Definition of Principle

It has often been said that real estate agents and brokers in NYC are not exactly known for their ethics, morals or values. Let’s face it, we have a really bad reputation here in Manhattan.

Today, I was reading a few real estate sites and the message boards were full of anti-broker comments.  I must say, it is always disheartening to come across those that do not practice a set a values in this business.  On the flip side, I have had the pleasure of working with some really great brokers that always do the right thing — even if it means walking away from dishonest situations.  Over the years I have diligently tried to change that perception of the shady broker–it is actually one of my written goals.

Recently, without going into details or tarnishing the image of the individuals that are involved, I was put in a compromising quandary here in NYC real estate.  Something I could not agree to do.  So, I simply said,  “ I cannot do it because of the principle of it!”

It is nearly seven days after that meeting and nothing has been resolved.  My children, Grace and Sam asked me tonight about the status.  By their questions, I also realized they, like those of last week, do not know what is meant by me when I say, “it’s the principle of it”.

So, I used a very simple analogy to explain it to my children.

I said to them:

“Let’s say you worked really, REALLY hard all quarter long at school and earned an “A” in every subject. During that same quarter you happened to notice that a really popular classmate (whose family gave a lot of money to the school) was cheating – you said something to the teacher about the popular kid cheating and never brought it up again. You actually never thought about the kid that cheated again because you were too busy working for those As!   Even though you are not popular, did not come from a wealthy family -like your classmate, you were really proud of what you accomplished and could not wait to get that report card. 

It is now the last day of the quarter and you are waiting for your teacher to give you your report card and see your name on the honor roll! But, your teacher kind of made it difficult for you. Your teacher said to you, that in order to get your report card and be on the honor roll, you would have to sign a document that said you never saw or reported that your classmate was cheating…What would you do?”

Sam said: “Mom, that’s just not right!”

Grace said: “Mom, that would be a bribe…”

Sam said: “Mom, that would make me a cheat too by lying…(long pause) I could not do it.”

I smiled and said: “That is what is meant by: it’s the principle of it!”

Grace and Sam replied: “We get it Mom.”

Definition of Principle (n):The collectivity of moral or ethical standards or judgments: a decision based on principle rather than expediency.

The Signature in Real Estate

Over the years, I have rolled my eyes when I have received emails with huge signature taglines and have kept my thoughts to myself.   However, this evening, as I was cleaning out my “inbox” in Outlook, I noticed that the majority of the huge mail items were from real estate agents –mainly, because their “signature” attachments are so large.  

When did the “signature” become more important than the message?

Example 1:  An agent sent a one sentence message to me that was “26KB” because his signature line was 4 inches –I am not exaggerating. A signature that included:  his name, his personal logo, his official title,  his contact info, all of his awards, his broker’s logo, a movie attachment (about himself), a link to “his properties” and a “think green logo”.  (I refrain from commenting on the “green” aspect of such a signature!!)

He is not alone in this tacky display of inconsideration that is interpreted by many (in the profession) as someone that is a genius to “Branding” and to others as rude…

Example 2: Another agent had a similar signature, but, with a few more additions: follow me on twitter (link); following me on Facebook (link).

I thought to myself:   “Are you kidding me? How are you taking care of your clients with all of this self- branding via social media? Do people really care that you showed an apartment and then went to Pastis — is this why you never submitted my offer?” 

When did the “Brand” replace the “product”?  When did the “product” become the agent (broker) and not the apartment (and client)?

A Greenwich Village Soliloquy

In the past I have made an effort not to be biased in my writings of neighborhoods within this island called Manhattan; but, this evening I have decided that my romance with Greenwich Village needs to be voiced on this page.

It has been said that, “the Village is the most significant square mile in American cultural history”.

I must admit, that it definitely has made a significant impression on me: from my pre-teen years in a small college town in Ohio that leads to my passion as a professional in this city today. 

