As 2011 is wrapping up, here’s how the NSDCC detached sales and average cost-per-sf compares with previous years (I added a zero to the $/sf numbers):
We have seen that the size of the inventory has some sort of impact on the market. When the market is loaded with over-priced turkeys (OPTs), buyers gain confidence about staying on the fence. When it grows thin, the buyers get antsy and jump sooner…and some at prices a little higher than they want.
The size of inventory is fluid, and day-to-day. But for our purposes, we can see an overall effect below by comparing annual sales to total listings taken each year:
| NSDCC Det. | Annual Sales | Total Listings | AS/TL |
| 1999 | |||
| 2000 | |||
| 2001 | |||
| 2002 | |||
| 2003 | |||
| 2004 | |||
| 2005 | |||
| 2006 | |||
| 2007 | |||
| 2008 | |||
| 2009 | |||
| 2010 | |||
| 2011 |
By dividing sales by listings, we have the efficiency ratio, and when it’s around 60% the market seems to be somewhat balanced. You can see that in 2001 that we lost about a month’s worth of sales due to 9/11, and that in 2003 the market was in full-tilt-frenzy mode.
Today’s low rates and below-peak pricing, combined with the tight inventories, are helping to improve the efficiency rate.
The average days-on-market hasn’t been this high around NSDCC in a decade, which generally means that the sellers’ motivation is dreadfully low. The banks aren’t pushing people to short-sell or foreclose unless their delinquency is extremely high, and elective sellers are willing to wait for the lucky sale.
These market conditions do help put a brighter spotlight on the few well-priced listings, and as a result, we have vicious bidding wars and shenanigans to contend with, in the fight to win one.
The thin inventory and lower seller motivation is a tough combination for buyers – get good help!
Good post. This is the kind of information that you don’t find anywhere but here. Looks like the war between buyers and Sellers is heating up . Days on the market hasn’t been this high in a decade and it takes 2 parties to make a deal.
What typically happens to real estate prices during economic deflation? Do the prices rise or drop or stagnate? When I say deflation I mean real deflation, not the stagflation that I remember from the 80s.
I have looked around and haven’t found a simple-worded answer to this.
HopefulBuyer,
Check this out: http://people.hbs.edu/tnicholas/Anna_tom.pdf
Using new data on market-based transactions we construct real estate price indexes for Manhattan between 1920 and 1939. During the 1920s prices reached their highest level in the third quarter of 1929 before falling by 67 percent at the end of 1932 and hovering around that value for most of the Great Depression. The value of high-end properties strongly co-moved with the stock market between 1929 and 1932.
How long did Manhattan real estate prices take to recover? According to the Annual Report on the NYC Property Tax for the ?scal year 2000, the full recovery did not happen until 1960.