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Analysis & Research

New Yorkers Are Busy During Week So Big Snowstorms Need to Occur On Weekends

March 7, 2016 | 1:20 pm | fedny2 | Favorites |

snowstormCP
Source: Jackson Fine Art

Even though housing market talking heads are known for dramatizing the long term economic impact of a big snow storm, it’s basically a “snow ball’s chance in hell” that it has a lasting effect.

Given that it is early March and it is 54 degrees outside in NYC as I write this, it’s hard to think about snowstorms. However Mother Nature has a way of messing with us so I’m optimistic that we’ll get socked with at least one more big storm this month.

My friend Jason Bram, an economist at the Federal Reserve Bank of New York, was interviewed for his views on NYC snowstorms and their economic impact in Hey, Economist! How Well Do We Weather Snowstorms? He found that:

  • 81% of major snowstorms (over 15 inches dumped in Central Park) began on a Friday, Saturday or Sunday
  • there is no evidence that major snow storms disrupt the economy more than a few days.

In fact, the odds of repeating NYC’s snowstorm history is 0.2% or 500 to 1.

FRBsnowstorms

“The bottom line is, when you look at monthly or even weekly economic indicators, you rarely see a blip, even after the most severe blizzards.” —Jason Bram

This is why I go crazy at the beginning of every calendar year listening to housing prognosticators fret about severe winter weather having a far reaching long term impact on the housing market and the economy.

Consider this scenario by a couple looking to purchase their first home:

Tuesday
Husband: Hi honey, ready to go look for houses this weekend?
Wife: Yes, I can’t wait! We’ve been saving up for a long time and we are finally at the point where we can buy!

A big snow storm hits on Friday night…

Saturday
Husband: Ugh, this snowstorm is really bad. We’d better cancel our appointment with the real estate agent to view homes.
Wife: Yes, that’s a good idea. This is so frustrating!
Husband: I know! Now we have to wait another year!
Wife: I just can’t believe it. Just when we were ready to buy, a snowstorm hits and now we have to wait another year!

Of course you can see how ridiculous this scenario is despite my John Grisham/Stephen King – like story telling skills. These buyers will simply wait until the following weekend.

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Manhattan Monthly Absorption Rate – August 2015

September 22, 2015 | 2:07 pm | Charts |

8-2015Manhattan [click to expand]

Thoughts The co-op and condo market absorption rates for the $10 million+ market have slowed over the past year while the pace of the sub-$3 million remains extremely brisk. The $3 million to $10 million shows limited change and some stabilization.

Side by side Manhattan regional comparison:

August 2015 v August 2014
8-20158-2014 [click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. (I got tired of the red/gray look in 2014 so I changed it) The blue/red line shows the 10-year quarterly average for context. The pink/orange line represents the overall average absorption rate of the most recently completed month for that market area.

Definition Absorption defined for the purposes of this chart is: Number of months to sell all listing inventory at the current annualized pace of sales activity in our market report series.


Manhattan Market Absorption Charts [Miller Samuel]

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[Three Cents Worth #291 Ski] Aspen Sales at $10 Million and Above Stay Consistent

August 31, 2015 | 6:19 pm | curbed2 | Charts |

It’s time to share my Three Cents Worth (3CW) on Curbed Ski. Whether I’m on the trail, on the lift or in the lodge, I’m always taking notes with my gloves off.

Check out my 3CW column on @Curbedski:

Over the last decade, sales of high end Aspen residential properties have followed a logical flow, consistent with the overall U.S. housing market. Activity peaking in 2006; extinguished with the Lehman Brothers collapse in 2008; weakness in 2011; showing elevated levels over the past year; all tell the national real estate story. And recently…

3cw8-19-2015A10m
[click to expand chart]


Three Cents Worth Archive Curbed NY
Three Cents Worth Archive Curbed DC
Three Cents Worth Archive Curbed Miami
Three Cents Worth Archive Curbed Hamptons
Three Cents Worth Archive Curbed LA
Three Cents Worth Archive Curbed Ski

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Explainer: Three Ways to Look at S&P/Case-Shiller Index Results

August 25, 2015 | 2:00 pm | Charts |

I have a long history of dissing the relevance of the S&P/Case Shiller Index because of the 6 month lag and the slew of anecdotal link-the-dot official commentary associated with it that literally has nothing to do with the numbers generated (gasping for air). However I feel compelled to look at it periodically because it is part of the media’s monthly market report gauntlet.

