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Three Cents Worth: Manhattan's Seasonal Sales Heartbeat

[This week, real estate appraiser, Curbed graph guru, and podcaster extraordinaire Jonathan Miller checks Manhattan buyers for a pulse.]

There has been a lot of discussion about returning to a more normal (someone please define "normal") market as compared to the insanity of the past two years, and perhaps all of 2003-2007 for that matter. To explore this idea, I took the % market share of sales for each quarter and compared it to the other three quarters in the same year over the past two decades. For example, if the total sales for our four quarterly reports in one year was 10,000, and each quarter had 2,500 sales, then each quarter had a 25% market share. I presented this in two ways going back 20 years.

First as a "heartbeat" chart to illustrate the range of volatility; Second as a column chart to show the average, minimum and maximum market shares for each quarter. Admittedly kinda wonky, but here are some observations on the 20 years of data.

- The range is generally between 21% and 29% with a ±4% swing, which is surprisingly tight. Suburban markets in Long Island, Westchester and Fairfield show much more significant swings by quarter. No empirical basis for the range (shaded area) in the chart, it just seems reasonable, visually. The frequency of exceeding the range (i.e. volatility) expanded in 2007 with wild swings in 2Q '08, 1Q '09, 4Q '09 and 1Q '10.

- Since 4Q 2010 doesn't finish up until the end of this month, I estimated the market share for the 4th quarter based on what data I have already collected.

- Second and third quarters see the largest market share on average. First quarters are slightly lower than fourth quarters since this data represents closed sales.

- The lowest market share was 16.1% in 1Q 2009, just after the Lehman tipping point. What, people weren't in a buying mood?

- The highest market share was 33.3% in 4Q '09. The record high and low occurred in the same year showing just how volatile the swing in demand was and how seasonality was glossed over.

Since the largest market-share swing of the last 20 years occurred in 2009, it is no wonder the current market with less volatility is being described as a "normal" market. It's not clear whether we will see more typical seasonality in 2011, but I doubt we'll be seeing 2009 anytime soon.
Manhattan Sales Market Share/Quarter [Miller Samuel]
·Three Cents Worth archive [Curbed]