Lies, damn lies and statistics

Here are some fun facts to chew on while we’re waiting for anything, anything at all, to heppen in our real estate market.

Contracts

Jan.- June, 2006     371             July – Dec.  251

Jan. – June, 2007   329             July – Dec.  214

Jan. – June, 2008    242             July – Dec.  112

Year to date, 2009: 100

UPDATE: at the suggestion of a reader, here’s what happened in the $3 – $5 million range.

2006  – 118

2007  – 112

2008  –  57

y.t.d.  – 7

We have 160 active single family residences for sale between $3 and $5 million. 29 are spec houses.

UPDATE: David Ayers, the realtor who knows everything worth knowing, emailed me to correct my figures and said there have been 9, not seven, houses that have gone to contract this year in the $3 – $5 million range. Not that I doubted him but I checked to see where I went wrong and came up with 12 (!). David, what am I doing wrong this time?

7 Comments

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7 responses to “Lies, damn lies and statistics

  1. anonymous

    Even more gruesome if compare >$3MM or >$5MM contracts across time; and look at inventories of such listings across time

  2. anon

    Based on previous trends, it looks like the second half of this year will be below 100 contracts… And based upon the fact that Wall Street pays bonuses in January (under normal conditions), don’t expect many newly minted millionaires stepping in to absorb the supply

  3. anonymous

    Interesting data: so, about 10 yrs of inventory at YTD sales pace; $3-5MM is arguably sweet spot for IB first-yr partners; perhaps $5-10MM for similar cohort PE/HF guys

    Guess NYC generates about 1000 new partners at IB/PE/HF every yr (and a similar no. are annually pushed into “retirement”); nearly all tend to live in Manhattan or Greenwich (and a few lesser suburbs in Fairfield or Westchester); will be interesting to see what fraction of new partners opt to just rent for a few yrs as they observe housing prices and own pay/net worth dynamics in a post-bubble, post-meltdown world

  4. anon 1

    Anonymous @ 4:29 – those are numbers from a prior era. IB First-yr “partners” do not as a rule make $3-5 mm anymore. At many firms, a MD getting a $1 mm bonus gets 25-75% of it in stock that vests over several years. For many, the bonuses of past three years are now worth much, much less as their stock values have plummeted. And if you were at Lehman, anything put in the deferred comp plan just vanished. Ask any MD at UBS who has survived how bonuses were this past year (all stock, going down).

    People are not getting promoted at many firms, whether IB/PE/HF. There is so much surplus talent running around that you don’t have to promote people anymore. And for anyone promoted, you don’t pay them 2005-2007 era comp. As for the HF guys, ask one of them to explain to you how high watermarks work and when they think they’ll start making normal money again. And ask them if they think 2 and 20 will hold up over time.

  5. Old Greenwich Builder

    anon 1 has it right — I think is figures are spot on. The good old days for IB/PE/HF are gone for a while. The good news in the real estate market right now, for Financial Services people or anyone else, is:

    1) Fear of a never-ending market free fall is gone (thanks to March 9th and the Dow now in a more stable 8000+ trading range), so some people are now back in the market

    2) Real estate market “timers” will at some point be back in the market and sales will GRADUALLY start to pick up (like we say in May, which was actually a pretty good month, especially compared to the past 6 mos)

    3) Greenwich is and will always be an excellent place to live and raise a family — at some point people with decent jobs (including the now lower paid Financial Services folks) will just say, the heck with it, I’d rather pay less (especially now), but the sellers won’t take my dream price, so I’ll just pay the price. (ALMOST like the good ol’ days.)

  6. Egbert

    Old Greenwich Builder is a cheery chap, ‘cept that he’s advancing the argument that Greenwich is recession-proof because it has a great reputation. IB/HF people, in my experience, don’t ever “pay the price” if they can instead step on the jugular of the price and squeeze it dry.

  7. Old Greenwich Builder

    Agree with Egbert’s last sentence. This approach works when there is no competition (like now) though. At some point (could be several years), competition for good properties will reemerge and even Financial Services folks will have to pay up again.