Hot Summer Real Estate Market…Really?

There is no doubt that transactions are taking place right now at all price levels with an absolute frenzy occurring in the ultra luxury ($10M+) Manhattan residential real estate market.  Having said that, I’m still here with anecdotal evidence of a quieter market in the past several weeks as I and my colleagues although still somewhat busy are experiencing a bit of a lull in the market.  In fact, just a few days ago I wrote about this welcome calm in the Manhattan Real estate market. Tom Acitelli of The New York Observer disagrees as seen in his article yesterday, This Summer, No Cooling Off for Manhattan Residential Market.

Simply put, the market hasn’t had the ups and the downs of the national housing market. No bursts, busts or slumps here—just more of the same, quarter in and quarter out, year after year, going back at least a decade and certainly running through the last few years. While not the most riveting story line, Manhattan as steadily successful perhaps best explains the housing market’s performance, now and as it will likely unfold this summer.

Over the last decade, Manhattan home sales have either gone up in the summer from the spring, or down—but merely slightly.

In 2006, condo and co-op sales increased over 9 percent from the spring through the summer, according to Miller Samuel. In 2005, sales dropped over 8 percent from the spring to the summer. In four of the last 10 years, sales have dropped from spring to summer, but never by very much; and both seasons, together, remain generally the busiest times of the year for Manhattan home sales.

In fact, it’s impossible to find a slow summer in any recent year. Take 2002, the year the housing boom really took popular hold nationally. The number of closed Manhattan sales dropped from the spring through the summer, but the number of summer sales—2,366, according to Miller Samuel—remained higher than in the winter or the fall.

Again, my market pulse is anecdotal based solely on my own business and that of the 200 or so agents with whom I rub elbows every day.  The top producers in my office are all talking about how things have quieted a bit since mid May and some are even nervous about when it will pick up again.  The fact is that traffic is down at open houses and buyers seem to be exercising more patience while searching for their homes.  Inventory has also dropped significantly (via Matrix).

I wonder how much the stats are skewed by properties that go to contract in the Spring and close in the Summer months?  I guess we will all have to wait and see what 3rd Quarter numbers look like come September but I still suspect that this Summer will be more relaxed for my industry than the typical January through May sales frenzy.