Posted by: jhamon | July 4, 2009

Ouch! NY City Apartment Sales Down More Than 50%

East Hampton NY beach

From CNBC:

Manhattan apartment sales plunged more than 50 percent and the average price dropped 21.4 to 24 percent from a year ago, as the U.S. recession forced many who own a piece of the Big Apple to eat humble pie, several reports said.

Then there is is this quote from Pamela Liebman, a REALTOR®:

“Prices have taken a really nice drop,” she said. “For those who continue to wait on the sidelines for additional double-digit falls, I think they will be greatly disappointed.”

Pamela is doing what we in the trading game call “talking her book” – spreading a meme for her own advantage.  Pamela (a REALTOR®) is hoping to incite fence-sitters to make a purchase this bleak summer somewhere in Manhattan or the Hamptons.  In the process, she ignores data clearly contrary to her position later in the piece:

The number of homes on the market rose to 9,378, an 8.7 percent jump from a year earlier, but were down 10.2 percent from the prior quarter, as less motivated sellers took their apartments off the market, according to Prudential.

My comment: one should ignore 10.2 percent decline Q/Q in inventory (not a fair seasonal comparison) and note that inventories Y/Y have increased nearly 9%.

Resale apartments lingered on the market for an average of 162 days, up from 135 days this time last year, Prudential said.

Wishful thinking by real estate partisans aside (did I mention that the expert cited is a REALTOR®?), the evidence points to further price declines.

Common Sense Exam Question.  Too much inventory and more sellers than buyers results in market prices:

  1. Rising,
  2. Falling, or
  3. No clue.  I lack common sense.

LATE ADDITION: See my post Housing’s Fallen Down And It Can’t Get Up: Facts You Need To Know for more sobering data points.

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  1. I like 3 because 1 or 2 would mean I would have to think.

    Let me add 4. Stay the same, so I don’t have to think about it.

  2. […] Original post by jhamon […]

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