New York industry craves better market analysis
While I agree with several of Tom Acitelli’s conclusions about the Manhattan residential market in his article on the downward trend in prices (At the top end, it’s not quite as bad, July 2006), I wonder if it is not possible to exclude that least helpful of numbers, the average price, from the equation when discussing market facts.
Average price is completely unreliable and gives a distorted picture of a marketplace in which there are numerous more significant indicators of flat prices and rising inventory. Median prices, which Mr. Acitelli also cited, are, of course, a little more accurate, while prices per square foot are best.
Among other issues, since average price is usually based on closed deals, it is always several months out of date (as are all the indicators except signed contracts, a fact few writers acknowledge). For another, condo sales in new buildings, an extremely significant force in today’s sales climate, are not factored in since they tend to have contracts today for closings six to 18 months away.
And, most importantly, why do articles about the current market so consistently emphasize the negative? After years of runaway price growth, a year or 18 months of flat prices is precisely what this market needed in order to stabilize! While it is difficult for all of us to get complete and accurate information, our market is crying out for real analysis. I hope we can count on The Real Deal to give it.
Frederick Peters
President, Warburg Realty
Manhattan