Admittedly, I haven’t fully exited holiday mode and am more focused on stuff like this (except that mega Manhattan market report release thing later down the page).
— Tom Harrington (@cbctom) January 2, 2020
But I digress…
Manhattan’s Real Estate Success Is Highly Leveraged On The High End
I’ve long said that the optics of the market tend to be through a $100 million new condo. The results presented this quarter should help reorient Housing Note readers to the proper context.
Let’s start with a breakdown of Manhattan 4Q19 sales:
It should be noted that only 4.4% of all sales in 4Q19 were sold at/above $5 million and therefore sales below $5 million accounted for 95.6% of the Manhattan market. Sales above the $5 million threshold fell 37.6% YOY and sales below $5 million rose 1.6%. Two completely different patterns are very apparent.
I’m not laying on some flowery prose about the market here but 95.6% of the market saw a 1.6% increase in sales and 4.4% of the market saw a 37.6% drop in sales. How would you describe it?
The real issue to the real estate industry is that the super-luxury prices of the top 4.4% represent a significant dollar volume in the market. Total market volume was $4.4 billion this quarter and the top 4.4% of sales accounted for 30% of those total dollars. So yes, based on dollar volume, the drop in high-end sales activity is a big deal.
Elliman Report: Sales: Q4-2019 Manhattan Sales – Prices Flat to Sliding
The Bloomberg story using our 4Q19 Elliman Report results was ranked 9th most read worldwide (350K Bloomberg Terminal subscribers) before 9 am so with all the other big headlines today, I’d say interest in real estate hasn’t waned.
There are a bunch of great articles on the state of the market in the links at the bottom of the page. Be sure to check them out.
And then there is the chart:
Notice the Mansion Tax flip flop in Q2 qnd Q3 of 2019. Just noise.
Q4-2019 Elliman Report: Manhattan Sales [Elliman]
Q4-2019 Elliman Report: Northern Manhattan Sales [Elliman]
Here are some key points:
MANHATTAN SALES MARKET HIGHLIGHTS
Co-ops & Condos
“Overall sales below the $5 million threshold edged higher while sales at or above the threshold fell sharply.”
– The number of sales fell annually for the eighth time in nine quarters
– Median sales price unchanged year over year as average sales price continued to decline
– The lowest overall share of quarterly cash buyers in five years of recording
– The hardest-hit segment in terms of sales has from $7 million to $10 million
– Four out of ten luxury sales were new development versus six out of ten three years ago
– The sharp gain in luxury listing inventory continued with resales contributing the most significant portion
– Smallest new development average square footage of a sale in seven years
– The third straight annual increase in new development sales market share but remained below decade quarterly average
NORTHERN MANHATTAN SALES MARKET HIGHLIGHTS
“Price trend indicators by property type continued to slide.”
Co-ops & Condos
– Median sales price declined year over year for the third time in four quarters
– The number of sales expanded annually for the second time in three quarters
– Price trend indicators and the number of sales declined from the year-ago quarter
– Listing inventory hasn’t shown a year over year decline in seven quarters
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
It’s still the holidays in Appraiserville.
More Miles Than An Uber Driver
— Joe Lynch, MNAA (@NorCalRushfan) December 29, 2019
You’ll note that in the comments of the tweet, as a Manhattan appraiser, I’ve never driven my car to any of my 8,000 appraisals during my career.
OFT (One Final Thought)
Marketing on steroids…
I learned to drive a stick in my friend’s yellow VW Beetle in a hilly neighborhood in the late 1970s. We both survived and I have largely preferred driving a stick ever since. I loved that moment but never wanted to actually own a Bug. Nostalgia aside, it felt like a death trap, but I still retained fond memories of the car.
I highly recommend a documentary on the VW Beetle called: The Bug.
VW marked the discontinuation of their Beetle in this video on New Year’s Eve.
Brilliant Idea #1
If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them because:
– They’ll drive a stick;
– You’ll like to sled;
– And deal with the oversupply at the top.
Brilliant Idea #2
You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive and it helps me craft the next week’s Housing Note.
See you next week.
