Shadow SIGNED CONTRACTS

Throughout my daily travels in the real estate industry I hear about the subject of SHADOW INVENTORY. Granted, there is a significant volume of apartments not listed that constitute this inventory that is growing and of some concern in cities such as New York and Miami. But something else is hardly ever mentioned, especially in New York City that lacks a real Multiple Listing Service: shadow signed contracts.

Yes, I alone know of at least a BILLION dollars worth of signed contracts that exist currently around Manhattan: that is just me, off the top of my head......I imagine the number is far, far higher. Most of these signed contracts are located in new developments and were never officially listed in the systems. How on earth are we as an industry to be taken seriously when a significant chunk of data like this - that has the ability to sway markets - is simply invisible? Much of this data is actually 'good news data' that include some record-breaking enormous sales.

I have been preaching for decades about the importance of reporting and registering signed contracts versus just closed sales that often happen many months after a contract is signed especially in new development buildings. Yes, the closed sale is the ultimate indicator of pricing as it registers the exact closing price. But signed contracts are the best gauge of a market as it is happening and should be critical data to any buyer, seller or economist. Yet the New York real estate industry has sat back and not addressed this issue for years and allows for data to be concealed.....at the expense of all. It is certainly understandable not to want to reveal signed contract data if the volume of sale is not great. I get it. But markets shift and change and consumers and agents are not blind to this. Super-sonic sales speed is unsustainable, and the absorption rates we are experiencing now are normal. Slower than we'd like, but more normal than the 2011-2014 period.

I urge all in the New York Real Estate Industry to pool our resources, band together and do what I feel certain is in the best interests of the consumer: let's start to be much more transparent with our data so that agents, buyers, sellers, renters, developers, bankers, investors, etc can base their decisions on complete facts, not an abbreviated, selectively edited version thereof.