As we've been known to do, we pinged Jonathan Miller?real estate appraiser, Curbed graph guy, blogger, podcaster and, most importantly on this day, the man who prepares Elliman's quarterly market reports?for a chat about the latest Manhattan numbers.
CurbedWire: So what's the biggest piece of bad news?
JMillzInDaHouse: Well, it's more like, what are they key stats for the quarter. The news wasn't much of a surprise, its already a weak market
CurbedWire: give us the most soul-crushing stat
JMillzInDaHouse: Sales activity down 50.3% YOY
CurbedWire: now give us the most it'll-be-fine stat
JMillzInDaHouse: Man, you are all over the map here, ok
JMillzInDaHouse: Listing discount, the spread between contract price and list price improved over last quarter from 12.4% to 7.8%
JMillzInDaHouse: That means sellers are starting to price lower when apartment enters the market but its still way high. 10 year normal range is 2% to 3%
CurbedWire: So that's kind of like the reality check stat?
JMillzInDaHouse: Yeah - as that stat gets higher it means that sellers are chasing the market. Its falling faster than they can process
CurbedWire: How accurate are these numbers at reflecting the CURRENT market? Are they majorly lagging?
JMillzInDaHouse: A lot has been made of that, but there isn't a better way at the moment
JMillzInDaHouse: Closed sales absolutely lag the market, but contract data that is used and analyzed is random. So its not reliable
CurbedWire: Yeah, but since the market share of new development is way down, that means many of these sales may have been negotiated not long ago, right?
JMillzInDaHouse: Absolutely - thats why I break out new dev and re-sales. New dev has screwed up the overall numbers for three years
JMillzInDaHouse: New dev closings represent a meeting of the minds that occurred 12-18 months ago and random because it depends on what building mixes were at the time and how fast they were built
CurbedWire: so given the decline in new dev. closings, this could actually be the most "accurate" market report in a while, no?
JMillzInDaHouse: When looking at the total numbers - yes
JMillzInDaHouse: Lowest market share of new dev closings in a few years and the high priced projects like 15CPW and The Plaza are through the system
CurbedWire: How much of this sales uptick/green shoots chatter is spin?
JMillzInDaHouse: Look, we had a dearth of activity in the first 3-4 months of 2009. It was a late rally with a very busy May that got everyone jazzed.
JMillzInDaHouse: But really, this was a seasonal uptick combined with a release of pentup demand from earlier in the year
CurbedWire: So is this just the usual spring bump, or actual signs of some sort of bottoming/recovery
JMillzInDaHouse: Unemployment is rising, mortgage rates are rising, the economy is (maybe) still in recession. Hard to imagine we are done
JMillzInDaHouse: However, it may be that the worst is behind us
CurbedWire: Do you think the government released that terrible unemployment report today just to force more price cuts on new Williamsburg condos?
JMillzInDaHouse: Absolutely - it was a total scam.
JMillzInDaHouse: Remember, the world revolves around NYC. Curbed taught me that.
CurbedWire: give me one prediction for the Q3 market report
JMillzInDaHouse: It will be delivered after the end of the third quarter.
CurbedWire: STOP THE PRESSES
JMillzInDaHouse: I went out on a limb on that one.
CurbedWire: Do you ever get early copies of the other brokerages' reports, and then go back and change your numbers if they seem out of whack?
JMillzInDaHouse: Haha. I don't read the other reports when they are released. I am asked about them quite a bit when ours comes out during interviews but I'm not getting into a he said she said thing. I didn't write them so I don't know much about them. Plus, I see enough numbers with my own.
CurbedWire: on the night after the reports come out, do you all get together for a tall glass of scotch and swap war stories?
JMillzInDaHouse: No, I actually go home and hang out with my family and NOT talk about real estate. I'm boring that way. The last thing I need is my 10 year old asking me if first time buyers are going to continue to be a force in the market with mortgage rates rising.
· Curbed Roundtable: July State O' the Market Report [Curbed]