Ok, ok, this week's chart is admittedly a little weak on causality, but it's a fun diversion. I was reading an article the other day about the increase in the number of Realtors over the past decade and was struck by how familiar the actual numbers looked. The pattern was roughly $1 of Manhattan price = 1 NAR member for the past 17 years. So I plotted NAR national membership (pink line), versus the average sales price (cpi-adjusted) of a Manhattan co-op and condo (blue line). They trend together nicely so I inserted the number of sales (yellow columns) in Manhattan to see if there was a pattern as well. There wasn't.
NAR has light representation in Manhattan but it would be interesting to see if there was a similar pattern with the number of Manhattan real estate agent licenses versus pricing or the number of sales. The low barrier to entry to the profession on a local level should mean that the number of agents should ebb and flow with the number of sales and not price levels. A year ago there were about 27,000 licensed real estate agents in Manhattan which worked out to about 1.4 agents for every sale.
This means that the average agent doesn't do as well as everyone thinks (although a very large number of those licenses are simply "parked"). NAR reported a 1.6% drop in membership from January to February of this year, an unusually large month over month drop. What does this mean for Manhattan prices? Hmmmm. I wonder.
Something to think about: So it follows that for every dollar increase in cpi-adjusted average sales price in Manhattan, there could be one more Realtor somewhere in the US showing properties, running ads, tying balloons to open house signs, closing the sale, talking about the market, branding themselves, using their cell phone to call in an offer, and many other things I am sure Curbed readers can come up with.
So if you happen to renovate the kitchen of your Manhattan apartment and then sell it this spring, you could be adding new Realtors to North Dakota.
· National NAR Membership vs. Manhattan Avg. Sales Price [Miller Samuel]