Friday, July 28, 2006

An Amateur's Analysis of the NYC Housing Market:

Back in January, I wrote about a little experiment I'd been doing: tracking the number of apartments listed for sale on the NY Times website. I thought it would be interesting to see how it changed over time-- it's no substitute for hard data about sales prices but it's the only data I can personally compile that is some indicator of the state of the real estate market. In January, I didn't think the data I had was very conclusive, since I didn't have year-on-year comparisons and real estate is somewhat seasonal. But I started my tracking on June 29, 2005, so now I'm starting to have a sense of how the variance is from a year ago:

You can see how dramatic the change is in the Manhattan listings. The Brooklyn lines look flatter in my graph but still, the total Brooklyn listings today are 1,850 vs. 1,242 one year ago. For Brooklyn, I also broke out the listings priced under $600,000, which are 601 vs. 428, an increase of 40%. If you look at those by neighborhood, Park Slope and Brooklyn Heights are up 42% and 46% respectively. Fort Greene is up 67%, while Williamsburg is only up 11%.

According to this post at Matrix, prices are still up over 1 year ago, in Manhattan at least (for all but the highest priced apartments). And from my gut feelings about the prices I see in ads, I'd say that in Brooklyn prices are at least holding steady with what they were a year ago or are slightly higher. What I do know for sure is that there are very few apartments in my price range in the areas where I'd like to live, and that never seems to change.

Anyway, it's fun to play with data. I just wish I had more of it to play with. The number of NYT listings is only a small piece of the picture. Even sales prices are not enough, since with mortgage rates changing, prices could stay the same while effective costs go up. Here's what I really wish I could graph: the change in average monthly cost per square foot over the past 10 or 20 years. It would factor in the cost of borrowing and the variety of apartment sizes and give you something that you could really compare to the change in monthly rents. Jonathan Miller, hear my prayer!


Anonymous said...

Who knows, your "index" may well be more accurate than the surveys from the government.

Anonymous said...

Price drops lag inventory growth. Since inventory has just begun rising this year, you probably won't see price drops till next year. After that you can expect the trend to continue for a few years - US real estate bear markets last about 4 years on average (according to the IMF).