The Fall Inventory: A Possible Return to Normalcy

After a bleak 12 months since the collapse of Lehman Brothers, New York real estate market is suddenly doing something few had expected: it’s behaving much the same as it did this time last year. While there was little activity during the winter, and the usually bustling spring season proved disappointing, the summer was uncharacteristically busy, with contract signings finally picking up. Since Labor Day, however, the market appears normalized, if only in the number of units entering the market.
According to listings data analyzed by The New York Times, the number of listings added since Labor Day in Manhattan was remarkably close to the increase last year. StreetEasy.com, for example, had 462 additional apartment listings after Labor Day, compared to last year’s 472. The asking price, however, is still almost 25 % lower, prompting industry professionals to speculate that we are not yet in an upswing, although it is likely the beginning of a sideways market.
Other firms have experienced similar number: Prudential Douglas Elliman, for example, saw a 35 % spike the week before Labor Day compared to the same week in 2008, but a 30 % drop in listings the following week compared to 2008, keeping the overall numbers the same as last year.
This August’s overall inventory, according to data obtained by the Times, is 8,423 units, just 2.8 % higher than last August-but during the 12 months in between inventory has risen sharply, to over 11,000 units in March, or 35 % more than last August. According to StreetEasy’s Sofia Kim, two out of three real estate market indicators are positive: inventory is finally stabilizing, and this summer the number of transactions went up. However, prices, the third indicator, continue to drop: the median asking price as of the week ending Sept. 13 was $860,750, compared to $1,100,000 in 2008 and $1,050,000 in 2007. One other indicator to watch, however, is the unemployment rate, which reached a high of 9.7 % in August.
New listings in Manhattan since Labor Day are split 60/40 between co-ops and condos, with one-bedrooms taking the lead with 171 new listings (asking price of $675,000 this year, vs. $785,000 in 2007, $775,000 in 2008), two-bedrooms closely behind with 160 new listings ($1,250,000 this year vs. $1,412,500 in ’07 and $1,599,500 in ’08), 65 additional studios ($399,000 this year vs. $525,000 in ’07 and $429,00 in ’08) and 50 three-bedrooms. Only 16 new listings were for homes larger than three-bedrooms. No year-to-year data was available for boroughs outside Manhattan.