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Manhattan Market Sort of Feels Like 2004

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[This week, real estate appraiser, Curbed graph guru and podcaster extraordinaire Jonathan Miller just isn't content with merely two reports per day.]

Click to expand!

Although we released our Brooklyn and Queens reports today, I wanted to provide perspective on where housing prices are in Manhattan relative to previous years. Aside from being asked whether the Jets will win this weekend, the most asked question I get is something like, “What year are current Manhattan housing prices equivalent to?

I presented the average sales price (red line) adjusted for inflation back to 2000, along with co-op/condo listing inventory (gray columns). I selected average sales price over median sales price simply because it was more volatile and would show some of the crazy highs we saw when new development surged. In other words, it's a roller-coast-like line (median gets to the same place in a smoother fashion). Incidentally, the surge in the first quarter of 2009 was all about new development closings which reflected market conditions 12-18 months earlier and demonstrates the significant lag and skew that new development creates in housing data?primarily because new dev closings were a random event during the boom, determined by when construction was completed during the boom.

In the fourth quarter of '09, new development contributed to 19% of the closings (a large portion of which likely went to contract pre-Lehman tipping point). In 4Q '04, market share was also 19%, actually 19.4%. Market share for new dev closings peaked in 2Q '06 at 57.6%.

The blue ovals represent the general area where both indicators are relatively similar. However there is one big difference: In 2004 the Manhattan market was in the middle of one of the largest housing (technically credit) booms ever seen in NYC, and today we are still in a period of unwinding. Still, this analysis answers the question about the Jets this weekend.
· Manhattan Inflation-Adjusted Average Sales Price v. Listing Inventory [Miller Samuel]
· Three Cents Worth archive [Curbed]