Author: Jonathan Miller

Manhattan Rents Fall Across The Board
(This guest post originally appeared at the author’s blog, Matrix)

The 4Q 2009 Manhattan Rental Market Overview that I author for Prudential Douglas Elliman was released today.

Other reports we prepare can be found here.

Our data section is being re-built to accommodate rental results but in the mean time you can check out our growing rental chart library.

Press coverage can be found here.

The report tracks new rental activity, not renewals. Over the past three quarters, landlords have been much more aggressive with their efforts to bolster tenant retention. Anecdotal stories of landlords approaching tenants with lower rent offers continue, however the amount of concessions being offered appeared to level off a bit this quarter.

An excerpt

…All rental price indicators, excluding concessions, were below levels seen in the same period a year ago, but showed signs of stability since the prior quarter. Rental price per square foot was $47.02, down 4.6% from the prior year quarter and down 1.7% from $47.84 in the prior quarter. Average rental price fell 4.3% to $3,789 in the fourth quarter from $3,958 in the prior year quarter, but saw a nominal 0.8% uptick from $3,759 in the prior quarter. The smaller price declines and mixed results from the prior quarter suggest near term stabilization in prices…

Download 4Q 2009 Manhattan Rental Market Overview

Read more housing analysis at Matrix — >

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January 14, 2010
Housing: Stable In The First Half Of 2010… Then Off A Cliff
(This guest post originally appeared at the author’s blog, Matrix)

NAR released their November 2009 Pending Home Sales Index which ended a 9 month string of increases.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16.0 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

NAR attributes the drop as a pullback during November related to the uncertainty surrounding the extension of the first time home buyers tax credit which expired November 30th. However it was subsequently extended and expanded to include existing home buyers who have until the end of this April to sign a bonafide contract. We may trivialize the tax credit’s success in the NYC metro area because of the higher housing costs relative to $8,000 and $6,500 tax credits respectively but from my discussions with real estate agents around the country, it did appear to trigger a large portion of home sales in 2009.

What does the 16% drop suggest? More weakness to come?

Yes, but not in the coming months (remember this is a seasonally adjusted stat).

It signifies that the US Housing market doesn’t yet have its own set of legs. No credit = drop in sales.

The credit extension ends in April, the Fed begins their pullout from the purchasing of Fannie Mae mortgage paper, perhaps influencing mortgage rates higher.

The combination of high unemployment, rising mortgage rates and the expiring tax credit in the spring, combined with the elixir of rising foreclosures causes by sustained unemployment at high levels suggests housing sales will fall in second half 2009.

Housing in 2010: Stability in the first half, with more concern for the second half.

Read more real estate analysis from Jonathan Miller at Matrix — >

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January 6, 2010
American Foreclosures Set To Break The 4 Million Mark
(This guest post originally appeared at the author’s blog)

RealtyTrac has released their monthly US Foreclosure Market Report today and its a mixed bag of results. In other words, its like unemployment. Its at a high level but the pace of increase seems to be abating. In other words, with 3.9 million notices sent to homeowners in default, it is going to take a while for this inventory to clear out.

Here are the foreclosure metrics by state.

And a news recap:

foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 306,627 U.S. properties during the month, a decrease of nearly 8 percent from the previous month but still up 18 percent from November 2008. The report also shows one in every 417 U.S. housing units received a foreclosure filing in November.

Phyllis Furman over at The Daily News does a nice NYC-centric analysis of the results.

While foreclosure activity is rising, the percentage of homes at risk here – one in every 1,706 – is small relative to the rest of the country. In November, 306,627 U.S. homes – one in every 417 – received a foreclosure filing. That was up 18.4% from last year, but down 7.7% from October.

And Dan Levy at Bloomberg does a nice US foreclosure recap

Dec. 10 (Bloomberg) — Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.

This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.

