[Three Cents Worth NY #244] Manhattan’s Middle Market Shows Life

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m here to take measurements.

Check out my 3CW column on @CurbedNY:

This week I thought I’d take a look at the breakdown of sales by price in the most recently completed quarter. Last year I was using a donut analogy to describe the Manhattan apartment market—weak in middle and strong on the outside (bottom/top). I wanted to illustrate how the mix in 2013 could be showing signs of change rather than continuing to see a disproportionate amount of activity on the margins. For reference I provided an inset in the form of a pie (sorry) chart to show a simple breakdown of the market in the second quarter of 2013…

[click to expand chart]

My latest Three Cents Worth column on Curbed: Manhattan’s Middle Market Shows Life [Curbed]

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The Middle: As San Francisco gets increasingly expensive,...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Thursday, February 23, 2012, by Abby Pontzer

As San Francisco gets increasingly expensive, middle-class households are fleeing the city. Mayor Ed Lee has proposed a Housing Trust Fund to help out middle-income San Francisans to encourage them to stay in the city. Just what the fund would pay for is still up in the air, though everything is being put on the table, from $75,000 down payment subsidies to encouraging developers to build less expensive units without parking. Of course, many problems face this fledgling idea, one of which is how to define middle class in an expensive city like San Francisco. Stay tuned. [SF Gate/photo via Shutterstock]

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On the Market: A 17th-Century English Manor Smack in the Middle of Kentucky

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, September 20, 2011, by Sarah Firshein

Built in 2000 and sited on 11 acres, the largest house in Fayette County, Ky., has been on the market since April 2010 with an ask of $6.5M. Owners Alan and Irene Bloomfield, who live six months a year in Florida, built it to resemble some of the 17th-century English manor houses that particularly enchanted Irene on their travels. "I took her to England one too many times," Alan told the local paper. Let's break down the 28,000-square-foot mansion by the numbers, shall we? There are: five bedrooms, five baths, a 30-by-30-foot kitchen with 12-foot-high ceilings and counter space that accommodates 70 plates, two fridges, two freezers, four warming drawers, three dishwashers, 16 furnaces, an 80-foot entry hall, 24-foot floor-to-ceiling windows, two poolhouses, one pool, and, presumably, at least one partridge, at least one pear tree, and some turtledoves. As Alan said, "It's just time to downsize."

· 1202 Delong Pl [Realtor.com]
· For sale: an English manor in Lexington [Kentucky.com]

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[Manhattan Absorption] July 2011 Strong Middle, Loose Ends

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 my market report series reflects the quarterly pace – nearly the same)

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.

Thoughts
The entry level market continues to weaken but the absorption rate is consistent with the 10-year average. $500 to $2M is moving best but $1.5M to $2M is the fastest. Dowtown is most efficient market overall followed by West Side then East Side.

Side by Side Manhattan regional comparison:

[click images to expand]

Manhattan Absorption Archive 2011 [Miller Samuel]
Manhattan Absorption Archive 2010 [Miller Samuel]

Note: This chart series does not include shadow inventory (properties ready for market but not yet listed for sale) so this anlaysis understates the rate of condo absorption. The Uptown (Northern Manhattan) data set is too thin for a reliable presentation.

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US Housing Recovery Hurt by Unrest in the Middle East

You probably don't think of unrest in the far away Middle East as having anything to do with the housing market here in the U.S. You should.

The weekly mortgage applications say it all.

Despite the rate on the 30-year fixed falling below the psychologically important 5 percent line, mortgage applications to purchase a new home and to refinance both dropped; yes, there was a holiday involved, but the four week moving average is also down, despite mortgage rates coming off their Egypt-unrest surge.

Remember, rates track yields on the 10-year Treasury, which have been volatile due to the unrest abroad, but not THAT volatile: Less than half a percentage point.

Rates are one thing, but uncertainty weighs heavier on potential buyers, and rising oil prices may outweigh both.

"It’s the spring season. This is where new home buyers come out looking to buy a home," says FBR's Paul Miller. "If gas prices have gone up significantly, it’s going to cut into the foot traffic, and we’re really concerned with what that’s going to do to housing market."

Right now what the stumbling housing recovery needs above anything else is stabilization. Stable interest rates, stable gas prices and rest overseas are crucial to consumer confidence, which I continue to believe is the greatest impediment, above all economic issues, to housing's recovery. Of course Peter Boockvar over at Miller Tabak makes an excellent economic argument as well:

"Assuming mortgage rates remain in their current range, the state of housing really comes down now to the pace of household formation, which also has much to do with the state of the labor market. With higher commodity inflation upon us, the fragile state of the economy will likely result in still mediocre hiring (relative to previous recoveries) and housing will remain distressed."

Political and economic unrest, rising gas prices, higher commodity prices, and a very concerned consumer versus excellent affordability, huge inventory, great distressed property deals and eager sellers.

Let the Spring games begin!

Questions?  Comments?  document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick

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