Proustian memory took its hold on me as I walked through the Village today…

Flash to 12 years old:  In my hometown of Wooster, Ohio I was learning a piece of music, “Still on this Shining Night” by Samuel Barber. The lyrics to the piece haunted me and I needed to find out more about this James Agee that inked them. So, I  fiercely studied Agee’s “Descriptions of Elysium” and other parts of Permit Me Voyage. I became slightly obsessed with Agee from that age of twelve. Because of my obsession with his writings, he introduced me to the photographer, Walker Evans in his book Let Us Now Praise Famous Men. Both Agee & Evans were residents of Greenwich Village.

Reflection to Teen Years: Still in Wooster, I would take escape from the mundane rural life and visit my public library. I would sit for hours and devour huge art books working my way up to 20th century masters including on again off again Village residents as Winslow Homer, Diego Rivera and John LaFarge. Not knowing then that other residents such as Man Ray would peak my interests so many years later.  And that abstract expressionism, which found its tone in Greenwich Village would be a style that I would want to learn more about now in my thirties.

Spell of 18 years old:  In Cleveland, I found myself massively in-love for the first time. My first love introduced me to the works of Jackson Pollock. Pollock lived at 46 Carmine, 47 Horatio, 46 East 8th in the Village.  I in turn introduced my first love to my fascination with the writings of Henry Miller—a resident as well. And then, heart-break entered my world. During the laments of such agony with my once (naively) betrothed, I read Kahlil Gibran’s, The Prophet. I am reminded of my first engagement with heart-break every time I pass, 51 West 10th Street – where Gibran lived.

Of course there are so many “Great Minds of the Village” that influenced me over the next twenty years -including important social movements. But, today was just a quick flash to my youth, reminding me, I have always had a connection to this neighborhood. It started in Greenwich Village for me–even though I had never been.  

I  desire to make my own imprint on the Village one day. Maybe, a real estate legacy of some sort…

 

Celebrate the Village in 2009:

Summer events sponsored by the Greenwich Village Society for Historic Preservation

Beyond the Beatniks: The Hidden History of St. Mark’s Place
A Walking Tour with Eric Ferrara
Sunday, July 12
1:00 – 2:30 P.M.
Meeting place given upon reservation.
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

St. Mark’s Place staked its claim as an epicenter of pioneering radical arts, activism, and counterculture in America over half a century ago — but there is much more than meets the eye. Before the beatniks, hippies, and punks (and way before the t-shirt and yogurt shops), St. Mark’s Place served as an important social and political hub for the ever changing immigrant groups populating the neighborhood over the last 150 years.

On this tour, we will peel back the layers of myths, legends, and misconceptions of St. Mark’s Place to reveal little-known history about this fascinating street and time capsule of East Village/Lower East Side/New York City history.

Eric Ferrara is a fourth generation/native Lower East Sider, published author, licensed guide, and executive director of the East Village History Project and East Village Visitors Center. Ferrara offers years of unprecedented research along with personal anecdotes and oral history which make for a truly unique experience.

This event is co-sponsored by the East Village History Project/East Village Visitors Center.

An Evening at the Jefferson Market Garden
Featuring the cast of the Greenwich Village Follies
Tuesday, July 28
[Rain date: July 30]
6:00 – 8:00 P.M.
Jefferson Market Garden
Enter on Greenwich Avenue at Sixth Avenue and West 10th Street
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

The Village on Film Presents: Wait Until Dark
A GVSHP Film Series
Thursday, August 6
6:30 – 9:00 P.M.
Neighborhood Preservation Center
232 East 11th Street
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

Following our May screening of Next Stop, Greenwich Village, GVSHP presents Part Two of our Village on Film Series.

Come see Audrey Hepburn’s Oscar-nominated performance in Terence Young’s Wait Until Dark. Hepburn plays a recently-blinded woman who lives on St. Luke’s Place. After her husband agrees to carry a doll over the border for a stranger, Hepburn’s Susy Hendrix is then terrorized by three criminals (led by Alan Arkin as Roat) who believe that their large stash of stolen heroin is inside the doll. The search begins benignly but turns violent as Susy catches on to the thieves’ plot and forms a plan of her own to level the playing field.

This film screening will be held in GVSHP’s living room with popcorn and goodies provided! Space is limited.

