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How Relevant Is That Survey?

by Peter G. Miller
August 30th, 2007

Blogger Noah Rosenblatt runs UrbanDigs.com, a very smart look at real estate in Manhattan and beyond.

He has two August 29th posts that have important national implications.

First he talks about the Case/Schiller Index, a benchmark which looks at sales of the same properties over time to gauge local real estate trends. The Index shows a 3.4% price decline in metro New York, but Rosenblatt says the study is unusable for Manhattan. The reason? As Rosenblatt notes, the New York metro area is defined to include “Fairfield CT, New Haven CT, Bergen NJ, Essex NJ, Hudson NJ, Hunterdon NJ, Mercer NJ, Middlesex NJ, Monmouth NJ, Morris NJ, Ocean NJ, Passaic NJ, Somerset NJ, Sussex NJ, Union NJ, Warren NJ, Bronx NY, Dutchess NY, Kings NY, Nassau NY, New York NY, Orange NY, Putnam NY, Queens NY, Richmond NY, Rockland NY, Suffolk NY, Westchester NY, Pike PA.”

Rosenblatt’s point is that all real estate is local — really local. Thus when someone asks about the latest national survey my sense is that such information is interesting, statistically correct but not as interesting as the most recent sales in my neighborhood.

The second item Rosenblatt hits is how to determine when the marketplace reaches bottom. He suggests that when inventory begins to clear out that we are somewhere near the end of a down cycle.

I think this is generally on target, however I see a lot of homes that are no longer in the sales inventory because they haven’t sold after months and months of marketing — they’re what I call perma-listings. With such listings gone, inventory seems lower but really what we’re seeing is so little buyer interest that listings fall off the map. This is a different situation than fewer listings because homes are selling, so sometimes a shrinking list of homes for sale may be nothing more than a false bottom.

Take a look at UrbanDigs.com — you can find some interesting and provocative ideas there.

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This entry was posted on Thursday, August 30th, 2007 at 12:52 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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