Property Grunt

Monday, January 08, 2007

Stronger winds

In my last two entries I presented my perspective on the state of the Manhattan market and the conflict of what is occuring nationwide. My intuition maintains the stance that the winds are shifting towards a signifigant downturn and it was furhter fortified by this link.

In a nutshell, any rebound that occurs in the housing market won't be enough and the housing market has not fully recovered and in fact has just begun its enfilade upon us.

The Great Jonathan Miller, who I know all of you are going to be seeing at Real Estate Connect, talks about the national housing rebound that acted as viagra for brokers, sellers and Wall Street.

But Miller begs to differ.

Housing market hopefuls were uplifted by the Commerce Department’s 3.4% increase in purchases of new one-family homes. In fact, I grew annoyed because new home sale stats are very misleading and to place hopes on a housing rebound based such a flawed statistic, is a waste of energy.

Translation: You have to be kidding me.

You can understand Miller being so perturbed once he pointed this fact.

In fact NAHB estimated that in November 2006, cancellations constituted 38 percent of gross sales, compared with 26 percent in November 2005 and about 18 percent in the first half of 2005. This means that 150k to 200k homes are being counted that never got built.

This all presents an interesting scenario because if it is truly the case that housing market has only begun to crash and burn, will Manhattan be able to hold its own or will it eventually fall like the rest of the markets?