I have been tracking the Manhattan housing market in report format for more than 12 years, appraising it for more than 20 years and I often worry I became Manhattan-centric as a result. Things that I thought were pretty standard here I assumed would apply to other markets in the same way.
- rating a neighborhood by whether a resident can buy strawberries at 3am (never done that, but I have heard this discussed more than once)
- hailing a cab in a downpour to get to work (but doing this on a street going in reverse of the morning rush ’cause the odds are better)
- buying a few bags a of groceries at a time because thats all that can be carried (but making the argument that its because you eat only fresh food)
- taking a dozen elevators rides per day and still remain fascinated by the changing floor numbers
- not making eye contact with oncoming strangers when walking
- taking comfort in the fact that 80% of all clothes worn are black
- and the subways are actually pretty clean and reliable
…ok you get my point.
…while Manhattan real estate related assumptions include…
- the fact that price per square foot rises with larger properties
- new development is nearly always targeted to the upper end of the market
- its tough to build without tearing something down
- co-ops are a pretty standard form of ownership
- average days on market is about 120 to 150 days in a balanced market
Average days on market is measured by taking the number of days from the last list price change, if any, until contract date.
For the 2nd and 3rd quarter, the average days on market in Manhattan was 144 and 150 days respectively.
This market stat should be relatively consistent around the country in housing markets that are relatively price stable (coming out of a boom period) like Manhattan is. When I began crunching the data for Long Island (Queens, Nassau and Suffolk Counties) this stat was pretty consistent by county and averaged 86 and 83 days respectively. This was curious to me because it was so different than the Manhattan market, yet the position of the markets is fairly similar. In fact, the argument could be made that Long Island is a weaker housing market than Manhattan right now. So why is the average days on market so different (lower)?
I was speaking to an appraiser last week who covers Northeast Ohio and his marketing times for a market in weaker in health to Manhattan is about 90 days. Another appraiser I know in [Charleston, SC](http://www.charlestonmarketreport.com/) reported a 54 day marketing time this quarter for a market in a similar stage.
My 120 to 150 day rule of thumb is sort of on all Fannie Mae forms used for nearly all residential mortgage lending. There are three choices for describing marketing time:
- Less than 90 days,
- 90-120 days,
- greater than 120 days
(translation: fast, medium, slow).
The [Employee Relocation Council](http://www.erc.org) defines reasonable marketing time (a balanced market) as 90 to 120 days, yet most markets that are argueably buyers markets (not balanced = slow) actually average a shorter period than this standard.
I also looked to the stats in an appraisal organization known as [Relocation Appraisers & Consultants [RAC]](http://www.rac.net). Their appraisers (self-included) are considered among the best relocation appraisers out there and they compiled stats in each of their markets. The [RAC Report](http://rac.net/rac_report/2006q2/index.html) covers a variety of markets across the country and like New York, the results are also all over the place.
Since the 3Q results are not posted by RAC yet so I looked at the 2Q results. They break out the DOM figures by price strata so I selected the middle price strata of each market and rounded.
- Las Vegas (40 days)
- Los Angeles (55 days)
- Atlanta (75 days)
- Texas (overall – 50 days)
- Denver (100 days)
- New Jersey (40 days)
- Chicago (western suburbs – 90 days)
_plus the previously discussed 2Q results_
- Manhattan (144 days)
- Long Island (86 days)
- Northeast Ohio (90 days)
- Charleston, SC (43 days)
One lesson in all this is that real estate is local but I wonder, is there a different efficiency in the way a property is sold or takes to sell in different markets? Is it the legal process? In other words does the time it takes to actually go to contract once the meeting of the minds occurred play a key variable here?
And how do those fresh strawberries get to Manhattan all year ’round?
UPDATE: Speaking of Strawberry Fields, did you see the full page ad by Yoko Ono in the NYT this Sunday? I’ll always remember exactly where I was on December 8, 1980.
The strawberries are brought in by truck.
A few thoughts on Manhattan days on market and how it compares to other parts of the US of A.
Interesting to see how different we are, as we apparently have much longer time to sell than in America. When all you see is one market, it is hard to get perspective.
Do people elsewhere have fewer real choices? Do they more often buy location, then fix up the house (if necessary) to meet their specs? I think (not knowing anything about other markets makes it easier to speculate) that there are many more choices in Manhattan than elsewhere that could work for a given buyer.
If there are only so many homes in Manhasset Hills (or whatever the ‘tony’ more exclusive nabes are in ‘burbville) – and not many of them on the market at any point — you buy the one of 50 when it becomes available. But here you have a few dozen possibilities in one area of Manhattan, and few dozen more in three or four other neighborhoods in Manhattan also.
I hear from RealtorsÂ® around the country that if the buyers don’t buy one of the top ten listings you show them, don’t let them back in the car because they will “never” buy. But here, buyers seem willing to look at dozens upon dozens of apartments or lofts, and go to Sunday open houses for two months without remorse. So I think the (illusion of?) choice is part of it. If you have a million and a half bucks to spend in Manhattan you have a very wide range of choices by neighborhood, style, condition and amenities. Maybe not so varied a choice elsewhere….
12.8.80 always brings a pang. I was in a cab going from east midtown to the West 60s and we went through Central Park (was it around ten PM?) and saw lots of people milling about on CPW. Then stayed up all night listening to WNEW-FM.
that formatted funny; it was 1 then 2 then 3 when it left my PC
We’re at 90 days in Boston, which should seem pretty good, but feels reallllllllllly slow.
NYC and Long Island could be seen as culturally similar markets. Both congested and contentious. Since NYC transactions are mostly coops instead of single family homes, does board approval account for the additional 58 days?
Nope, since the time between contract amd closing (when the coop delays occur) is not included in JM’s question about “the time it takes to actually go to contract once the meeting of the minds occurred”.
Ohhhhh … another thing, this is the first time I’ve heard “days on market” described as the period between final list price and going under agreement.
I have always assumed it was from day of first listing, with first agent, until going under agreement.
Is it common to go with final?
What does “contract date” mean? From date of last price change to — – date of contract sent to buyer? – date contract signed by seller? – date of closing shown in contract? – date signed contract delivered back to buyer?