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Three Cents Worth: Manhattan's Thanksgiving Listing Spread

[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller is ready for some turkey.]

I started off trending the month-over-month percentage change in doorman (green line) and non-doorman (orange line) listings and they showed a very similar pattern [yawn] so I left the lines alone and looked at the larger pattern of peaks and troughs in listing activity at the end of the year. I've been tracking listing trends for more than a decade on a quarterly basis but only on a monthly basis since 2008 so I can't go back pre-Lehman. I am especially interested in each fall market's second sales hump (spring is hump number one) of the annual two-hump sales camel that occurs before the Thanksgiving holiday.

Beginning with Labor Day and peaking in October (blue column), listings generally spike to their highest level of the year only to collapse to their lowest level of the year in December (pink column) after the Thanksgiving holiday. Over the past four years we've seen the trough remain constant year to year (pink arrows) but the peak has recently expanded until the past two years (blue arrows).

Now there is a compression or reduced volatility of listings?in other words, there are fewer properties on the market.

Possible 2013 listing scenarios:

1) Same or fewer listings: Inventory continues to remain at low levels and we don't see a lot of new inventory come on in the spring = prices rise.

2) More listings: If you believe that listing volume was held back because of the uncertainty of the election and if the "fiscal cliff" is given a palpable band-aid, we could see listing volume rise next year as some of the variables have been handled.

I'm inclined to go with the first scenario even though I think we did see some hold back of new listings from the election effect, the possible expiration of the Bush era tax cuts (i.e. capital gains) and the "fiscal cliff." I am more skeptical about the second scenario because I think a large portion of the hold back of listing volume is due to low or negative equity. Sellers, when they sell, become buyers. If a seller doesn't qualify for a mortgage if they are trading up after they sell, then they would not likely sell and not enter the market. Low inventory simply isn't being caused by heavy sales volume working off supply in the past two years. This drop is happening in nearly all US housing markets so it's more likely related to credit, which is more of a national market, unlike housing.

I'm going with a third scenario:

3) Listing sandwich: With fewer listings, you can still stack that post-thanksgiving sandwich high with plenty of turkey and stuffing?don't forget extra horseradish and cranberry sauce.
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]