Manhattan Prices in "Freefall"
MARKET STATISTICS, Q3 2019
"It's a bloodbath." "A harbinger of a new recession." Do I have your attention? Certain brokers and media pundits need the sensationalized headlines.
Yes, prices have fallen, but the big reason was a one time occurrence: the huge hike in the mansion tax and the rush to close in Q2 before it kicked in.
Here are the facts: -The changed Mansion Tax poached sales that would have closed in Q3. Especially high-priced ones. -There was actually a surge in lower priced sales as mortgage rates fell sharply. -It's not just about the prices. The other metrics are equally illuminating. -The average size of a luxury new development fell by nearly 900 sq ft. Is the consuming public's appetite for trophy properties shrinking? Relax, everyone, market fluctuations can be a good thing. Think of the affluent renters who actually reside in our luxury high rises, unlike the foreign oligarchs who bought them but keep them empty. These affluent renters may now be able to buy. Despite falling prices, the market may actually be stabilizing. Days on market and listing discount are unchanged year over year. Buyer enthusiasm has returned to Open House shopping. Are buyers sensing that the market has hit bottom? Maybe.... There is so much available real estate data, and a continuous barrage of reports, opinions, ideas and theories analyzing it. Much of the data is inconsistent and the reports are routinely sensationalized. Data can be used to to support some crazy claims; there is routinely confusion and uncertainty, and bad decisions may result. Here's an example of what I'm referring to: Jennifer Gould Keil reported in The NY Post on Oct 3, 2019 that "the median sales price for a Manhattan townhouse fell a staggering 45.8 percent, to $3.5 million" in Q3 2019. Yikes! Talk about sensationalism! She continued, however, "... just 36 deals closed, down 33.3%" year over year. Aha! Relatively, there were many low-priced sales in Q3 and few large ones because the expensive properties were rushed to close in Q2 to avoid the higher transfer taxes. Makes sense, and not nearly as awful as Ms. Keil suggested. Headlines should be accurate, and the data, quotes and explanations must provide context, to empower consumers to make informed and smart choices. Absent context, the data is and will continue to be distorted and sensationalized. Reporting affects public perceptions and overall market conditions, and property valuations fluctuate accordingly. The public needs to have the statistics fully explained in understandable detail and not mislead. Consumers beware: if you act based on inaccurate, incomplete, misunderstood or "fake news", you risk making poor decisions. Research thoroughly. Read carefully and the entirety of all writings. How can consumers sift through all the information to arrive at a true reality? More than ever, the public needs intelligent and trustworthy editors to provide real insights, that add real value, to the real estate landscape. Ethical reporting, with honesty and integrity, is essential, and is where a seasoned and professional agent is critical. I want to be that editor and professional agent; the Walking Valium Drip, cool, calm collected voice of reason, keeping a finger on the pulse of the market.