We've been waiting on October's Luxury Letter?the monthly high-end market update prepared by Leonard Steinberg, Hervé Senequier and their team at Elliman?because while all those positive numbers for Quarter 3 were encouraging in light of all the mortgage/credit problems, they were inflated by deals that were agreed on in Q2, but not closed until Q3. Now we have some August and September sales intel, and it's an ugly sight.
The Elliman gang divides transactions into five categories of "luxury," from $1-$2 million smaller apartments up to big, single-family townhouses. When you total up the numbers for August, you get 371 sales. In September, that number is just 113, a sharp 70% drop. The $1-$2 million "Min/Luxe" sales dropped to 59 in September from 218 in August, and the $2-$4 million "Mid/Luxe" sales went from 115 to 34. Shocking stuff, and Leonard Steinberg isn't trying to spin it any other way:
Yes, the 3rd quarter was a strong one, but September was simply bad. And yes, overall if the entire year were calculated to-day, it has been a very strong 2007. We have always stressed that the most accurate assessment of the real estate market lies in signed contracts....many closings that are registering now went to contract months and years ago! We predicted this would happen.Usually it's the summer sales season that's slow when compared to the fall, but it looks like the luxury market has yet to get off the ground this season. Or maybe everyone who wants an apartment already bought one. Um, yeah.
· Luxury Letter [luxuryloft.com]
· Your Morning Credit Crunch: Manhattan Stays Bullish [Curbed]