“We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”:

Statistical nirvana by default (sorry for the pun)
- One in every 417 U.S. housing units received a foreclosure filing in November
- Default notices nationwide were down 8 percent from the previous month but still up 22 percent from November 2008
- Nevada, Florida, California post top state foreclosure rates
- Nevada foreclosure activity – one in every 119 housing units receiving a foreclosure filing in November — 3.5 times the national average.
- Four states account for more than 50 percent of national total: For the second month in a row, the same four states accounted for 52 percent of the nation’s total foreclosure activity: California, Florida, Illinois and Michigan
- Las Vegas drops out of top spot among 10 highest metro foreclosure rates. After four straight months with the nation’s top foreclosure rate among metropolitan areas with a population of at least 200,000, Las Vegas dropped to No. 5 thanks to a 33 percent decrease in foreclosure activity from the previous month. One in every 102 Las Vegas housing units received a foreclosure filing in November — still more than four times the national average.
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December 10, 2009
Trulia: High-End Home Price Reductions Set To Accelerate Next Year
(This guest post originally appeared at the author’s blog)

Trulia, the listing search site, recently developed a Monthly Price Reduction report on the US housing market. Its intriguing because Trulia is able to aggregate this from a data set of millions of active listings – they have 80% coverage…plus the mapping presentation is amazing (way cool). (disclosure: I am on their industry advisory board)

Here’s the press release and some highlights:
- 22 percent of homes currently on the market in the United States as of December 1, 2009 have experienced at least one price cut, the lowest level since Trulia started tracking price reductions in April, 2009.
- The total amount slashed from home prices also dropped from $28.1 billion in November to $24.7 billion in December, representing a 12 percent decrease.
- The average discount for price-reduced homes slightly increased to 11 percent off of the original listing price compared to 10 percent in the previous four months.
- The number of listings on Trulia also decreased by 9 percent from the previous month.
The trend over the past several months shows darker (higher price reductions) areas of inventory transitioning from September 2009 to December 2009. If its sensory overload, focus on Alaska to get my drift moving from the above chart down the post through the older charts. More discounting means that sellers are adapting to the new (lower) housing market. Less discounting in this market suggests that list prices are approaching market value when originally priced.

Other than a brief reprieve this month in discounting, which is likely due to the transition from the first time home buyers tax credit to the new program, listing prices are trending lower, perhaps “chasing” the market.

from the press release…

“We saw some of the highest levels of reductions last month, as home owners raced to sell their homes in advance of the November 30 expiration of the tax credit,” said Pete Flint. “We are now seeing fewer reductions at the low end of the market as those sellers are increasingly in sync with market prices. With the expansion of the tax credit to repeat home buyers and extension to April 30, we expect to see an increase in price reductions at the higher end of the market in the first quarter of 2010.”

For the first time since Trulia started tracking price reductions in April 2009, one major U.S. city has reached 40 percent of listings with price reductions – Minneapolis. This is the second straight month that Minneapolis has held the top spot for highest percentage of price reductions.

Here’s an archive of prior month maps.

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December 9, 2009
Manhattan Inventory Problem Continues To Improve
(This guest post originally appeared at the author’s blog)

Absorption defined for the purposes of this chart as: Number of months to sell all listing inventory at the annualized pace of sales activity.

The absorption rate continues to improve from a bottom up, approaching the 10-year 10.0 month average for all three market areas (the data set is too thin for a reliable trend for Uptown).

Observations

The East Side absorption rate slows considerably above $1.5M. Co-ops are considerably slower than condos above that threshold. Condos generally absorb faster than co-ops.

The West Side absorption rate has reduced in higher price segments, up to $3M. Co-ops generally absorb faster than condos below $3M but take much longer than condos above the threshold.

The Downtown market absorption rate has reduced in higher price segments, up to $3M. Co-ops and condos are consistent below the threshold but co-ops absorb considerably slower above the threshold.

Note: This chart series does not include shadow inventory (properties ready for market but not yet listed for sale) so it understates condo absorption.

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December 1, 2009