We prepared Prudential Douglas Elliman's 1Q 2009 Manhattan Market Overview, released today, and the results essentially confirmed the market correction that occurred immediately after the September tipping point (Lehman bankruptcy, AIG, Fannie and Freddie bailouts). For re-sales, prices were down roughly 20-25% and sales activity was down by roughly half as compared to the same period last year. No big surprise there.
Since the disparity between new development and re-sale basically skews the overall market trends, I began separating them in the reports (about a year later than I intended). Here, I thought I’d take a look at new development and re-sale by price-per-square-foot (columns) and number of sales (lines) to see how they compare.
Re-sale activity is pretty volatile and peaked sharply in 2007. New development closings followed a similar pattern but at a lower level. In periods with bloated inventory levels like 2006 and now, re-sale activity is much more elastic. It's amazing to me how re-sales and new development closings are nearly identical right now.
For PPSF, the spread between re-sale and new development was most pronounced in 2004/2005 and 2007, periods of frenzied activity. Not sure that makes sense to me since new development closings lag the market 12-18 months.
· Manhattan Co-op/Condo New Development vs. Re-sale, PPSF v. Number of Sales [Miller Samuel]
· Three Cents Worth archive [Curbed]