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Three Cents Worth: Inventory Upside Down

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[In this week's 3CW, graph guru Jonathan Miller gives us his State of the Inventory address.]

[Click to expand.]

Over the past year, condo inventory levels have exceeded co-op levels as new developments (nearly all condo) continue to enter the housing stock at a steady clip. Residential development permits dropped sharply in 2007 and the expiration of the 421a abatement program on June 30th may choke off the high level of supply entering the market in 2009. So far, the elevated level of demand has kept inventory at modest to low levels.

The total number of listings has increased 9.9% from the end of December 2007 to the End of January 2008 (yesterday). Inventory tends to rise at the beginning of the year as sellers anticipate the upcoming spring market. The same period in four of the past five years has seen an increase in the number of listings:

1 Month Change (Dec-Jan)
2003, +2.3%
2004, -10.8%
2005, +16.9%
2006, +4.2%
2007, +9.9%

Clearly condo inventory is higher than it was two years ago, but co-ops are near the six-year monthly low since I began to capture this data. In fact, co-ops are 39.9% below their high in March 2003 (Just as the Iraq War broke out) and condos are 23.5% below their recent high in September 2006. Currently, overall inventory is consistent with levels seen in 2002/2003, which is contrarian to the increase seen in many metro area markets around the country at this time.
· Manhattan Co-op and Condo Listing Inventory [Miller Samuel]