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Three Cents Worth: The Rich Inherit the Market

[Every week Jonathan Miller bring us graphic joy. And today, friends, is no exception. The chart below looks at the percent of luxury sales (orange) to aggregate sales (green) in the Manhattan market. Click on the image to expand.]

This week (I am on vacation but can't stop thinking about charts) I wanted to see how much the luxury sector contributed to the overall real estate dollars. In other words, how important was the luxury sector to the overall real estate market engine, or as a commenter last week called it, "The Real Estate Industrial Complex" (I love that). I define "Luxury" as the top ten percent of all co-op and condo transactions in a given quarter.

The green line is a less important feature in this illustration and simply shows the total aggregate dollars for each quarter, not just the luxury sector. I define velocity as the aggregate total of all co-op and condo sales for each quarter. It has been adjusted for CPI and despite fluctuations, has been trending upward over this 5-year window.

The orange area is the primary feature of the chart and represents the percentage of total dollars for each quarter that are attributable to the luxury sector. There was a spike in luxury contribution in the most recently completed quarter. This shows that 10% of all sales accounted for a record 44.3% of all sales dollars.

The chart suggests how critical the luxury sector is to the NYC real estate engine and demonstrates how potentially vulnerable city revenues are from the residential real estate sector.
· Percent of Luxury Sales Dollars v. Overall Velocity [MillerSamuel]