005 were under $1M which contradicts the widely held notion that to own in Manhattan, you have to spend more than $1M, more than half don't. A bit simplistic, but I get to do pie charts.
· Number of Units by Price Strata [Miller Samuel]