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In a Sea of New Development, NYC's Resale Apartments Are Having a Moment

Real estate guru Jonathan Miller is back with a column about New York's resale market

A whole 22 percent of Manhattan real estate is new development, but it's probably time to give that obsessive focus of ours a rest and look at the other 78 percent of the market: resale apartments.

Since the 2008 financial crisis, one of the key characteristics of the Manhattan resale apartment market has been its lack of inventory. Resale inventory peaked in April 2009 at 7,980 listings, but then went into a freefall, landing at 59 percent, or 3,271 listings, in August of 2013. Now, something interesting is happening: resale inventory for May of this year is up nearly 31 percent from the May low seen in 2013.

This pattern runs parallel to the national market and helps drive housing prices higher. From 2013 to 2015, resale inventory expanded, but has remained below the average monthly level since 2009. (That was the year I began parsing out inventory on a monthly, and not just quarterly, basis.)

For the last three years, the resale market has traced a predictable pattern. The number of resale apartments in the first half of the year has remained consistent while an influx in supply is observed in the fall of each year.

But 2016 has shown a new pattern with a lot more resale supply entering the market in the warm months. This is probably due to a combination of a slower sales pace, rising housing prices that are coercing people to sell, and the fallout from 2015's feverish bidding wars.

But it may also be due to the uncertainty of a new market and the fact that it's a federal election year, provoking memories of 2012 as well as international and U.S. economic uncertainty that's causing more owners to list in an attempt to cash out.

You heard it here first: the go-to description of a market with tight supply is officially dead.