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Three Cents Worth: Manhattan Market Tighter for Rest of Us

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[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller thinks about how the other 90 percent lives.]

Back from a too-short vacation and thought I'd veer away from luxury marketspeak and focus on "non-luxury"?that little 90 percent of the market that doesn't get enough attention. Today there's a story out on the Manhattan "non-luxury" market using the data in these charts. It basically shows that when you remove the top 10 percent of the market from the housing data, pace of absorption and collapse of inventory is much more severe than when presented together.

The top 10 percent or luxury market has started at about $3M for the past four years. Despite all the attention it is getting, the upper end of the Manhattan market has seen less of a decline in supply and a slower pace (relative to the 90 percent).

In the year-over-year percentage change chart, you can see how luxury inventory has slipped only 3.9 percent over the past year while the remainder of the market has fallen 37 percent over the same period. New development is largely only targeting the luxury market.

In the monthly absorption rate by apartment size chart, studios through three-bedrooms are in sync, moving at a blistering five-month pace (nine-months is the long-term overall market average), while 4+-bedrooms have a much slower rate of 15 months.

It's not good news for buyers. The hope is that rising mortgage rates, while knocking out some from qualifying, will reign in some of the froth and help credit ease over the next few years.
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]