Next Tuesday is April 1, and the first-quarter housing market reports for Manhattan will start trickling out from brokerages like Halstead, Corcoran and Douglas Elliman. What will they say about home sales?
No one knows for certain, of course, but the speculation should pick up noticably in the next few days so here goes:
The first quarter of any year is usually relatively paltry in terms of the number of closed deals because those deals were cut in the winter months, which are normally among the slowest in Manhattan housing.
What will be interesting about this particular first quarter is that it fell smackdab in the middle of a tangible melt down in the Manhattan economy. January and February were the months of investment bank write-downs and a dip in the amounts of year-end Wall Street bonuses as compared to preceding years. They were also the months (and March has been so, too, so far) of volatility in lending, whether it be for commercial or residential mortgages. And, of course, they’ve been the months that saw the run-up to and the actuality of the Bear Stearns collapse, which could ultimately send thousands of New Yorkers to the proverbial breadline.
Still, I wouldn’t expect a tremendous drop in Manhattan home sales in the first quarter. Again, the winter months are slower so no one has huge expectations. But the symbolism of any drop—especially one from the first quarter of 2007—could be tremendous.
Why? Because all the bad economic news you’ve been reading and hearing is supposed to have at least an indirect effect on housing sales. So far, it hasn’t really, not in Manhattan. In 2007, for instance, the island cleared 10,000 home sales, a milestone not reached since at least the 1980’s.
But everything’s connected, especially the financial services industry to Manhattan housing. It’s only a matter of time before we have a quarter to truly remember, the sort that offers a clear demarcation between good and bad times.
So, if the first-quarter reports out early next week do show a sales decline, expect wringing of hands and connecting of dots: The bad news will have finally caught up with the mighty Manhattan housing market.