The S&P/Case-Shiller Home Price Indices were published today so I thought I’d create a trifecta of ways to look at the same data.

Top Chart – This is the famous year-over-year % change view which I believe is the best way to look at the market and the scariest. They use the seasonally adjusted index and the non-seasonally adjusted index (so did I) but there is virtually no difference. Most news coverage of the index usually link to the press release which embeds this type of chart that uses all the broad indices: 10-city, 20-city and National. The 20-City has long been the primary index that was touted but the references in the media are shifting to the national index and that’s probably a good thing.

Middle Chart – This is the month over month version using the same data. Clearly the seasonal adjustment smooths out the line. However the non-seasonally adjusted versions shows a significant impact from the seasonal nature of real estate – in fact this chart shows that seasonal patterns are becoming more extreme since the financial crisis began. Originally the index was virtually all about the month over month results even though the featured chart was year-over-year. They have since moved year-over-year to the front of the press release and has already influenced the way the index is presented in the media which is good to see.

Bottom Chart – This is the only chart that uses the actual index numbers rather than percentages. It’s a sleepy pattern that seems to wash out seasonality a bit and shows the market in a less intimidating way. Ironically, the actual index trend is visually less interesting. Seems ironic.

8-25-2015CSI
[Click to expand]

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Record Queens Condo Prices: Bigger Than Crises in Greece, China

July 9, 2015 | 9:51 pm | delogo |

Rental_0615Douglas Elliman published our research today covering Queens sales, Brooklyn sales Westchester/Putnam sales as well as the rental market for Manhattan Brooklyn & Queens. You can download the reports and more at Douglas Elliman’s market report page.

Like last week’s Manhattan report, there were lots of records set and it wasn’t simply the influence of high end sales – prices were up across the board in most markets.

Incidentally, the Bloomberg News article that covered record Queens condo sales was the second most emailed story world-wide. It stoked more interest than the finance crisis in Greece and the recent Chinese stock market gyrations. Apparently only “investors with satellites” was a more popular read.

Idea (?) for next quarter: Talk about drones and investors in the Queens housing market.

2q15queensrptBLOOMBERGTERMINALS

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2Q 2015 Manhattan Sales Market Breaks A “Record Number of Records”

July 5, 2015 | 9:38 pm | Reports |

Manhattan_2Q15

Last Thursday, the 2Q 2015 Manhattan Sales Report we prepared for Douglas Elliman (part of the Elliman Report series I’ve been writing for 21 years) was published.

I spoke at length about the report in last Friday’s Housing Note: What Greek Debt Crisis? Manhattan Set A Record Number of Housing Records.

You might considering signing up for it. I clear my mind of all the housing clutter accumulated during the week into a thought piece that tries to make sense of what is going on. It’s got plenty of humor and sarcasm, but most importantly, it has plenty of understandable insights, data and charts.

housingnotes_logo

Sign up here as thousands of others have. It’s free and best of all, you’ll make me happy. Even better, if you like it, share it with others.

But I digress…

There were lots of Manhattan records set in 2Q 2015. Here’s a partial list I created for last Friday’s Housing Note: What Greek Debt Crisis? Manhattan Set A Record Number of Housing Records.

Co-op/Condo
Highest Average Sales Price
Highest Average Sales Price – New Development
Highest Average PPSF – New Development
Highest Median Sales Price – New Development
Highest Average Sales Price – Resales
Largest Average Square Feet – New Development
Highest 2-Bedroom Median Sales Price
Highest Median Sales Price 5th Quintile
Highest Median Sales Price 2nd Quintile
Highest Median Sales Price 1st Quintile

Co-op
Highest Average Sales Price
Highest Median Sales Price
Highest Median Sales Price – Resales
Highest Average PPSF – Downtown
Highest Median Sales Price – 2-Bedroom
Highest Average Sales Price – 2-Bedroom
Highest Average PPSF – 4+ Bedroom
Highest Median Sales Price 5th Quintile
Highest Median Sales Price 4th Quintile
Highest Median Sales Price 3rd Quintile
Highest Median Sales Price 2nd Quintile

