We caught this headline across Bloomberg, “Manhattan Apartment Sellers Cut Prices Most in 5 Years in 2008.” According to Miller Samuel, the average listing discount climbed to 4.1%, the highest since 2003. The number of condos and coops for sale jumped 41%. In 2007, the number of sales dropped 23%. Fewer sales and a rising number of units for sales suggests continued price declines going forward.

February home sales set to plummet
Pending home sales fell 7.7% M/M in January following a downwardly revised gain of 4.8% in December – this has turned out be a highly volatile series. This result was more than twice as bad as consensus estimates and underscores the depressed state of demand. In short, these figures suggest that falling sales will persist in upcoming months despite record affordability amid lower home prices and mortgage rates. Mortgage applications for purchase, down 17.3% month-todate versus January, also pointing to a sharp drop in February home sales. Regionally, pending sales in the Northeast and South posted the largest declines (-12% M/M) while the Midwest recorded a lighter 9.3% M/M drop. Activity in the West was the sole bright spot, up 2.5% M/M, and was likely boosted by distressed related sales. The NAR noted that such transactions accounted for 45% of activity in January. Indeed, home prices in the West have been hard hit,
down 26% Y/Y and have been led lower by deeply discounted foreclosure sales. All of the negative sales data – from last week’s drop in January new and existing homes sales to yesterday’s pending results underscores the news out of Toll Brothers – it just reported its sixth consecutive quarterly net loss.