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Three Cents Worth: Manhattan Post-War Listing Compression

[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller ponders the possibility of time travel.]

Although my regular Tuesday deadline for my column has long passed me by I wanted to get one more Three Cents Worth column finished before the upcoming release of the Elliman Report for Manhattan sales on Tuesday. Since listings have been in free fall, I thought I'd look for any patterns (hey this is Curbed and I needed an excuse to apply shades of purple to a chart) and I found one that surprised me a bit.

I parsed out the market by pre-war and post-war listings. I defined what each means on the chart itself but it's simply using the year 1945 as the dividing line for post and pre. Post includes new development (I know, I know) but I was most curious about what pre-wars were doing, especially co-ops. Admittedly listings in buildings constructed in the past 10 years are very different than "wedding cake" style properties along the avenues, but I don't have a practical way to capture the difference in bulk at this point.

While I have been recording listing metrics on a monthly basis for more than a decade, I began tracking the data weekly after Lehman. The trend for both types are very different.

Pre-war: They have remained remarkably stable for the past four years, hovering around 3,000 units. It's a fixed form of housing stock (unless you can go back in time and build one). After Lehman, pre-war apartments along Park (mid-priced) seemed to be particularly vulnerable as many of those buyers no longer had access to the same credit standards. But I'm still not fully clear on why, in an era of declining inventory, pre-war supply remains much more stable (yes, they declined a bit in the past year).

Post-war: These are where the action seems to be. Post-war listings have fallen about 50 percent since Lehman and the spread between the two groups is narrowing quite a bit. Some of the causes of the disproportionate drop are the absorption of newly constructed (or fairly new) condo listings to foreign buyers and entry-level post-war apartments to first time buyers. I'd argue that the current market snapshot is closer to normal than the 2008 snapshot since the market was stalling back then, especially new development. The foreign buyer surge helped work off the active and shadow inventory over the past several years.

On a side note, many of the amenities in new developments are now "pre-war"-like (ceiling height, quality, sound proofing, etc.) so you could argue that a lot of the new housing stock could be reclassified (think "pseudo pre-war").

Or they went back in time to build them.
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