Like many things in New York, it started early in the week, on a Tuesday.
The New York Times on Oct. 4 published a story headlined “Real estate cools in hot markets like Manhattan.” It had the lead: “A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York.”
The story was built around the third-quarter residential market report published by appraisal firm Miller Samuel and brokerage Prudential Douglas Elliman. That market report showed, as the Times noted, that “the average sales price fell almost 13 percent in the third quarter from the second quarter.”
A drop in prices? In Manhattan? Uh-oh…
The New York Post, also on Oct. 4 and also citing the Miller Samuel report, swung for the fences. “The bubble is in trouble,” read the lead of its story, and an anonymous “nervous” broker was quoted as saying (through tears, we can only imagine), “The numbers are disappointing, no matter how you spin it.”
Was the real estate boom over just like that? By Monday, the average media consumer would’ve thought so.
Several outlets in and way outside the city ran with the Times’ and the Post’s reporting (including, initially, The Real Deal) and cited in particular Miller Samuel’s average sales price plunge. The Drudge Report one of the most visited blogs on the Web heralded the Times’ story with a police siren graphic and let readers know, in red letters, that the story was… “developing.”
But it didn’t for two reasons. One, the Miller Samuel report showed a generally strong market, including an all-time record price per square foot for Manhattan apartments and increases in average sales prices for studios and one-bedrooms.
The second reason the story didn’t really develop was that it was over by the end of that first Tuesday. Why? The story gave way to the storyline. Example: On Oct. 17, New York magazine published a story in part headlined, “The numbers are in, the slowdown is here, and everyone’s spinning and scheming to ride it out.” The story, like its predecessors, focused on average sales price drops, and not, say, on the price-per-square foot record or the strong one-bedroom and studio sales market.
It didn’t have to because the storyline took care of the rest: Didn’t you hear, the Miller Samuel report said the market’s cooling? Oh, well, then, the boom must be over.
Jonathan Miller, the “Miller” in Miller Samuel report, put his analysis on the couch in an Oct. 9 post on his blog, www.matrix.millersamuel.com, entitled “Manhattan after the hoopla over a 12.7% drop: What really happened in 3Q 05?” It perhaps best explains the storyline’s genesis.
“What’s been fascinating about this whole experience,” wrote Miller, CEO of his semi-eponymous firm, “is how much coverage was given to the average sales price statistic, which could not stand on its own without explanation. Hopefully, I don’t sound too cynical, but this stat was likely used because it showed the most negative result.”