By Mike McPhate
It was the best of times for Manhattan real estate, it was the worst of times for Manhattan real estate.
A new stack of reports does as much to confuse as to enlighten about whether the bubble is about to burst.
Five agencies released reports last week that reached varying, sometimes opposite, conclusions. Prudential Douglas Elliman found the average sales price of Manhattan homes up 12 percent from the year prior; Terra Holdings found it down 4 percent. The Corcoran Group said total sales volume was down 17 percent; Mitchell, Maxwell & Jackson said it was up 5 percent.
“There’s a bunch of noise out there,” said Richard Hamilton, senior vice president at Halstead Properties. “Take any of it with a grain of salt.”
Since the exercise of gauging the market began in the early 1980s it has grown into a cottage industry with each brokerage proclaiming their report’s superiority—and sometimes spatting.
Michael Martin, director of research at Mitchell, Maxwell & Jackson, said rival Prudential Douglas Elliman’s study reached “impossible” and “contradictory” conclusions.
The Prudential report is the only one to gather sales data for the entire island of Manhattan instead of taking samples and extrapolating. “Honestly, I don’t understand how they could do that,” said Martin. “There is no way they’re getting all the sales from Inwood and Harlem.”
Jonathon Miller, whose appraisal firm Miller Samuel conducted the Prudential study, said his company captures about 80 percent of all Manhattan transactions by the day the quarter ends, and about 95 percent a few months later as lagging deals are finally closed. Miller dismissed Martin as a “trainee”, an industry term for someone with an appraiser assistant’s license, the lowest of four possible credentials.
“He’s assuming that his number is correct. That’s what’s amazing,” said Miller, calling Martin’s numbers low. The attack on his methodology, Miller said, is “just blatantly irresponsible.”
Whichever of the reports is most accurate, analysts agree that they have little relevance to individual buyers and sellers. Ultimately agents with local expertise are best equipped to gauge value across Manhattan’s asymmetrical market, said Hamilton. “None of these reports are gonna tell you what’s happening with a specific apartment.”
Reports: How Accurate?
It’s long been a quarterly ritual for brokerages to analyze the health of the city’s real estate industry. But the reliability of their sums is anyone’s guess, say analysts. Data on home sales is gathered from public records, managing agents, brokers, buyers, sellers and various subscription services. The accuracy of any study depends largely on the diligence of the researchers, who must weed out incorrect sales data.