Welcome to this week’s Streets365 Weekly. Each week I look at the latest Manhattan market numbers, share a few things that caught my attention, and then talk about something that happened in real estate during the week that I found interesting. It’s a chance to look beyond any one deal and think about what’s happening around us as we begin another week.
Market Dashboard
Active Inventory — 4,341
New Listings — 141
Signed Contracts — 140
30-Day Contract Pace — 771
Median Days on Market
Under $1M — 79 days
$1M–$2M — 91 days
$2M–$4M — 82 days
$4M+ — 123 days
30-Year Fixed Mortgage Rate — 6.76%
These are the most current figures available to us.
What I Notice
Inventory continues to be the number that stands out to me. Active Manhattan listings have fallen to 4,341, down 26.5% from a year ago and the lowest level we’ve seen this year.
What’s particularly interesting is the composition of that inventory. Only 13% of the apartments currently available have been on the market for less than 30 days, while 61% have been sitting for 90 days or longer.
That tells me something different from simply saying there aren’t enough apartments for sale. There aren’t many apartments available, but a significant portion of what is available has already been rejected by the market at its current combination of price, condition and circumstances.
Last week’s activity also reflected the Labor Day period. There were 141 new listings and 140 signed contracts. Contract activity was down 6.7% from the previous week, while new listings increased 12.8%. I wouldn’t read too much into either movement because of the holiday, but I’ll be watching what happens as the September market gets underway.
The luxury market is worth watching as well. Apartments asking $4 million and above are now showing a median 123 days on market. That’s considerably longer than the rest of the market and another reminder that limited overall inventory doesn’t necessarily mean every part of Manhattan is moving at the same pace.
Mortgage rates moved higher again, with the average 30-year fixed rate reaching 6.76%, up from 6.71% last week and 6.35% a year ago. That’s the third consecutive weekly increase and the highest level in more than a year.
Thought for the Week
This week marks 25 years since September 11, 2001, and I found myself thinking about Lower Manhattan.
It’s difficult to remember just how uncertain its future looked after the attacks. The World Trade Center was gone, millions of square feet of commercial space had been destroyed or damaged, businesses had been displaced and there were serious questions about whether people would ever again want to work, live or invest in that part of the city.
Twenty-five years later, Lower Manhattan is a very different place.
Its residential population has roughly tripled. There are now more than 37,000 apartments downtown, compared with about 13,000 in 2000. More than 230,000 people work there, nearly as many as before the attacks, but the neighborhood is no longer defined almost entirely by Wall Street. Technology, media and advertising companies have become part of the business community, while restaurants, hotels, cultural institutions and thousands of new residents have changed what happens there after the workday ends.
I think the residential transformation is particularly interesting. Converting older office buildings into apartments helped turn an area that once emptied out at the end of the business day into a neighborhood where people actually live. Today there are another 23 office-to-residential conversion projects either planned or underway in Lower Manhattan.
We hear a great deal today about converting obsolete office buildings into housing as though it were a new idea. Lower Manhattan gives us 25 years of experience showing both what can happen and how long meaningful change can take.
There are still problems downtown. Office vacancies remain high, and converting office buildings into apartments is complicated and expensive. But it’s difficult to walk through Lower Manhattan today and see the place that so many people feared might never recover.
Real estate is usually discussed in relatively short periods of time. This month’s inventory. This quarter’s sales. This year’s prices. Every once in a while, it’s worth looking at what can happen to a neighborhood over 25 years.
Lower Manhattan is a remarkable example.
Think Beyond The Deal,
George.