Out of respect for International Talk Like A Pirate Day I thought I'd comment on housing metrics that would provide seaworthy analogies to prepare us for the next round of Manhattan housing market reports (i.e. our 3Q 2012 market reports we'll be publishing with Douglas Elliman) in less than two weeks when the quarter ends.
For this edition of 3CW I matched up Manhattan co-op/condo absorption rates and the year-over-year change in median sales price of the last decade. Absorption covers sales and listing trends and prices cover, well, you know what they cover. For the purposes of my analysis I define absorption as the number of months it would take to sell all active inventory at the current pace of sales.
The notations on the chart are self-evident but I'd like to point out the stability that has existed in supply and demand since the credit crunch began. However since Q2 inventory continues to fall faster than sales are rising. Now that most of the post-Lehman new development shadow inventory has been worked off, total inventory is unusually tight - and mortgage rates continue to fall - this may cause prices to edge higher in certain segments over the coming quarters from this unusual combination, i.e. the entry and the luxury markets in particular.
Bernanke has telegraphed the continuation of low rate monetary policy at least through 2015.
Housing Piracy (hey I have to get the word in this post somehow): When housing prices rise based on artificially low rates and artificially low inventory caused by tight credit (and artificially low rates). Arrrrgh.
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]