Oct. 26, 2006 - on average, up, way up and down doesn’t trend / price per foot volatility
The Miller Samuel quarterly report that just came out about coop and condo sales in Manhattan shows how volatile key numbers can be with such a small sample as the subset of Manhattan LOFT sales in any three-month period. Applying such numbers to determine trends can be dangerous in real time.
In the first three quarters of 2006, the reported average price per square foot for lofts has been $1,043, $1,170 and $1,081; while the Fourth Quarter of last year was $941. I did not study enough statistics in college to do a better job of analyzing the sample size here, but with “only” 153 closed loft sales (coops and condos) reported in the Third Quarter by Miller Samuel, it would not take a very large shift in the mix of lofts sold (high end + new vs. classic, un-renovated) to shift the average price per foot. (They report over one thousand coop sales in Manhattan overall in this period, and another thousand condo sales – providing *much* larger “n” for those stats.)
In a different context, $1,043 per foot seems like a perfectly healthy number – unless compared to $1,170/ft. This illustrated the problems of trend-spotting from the middle – during a trend. It will take a couple of quarters or more to see which way thee trend is going on this metric.
© Sandy Mattingly 2006
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