Reads, Listens and Visuals I Enjoyed
- Austin Board of Realtors settles with CoreLogic over selling home sales data [HousingWire]
- Take a Secret Peek Inside the Spire of the Chrysler Building [The Atlantic Cities]
- Historic Connecticut Estate Once Asking $29.9 Million, Sold for $13.25 Million [Mansion Global]
- Why street vendors make cities feel safer [Curbed]
- Racist property deeds kept thousands of Philly homes off-limits to all but white buyers, study finds [Inquirer]
- End of the Decade: L.A. housing bounces back from Recession, but struggles with rising rent [Daily News]
- For American Homebuyers, Paris Has a Certain Je Ne Sais Quoi [Wall Street Journal]
- Petra Ecclestone Lists London Home For Approximately $130 Million [Forbes]
- Angular Greenwich Village townhouse on infamous site wants $21M [Curbed NY]
My New Content, Research and Mentions
- A $111 million estate with a bowling alley just broke Florida's real-estate record. Here are the 16 most expensive homes sold in the US over the past decade. [Business Insider]
- Video – Critical Mention [Spectrum News NY1]
- Manhattan property decline worsened as Wall Street boomed [Financial Times]
- Manhattan Home Sales See Smallest Decline in Two Years [Bloomberg]
- New York’s real estate market stumbles into 2020 [Luxury Daily]
- Douglas Elliman Releases Q4 2019 Manhattan and Northern Manhattan Sales Market Reports [Citybizlist]
- Sales of Manhattan apartments slipped (again) in the fourth quarter, but there were signs of stability [Brick Underground]
- Here's what's next for business on LI in 2020 [Newsday]
- Sales of Manhattan's priciest apartments plunge almost 40% in fourth quarter [CNBC]
- Manhattan Residential Sales Market Fourth Quarter 2019 Report [The Real Deal]
- Manhattan Luxury Homes Saw Median Prices Slump 24% at the End of 2019 [Mansion Global]
- New York, Miami and Paris May Benefit from a Stabilizing U.K. [Mansion Global]
- París liderará el mercado inmobiliario de lujo en el año 2020 [El Economista]
- Race car driver’s home puts you in the fast lane for $2.495 million [Sun Sentinel]
- Around the world, luxury real estate poised to (mostly) strengthen [Union Leader]
- Nassau sets new assessment values for 2021-22 [Newsday]
- 2020 NYC real estate forecast: Buyers trade up, renters lose advantage, and sellers…quit? [Brick Underground]
- The Blockbuster Sales That Ruled the Last Decade [Realtor Magazine]
- 2019年美国十大最贵豪宅 [Fortune China]
- How Luxury & Real Estate Will Change in 2020: From NYC to Hong Kong – Business News Middle East [BLME]
- Manhattan Real Estate Didn’t Have a Good Year [Wall Street Journal]
- A $111 million estate with a bowling alley just broke Florida’s real-estate record. Here are the 16 most expensive homes sold in the US over the past decade. [USA Online News]
- How Luxury Real Estate Will Change in 2020, From NYC to Hong Kong [Newsmax]
- This is the end of a middling decade for US stocks [CNN]
- Hong Kong, Miami, Londres: lo mejor del mercado de bienes raíces de lujo para 2020 [PERFIL]
- The Year In Real Estate [NY Times]
- Is Killing Low-Ball Sales a Breach of a Co-op Board’s Fiduciary Duty? [Habitat Magazine]
- Luxury real estate poised to (mostly) strengthen [Crains NY]
- Lo mejor del mercado de bienes raíces de lujo para 2020 [Yahoo Finance]
- Mercado global de imóveis de luxo sinaliza recuperação em 2020 [Bloomberg]
Recently Published Elliman Market Reports
- Elliman Report: Northern Manhattan Sales 4Q 2019 [Miller Samuel]
- Elliman Report: Manhattan Sales 4Q 2019 [Miller Samuel]
Appraisal Related Reads
- The IRS Tried to Crack Down on Rich People Using an “Abusive” Tax Deduction. It Hasn’t Gone So Well. [ProPublica]
- Sign of GSE Compression Into One Entity [Jonathan Miller/Appraisers Blogs]
Extra Curricular Reads
- Are You a ‘Testosterone’ or a ‘Dopamine?’ [Wall Street Journal]
- The Spectacular Rise and Fall of WeWork – The Big Picture [Ritholtz]
- The art of conversation — Quartz Daily Obsession [qz.com]
- Will These Words From The 1920s Come Back In 2020? [Dictionary.com]
- This Is What It Takes to Be in the 1% Around the World [Bloomberg]
- What Is the Ideal Temperature for Sleep? [The Atlantic]
- Cover Star: Vaughan Oliver interview [Long Live Vinyl]
- Our Guide To The Exuberant Nonsense Of College Fight Songs [Projects Five Thirty Eight]
- Why Is New York City’s Skyline Always Lit Up? [NY Times]