Nov. 29, 2006 - precise numbers are credible … but accurate?? / NYO Qs re C-H rental vacancy rate
I blogged about the widely-quoted Manhattan rental vacancy “index” produced by Citi-Habitats last week (does anybody here know stats?), wondering how statistically significant it is.
Observer also wonders
Tom Acitelli at The New York Observer (late of The Real Deal; he can’t seem to escape The important capitalized article The…) wonders the same thing in Manhattan Rental Market Not as Tough as They Say (from page 10 in the 12/4/2006 edition of The New York Observer):
“those wishing to determine Manhattan’s rental vacancy rate are toiling in an uphill battle against incomplete data and an ever-changing market.”
estimates like zestimates
Acitelli identifies three factors that make “estimates” of rental vacancies seem like zestimates: 1) Manhattan has no true multiple listing service, 2) no one tracks coops and condos available for rent (Citi-Habitats does rental buildings only), 3) no one tracks available subleases.
I am not sure the source of his information about Citi-Habitats:
Citi Habitats bases its monthly vacancy rates on an analysis of its internal listings database, which includes 50,000 to 55,000 rental apartments. The analysis includes apartments in Manhattan below Washington Heights. The borough’s northernmost neighborhoods, Inwood and Washington Heights, are not, in fact, included in the analysis, and Harlem was only added this year.
monthly or semi-annually, 110 is a small number, right?
He refers to a monthly report (“[s]ince this time last year, the rental-market vacancy rate has been below 1 percent, according to Citi Habitats, settling at 0.80 percent in October, the last month for which data were available”) but I don’t find a monthly report on the Citi-Habitats website, only the semi-annual Black & Whites. As I said in my post last week (does anybody here know stats?), I read the Citi-Habitat Black & White Reports as based on no more than 110 buildings, not the 50,000 rental units Acitelli refers to. As I say, I can’t tell Acitelli’s source, but maybe he got it directly from someone at Citi-Habitats.
(A quibble with Citi-Habitats: why is this much quoted figure of 0.8% not been updated since 2005? If they do a monthly report, why isn’t it on their website? Mea culpas all around if it is there and I missed it.)
creating an INDEX out of whole cloth (best guesses), with trumpets
I agree with Acitelli’s conclusion and fact-based (skeptical) approach, however:
Citi Habitats’ attempt, then, like others, is a statistical best guess, only as thorough as the data—which, by the very nature of the Manhattan rental market, dangle incompletely. For instance, 50,000 to 55,000 apartments may seem like a lot for a survey (and so it is, for a rental survey), but there are at least 25,000 rental buildings in Manhattan, according to the Web research engine PropertyShark.com
And Acitelli adds a source with which I am not familiar that also sounds both precise and credible:
the city’s normally tri-annual Housing and Vacancy Survey put the Manhattan rate at 3.8 percent at the end of 2005, nearly unchanged from 3.9 percent in 2002.
Acitelli provides estimated residential rental vacancy rates in LA (around 3%), Chicago (around 6%) and Boston (around 5%) from a commercial real estate broker. Reporting a figure as “around 5%” does not sound half as accurate as reporting a figure with tenths of a per cent (a la Citi-Habitats), and it is probably 75.4% less likely to be quoted than a “Vacancy Rate INDEX”, but we are talking here about “estimates”, right??
But maybe Citi-Habitats wants to hear trumpets. Again, to quote Acitelli:
This low vacancy rate is trumpeted by the media soon after each report, sparking an outbreak of woe among recent college graduates, newcomers headed for Manhattan, ex-boyfriends who got the boot—just about any person trying to move to Gotham.
Tip of the hat to Curbed.com for linking to the Acitelli article in NYO.
© Sandy Mattingly 2006
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