Condo
Highest Average Sales Price
Highest Average Sales Price – New Development
Highest Average Sales Price – Resales
Highest Average PPSF – Resales
Highest Median Sales Price – Resales
Highest Median Sales Price – Studio
Highest Median Sales Price 5th Quintile
Highest Median Sales Price 4th Quintile
Highest Median Sales Price 1st Quintile

Loft (Co-op+Condo)
Highest Average PPSF
Highest Average Sales Price – Resales
Highest Average PPSF – Resales

Luxury (Co-op+Condo) – Top 10%
Highest Average Sales Price
Highest Average Sales Price – New Development
Highest Median Sales Price – Co-op
Highest Median Sales Price – Condo
Highest Median Sales Price – Resale

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NYC Economy is Expanding Rapidly

January 30, 2015 | 11:05 am | fedny2 |

NYFedCEI2014

According the Federal Reserve Bank of New York, the NYC economy is crushing it, growing far faster than the states of New York and New Jersey.

They are using an Index of Coincident Economic Indicators:

A coincident index is a single summary statistic that tracks the current state of the economy. The index is computed from a number of data series that move systematically with overall economic conditions.

Bloomberg View Column: The $10 Million Home, Never Hotter

November 30, 2014 | 1:00 pm | BloombergViewlogoGray |

BVlogo

Read my latest Bloomberg View column The $10 Million Home, Never Hotter. Please join the conversation over at Bloomberg View. Here’s an excerpt…

As the U.S. housing market cools from last year’s overheated state, sales of homes at the top haven’t been following the same script. Prices and sales at the upper reaches are soaring…

[read more]


My Bloomberg View Column Directory

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Bloomberg View Column: Housing Bust Wasn’t About the House

November 30, 2014 | 9:00 am | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column Housing Bust Wasn’t About the House. Please join the conversation over at Bloomberg View. Here’s an excerpt…

Unless you live in a cave, you’re no doubt familiar with the outlines of the housing bust that marked the beginning of the financial crisis: Real-estate prices plunged, people lost their homes, banks went under and the economy tumbled into a recession. We are still grappling with the hangover…

[read more]


My Bloomberg View Column Directory

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Bloomberg View Column: Hedge-Fund Guys Have Foreclosure Fatigue

November 7, 2014 | 4:28 pm | BloombergViewlogoGray | Charts |

BVlogo

Read my latest Bloomberg View column Hedge-Fund Guys Have Foreclosure Fatigue. Please join the conversation over at Bloomberg View. Here’s an excerpt…

One of the most important ways to strengthen the U.S. housing recovery is to get distressed properties into financially stronger hands. Shortly after the financial crisis began, institutional investors started snapping up foreclosed homes. These buyers, according to RealtyTrac, are entities that buy more than 10 properties in a calendar year. Blackstone Group has been among the most active, acquiring more than $20 billion of foreclosed properties, then making necessary repairs and renting them out…

[read more]


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A Century Later: Manhattan Is Less Crowded

September 27, 2014 | 12:26 pm |

manhattandensity

The density of the Five Points in 1910 was absolutely incredible.  The 2010 population density is much more balanced across the island.

NYU’s Marion Institute of Urban Management is offering a free seminar at the New York Public Library called “The Rise and Fall of Manhattan Density” to explain how this happened.

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A Fifth Avenue Co-op’s 87-Year Price Increase was 3.6X Rate of Inflation

August 1, 2014 | 6:30 am | nytlogo |

960fifth$450krecord-1927

[click to expand]

A few months ago there was a record $70M sale of a penthouse co-op sale at 960 Fifth Avenue.  The purchaser paid $5M over list price.

While doing some research I ran across an article in the New York Times archive that described a record Manhattan sale of $450,000 in the same building in 1927.  The apartment was located on the 10th and most of the 11th floor in the same building (aka 3 East 77th Street).

Based on the unit description, I believe this to be Apartment 10/11B which last sold for $21,000,000 on July 24, 2013.   Using the BLS calculator for CPI, a $450,000 sales price in 1927 adjusted for inflation to 2014 dollars would be $6,164,043 or an increase of 1,270%.

However the apartment sold for $21,000,000. an increase of 4,567% or 3.6 times the rate of inflation.

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