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Posts Tagged ‘Absorption’

Bloomberg View Column: Housing’s Misleading Health Indicator

November 30, 2014 | 11:00 am | BloombergViewlogoGray | Charts |

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Read my latest Bloomberg View column Housing’s Misleading Health Indicator. Please join the conversation over at Bloomberg View. Here’s an excerpt…

The National Association of Realtors will release its monthly U.S. existing home sales report tomorrow. Among other things, the report includes what’s known as the absorption rate, or how many months it would take to sell all inventory at the current sales pace. This report and the media coverage around it will inevitably provide the well-worn insight that when the rate is less than six months, housing is “healthy”…

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[Manhattan Absorption] September 2014 – While All Markets Cool, Sub $3M Remains Brisk

October 4, 2014 | 3:27 pm | Charts |

9-2014Manhattan [click to expand]

Thoughts A noticeable downshift from last year yet the market remains brisk. Nearly all price segments are showing slower absorption rates with more weakness seen above the $3M threshold (roughly where the luxury market begins i.e. top 10%).

Side by side Manhattan regional comparison:

September 2014 v September 2013
9-201409-2013 [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 9-2014 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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Bloomberg View Column: Housing’s New Wealth Effect

September 27, 2014 | 1:00 pm | BloombergViewlogoGray | Charts |

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Read my latest Bloomberg View column Housing’s New Wealth Effect. Please join the conversation over at Bloomberg View. Here’s an excerpt…

It was a busy week for housing market reports. The U.S. Census published its new home-sales results for August, showing an 18 percent gain from the prior month and a 33 percent increase from August 2013. News headlines relied on words such as “surged” and “soared” to describe the results.

Only a few days earlier, the National Association of Realtors released its existing home-sales report for August, which showed month-over-month sales falling for the first time in four months. The inventory of unsold properties was 4.5 percent higher than a year earlier. I recently addressed the market slowdown in “Understanding Housing’s Dog Days.”

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[Manhattan Absorption] August 2014 The $3M-$5M Market Slows Down

September 13, 2014 | 6:15 pm | Charts |

8-2014Manhattan [click to expand]

Thoughts Not a big difference from last year. Sub-$3M is generally very tight with not much variation between price categories in each region. There isn’t much difference in the $10M+ market. Condos are slower than co-ops overall, but not by much. The difference is being seen in the $5M to $10M, which is moving more slowly moving than it was a year ago.

Side by side Manhattan regional comparison:

August 2014 v 2013
8-201408-2013 [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 9-2014 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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[Manhattan Absorption] May 2014 – Swimming in high-end condos.

June 8, 2014 | 6:19 pm | Charts |

5-2014Manhattan [click to expand] Thoughts Not a significant change from a year ago. The absorption rate is generally a little faster than the year ago pace when you are talking about the sub-$3M market and a little slower from an already cooling rate above that threshold. Hi end condos – over $10M – are seeing a 32.3 month absorption rate which is extremely slow largely because of the new product entering the market.

Side by side Manhattan regional comparison:

May 2014 v 2013
5-201405-2013

[click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average rate of the most recently completed month for that market area.


Manhattan Market Absorption Charts [Miller Samuel]

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[Manhattan Absorption] April 2014 – Market Pace At Top Eases As Remainder Accelerates

May 19, 2014 | 6:30 am | Charts |

4-2014Manhattan [click to expand]

Thoughts
You can see a slight slow down in the pace of the market at or above $5M while the remainder of the market continued to accelerate as evidenced by faster (lower) absorption rates. It makes sense since there is no new development entering the market to ease the supply shortage of the “lower 90%” of the market.

Side by side Manhattan regional comparison:

April 2014 v 2013
4-201404-2013 [click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average 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 annual pace of sales activity. (The definition of absorption in our market report series reflects the quarterly pace – nearly the same)


Manhattan Market Absorption Charts [Miller Samuel]

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[Manhattan Absorption] March 2014 – All But Top 1% Seeing Faster Pace

April 12, 2014 | 1:23 pm |

3-2014Manhattan [click to expand]

Thoughts
All price segments of the market are generally showing a faster market pace than the same month in the prior year. The top 1% ($10M+) had slower absorption rates for co-ops and condos, but not by much. Inventory began to “bottom” in recent quarters so we may not see much more compression in the market pace in the coming months.

Side by side Manhattan regional comparison:

March 2014 v 2013
3-201403-2013 [click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average 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 annual pace of sales activity. (The definition of absorption in our market report series reflects the quarterly pace – nearly the same)


Manhattan Market Absorption Charts [Miller Samuel]

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[Manhattan Absorption] February 2014 – “Tight Supply” as a Market Rant

March 4, 2014 | 10:41 am | Charts |

2-2014Manhattan [click to expand]

Thoughts
For the overall inventory in the Manhattan market, the operative phrase remains “tight supply” with no real relief in sight. While we are seeing a nominal improvement year to date in 2014, the operative word remains “nominal.” $10M+ has long had bloated supply with lots of “I’ll sell if you pay that” listings. $5M and up continues to see the most supply relative to demand. Supply is chronically low below the $3M threshold and most acute between $1M and $2M.

Side by side Manhattan regional comparison:

February 2014 v 2013
2-201402-2013
[click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average 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 annual pace of sales activity. (The definition of absorption in our market report series reflects the quarterly pace – nearly the same)


Manhattan Market Absorption Charts 2014 [Miller Samuel]
Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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Manhattan’s West Side Inventory Losing More Market Share Than Others

March 3, 2014 | 1:58 pm | Charts |

4q13manhattan-over-under
[click to expand]

I took a look at the trend in Manhattan’s listing inventory on a weekly basis since the beginning of 2009 and matched it against the market share of inventory for each of the four regions. It looks like the West Side (yellow line) was the only region to consistently lose market share over the past several years.

Since overall inventory has been falling during this period, this suggests that the West Side is tighter than the other regions but the absorption rate is about the same as the other regions.

Why?

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[Manhattan Absorption] January 2014 – “Bottom 99%” of Market Is Tight

February 5, 2014 | 7:00 am | Charts |

1-2014Manhattan [click to expand]

Thoughts
For the overall Manhattan Market, in fact for the “Bottom 99%” (I love saying that) of the market, the absorption rate is well below the year ago period. Record high sales and record low inventory has pressed the absorption rate to the floor. For the $10M+ market (top 1%) the absorption rate has slow sharply from a year ago. While this segment has always been a LOT slower than the market overall (see archives below), it has slowed considerably. The next highest segment $5M-$10M has essentially remained the same with the remainder of the submarkets seeing much more rapid absorption rates over the same period. All regions saw similar changes from the year ago period.

Side by side Manhattan regional comparison:

January 2014 v. January 2013
1-201401-2013
[click images to expand]

I started this analysis in August 2009 so I am able to show side-by side year-over-year comparisons. The blue line showing the 10-year quarterly average travels up and down because of the change in scale caused by some of the significant volatility seen at the upper end of the market. The pink line represents the overall average 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 annual pace of sales activity. (The definition of absorption in our market report series reflects the quarterly pace – nearly the same)


Manhattan Market Absorption Charts 2013 [Miller Samuel]
Manhattan Market Absorption Charts 2012 [Miller Samuel]

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