Parsing the Manhattan Housing Numbers (Or: Why Quarter-to-Quarter Is What to Watch)

Mild schadenfreude greeted the Bloomberg News story this morning that Manhattan home sales dipped in January and February compared to the same time period last year. See the thread of comments on Curbed here.

But a closer look at the perfunctory numbers reveals… what exactly?

The big take-away from the article is that sales declined an estimated 6.4 percent from the same time period in 2007, and inventory of unsold homes on the sales market climbed 15 percent over 2007’s January and February. In short: Year over year, sales dropped and inventory increased.

But! Annual declines like this aren’t unheard of in first quarters. For instance, condo and co-op sales dropped 11.2 percent from the first quarter of 2002 to the first of 2003, according to appraiser Miller Samuel, which produces a quarterly market report for brokerage Prudential Douglas Elliman. Sales also declined annually between the first quarters of 2003 and 2004; and of 2005 and 2006. Plus, the beginning of 2007 was one of the strongest periods ever for Manhattan home sales. In the first six months of that year, 7,413 condos and co-ops traded, a number comparable to many annual totals. (As for the rising inventory, that’s likely a function of the new condos coming online.)

Also! Prices were up from January and February of 2007 to the same period this year, according to estimates in the Bloomberg News article. At the higher end, the price increases have likely been steeper (all those 15CPW and Plaza closes no doubt).

Market reports for the first quarter of 2007 will be out in the next couple of days, and it’s important to remember how slowly the Manhattan market is turning (and it is turning–make no mistake about that). The stats to watch would be the quarter-to-quarter sales and prices; if those show incremental declines (or sharp ones!) then it’s time for the post-mortems on the Manhattan boom.

Until then, it’s just reading declines into numbers that otherwise show a historically healthy market. Parsing the Manhattan Housing Numbers (Or: Why Quarter-to-Quarter Is What to Watch)