Pending Sales Surged 31% in October

The October StreetEasy Manhattan Condo Market Report revealed a flurry of activity from both buyers and sellers, which accounted for a 31 percent jump in pending sales from September to October, the largest monthly gain since May 2013.
Alan Lightfeldt

Alan Lightfeldt, StreetEasy

The October StreetEasy Manhattan Condo Market Report revealed a flurry of activity from both buyers and sellers, which accounted for a 31 percent jump in pending sales from September to October, the largest monthly gain since May 2013.

This uptick follows two months of modest inventory gains and faltering price growth.

“The boost in condo inventory and pending sales was a welcome sign of buyer and seller activity, and in line with what we would expect at this time of year,” Alan Lightfeldt, StreetEasy Data’s scientist, told Commercial Property Executive. “October is the last stop for buyers and sellers before the winter months put a chill on home sale activity.”

Five of the last six Octobers saw double-digit monthly growth in pending sales of all homes—including condos, co-ops, and townhomes—ranging from 20 percent in 2009 to this year’s 40 percent. However, despite the welcome gains in inventory, the market is still experiencing historically low supply. The report shows October condo inventory was nearly 9 percent below the 5-year monthly average for Manhattan and is expected to fall further during the winter months.

The total number of condos listed on the market in October rose 3 percent from September, an expected increase that occurs leading up to winter. Inventory was 10.5 percent above year-ago levels, and reached the greatest monthly supply since October 2012.

Although StreetEasy anticipated a boost in contract activity in October, according to Lightfeldt, this year’s seasonal boost was larger than expected.

“Pending sales were up 31 percent from September, the largest monthly gain since May 2013,” he said. “Last month’s flurry of home sales activity shows that buyers were ready to strike when the conditions were right—and October hit the sweet spot with greater inventory and faltering prices.”

The report forecasts condo prices will decline in the winter months ahead, in line with the traditional seasonal slowdown. In fact, the StreetEasy Condo Price Forecast predicts that prices will fall 2.4 percent in November.

“Buyers and sellers typically avoid the cold winter months and wait until spring to revisit apartment hunting, which is consequently when we typically see a seasonal resurgence in inventory and contract activity,” Lightfeldt added. “Real estate shopping is an out-and-about activity and Manhattan homebuyers don’t seem to want to spend more time outside than they absolutely have to.”

Looking ahead to 2015, Lightfeldt predicts longer-term price reductions and increases in contract activity will be primarily dependent upon continued growth in inventory.

“In order for there to be any shifts in the condo market in 2015, we’ll need to see significant additions to the supply side, which we hope will come the traditionally busier spring buying/selling season,” he concluded.