The Villagers of Ellis Island
A Walking Tour of Ellis Island with Tom Bernardin
Sunday, August 16
Meet at 11:45 A.M.
Meeting place given upon reservation
$12/person for ferry fees.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

Greenwich Village has often been celebrated for its rich immigrant past, including the South Village’s Italian community, the groups of French immigrants living on Bleecker Street in the nineteenth-century, and the Ukrainian heritage of the East Village. But how did these future Villagers enter our country? In many cases, they came through Ellis Island, the long-acknowledged immigration hub of the United States.

Join Tom Bernardin, former National Park Service Ellis Island ranger at pre-restoration Ellis Island and author/publisher of The Ellis Island Immigrant Cookbook as we explore Ellis Island and its connection to Greenwich Village immigrant groups. This program will provide an entire day’s jaunt out to Ellis Island, including a tour of the island exclusively for GVSHP followed by individual opportunities to explore the Island.

Dominos in Real Estate

 

Believe it or not,  I have not had a buyer purchase with a mortgage since 2006. This being stated, prior to that magical year I have been involved with hundreds of transactions that involved financing for properties – even those that were foreclosures and short sales. The later being the most difficult of experiences (on the agent side and the appraiser side).

I am embarrassed to write that I missed a very, VERY important ruling (in red below) that was put in motion by Fannie Mae on March 1:

“The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won’t back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity.”

 

Those words in red affect every condo buyer I have ever represented –even the cash buyers. 

Three days and 2 sleep deprived nights ago, I received a call from an owner I sold to in 2007 (cash purchase)…. 

 

Because of the current low interest rates, the owners thought they would take a mortgage on the 2007 unit and purchase another unit in NYC because the prices are pretty good right now.

 

Their phone call was to inform me that the lender would not lend on their unit because “one entity” owned 18.14% of the units in the building and there are too many rentals in the building. The subject building had been put on the “list” of buildings not to lend to —- the owners were not happy and wanted to back out of the other deal because of the “principle” of it all –NOT because they did not necessarily have the cash to follow-through on the new apartment.

I have to say, I understood their perspective. Most of us feel that if you dump cash into real estate you are going to be able to draw on it in the future – right? Not the case anymore…it is a new time in the United States with a lot of change that concerns all of us on some level.

 

I was told by executive leaders in the NYC real estate community, multiple loan officers and other highly experienced brokers: “it is what it is-nothing can be done.”

 

Guess what? I said, No, it cannot be and I started getting to work. I am not going to get into all of the tedious things I had to do or all of the individuals I had to “push” to help me retrieve the info I needed; but, I got the building off the “list”.  

 

My entire life I have had (some) issues with simply not accepting: “it is just the way it is – let is rest.” At times it has been my demise…

I do not know why I am so compelled to say “No, there must be a way.” I guess if I have not had some success with converting the “nothing can be done” to something has been done (but, differently), I would not be the fighter that I am. The “believer” that everything IS possible…

Maybe, we are so accepting of the “nothing can be done” mentality because we are not ready to see that it CAN be done.

 

 

Dominos may fall; but, the real game does get started until they are down.

War & Peace: NYC 1Q09 Market Reports

The 1Q09 Market Reports were released last week. Of course each one of them varied:

 

Halstead -The Report

Prudential Douglas Elliman-The Report

Corcoran-The Report 

 

As well as the Media’s interpretation of them.

A recent example:

Housing bust hits Manhattan(with a sub-title: Prices still rising in Manhattan real estate) CNN/MONEY

Honestly, no wonder buyers and sellers are in a state of confusion!

The one thing that really disturbs me is the % basis experts, brokers, and the media throw out there…20% below prime; 40% current list price; etc.

 

 

The fact of the matter is that all apartments; each neighborhood; and every seller has a different story and price-point.  There is no secret percentage.  Some apartments are priced well from the beginning-some are not; some neighborhoods have a greater demand; some sellers are desperate-some are not….To say units should be trading at 40% below list price is just out right foolish methodology for me to communicate to my clients. Mainly, because there is not enough data that has been specifically scrubbed and brokers really need to dig deep for the actual pricing. How can one truly take heed to media reports of condos that include those on East 87th (a walk-up building) all the way down to Walker Street (a full service building)? To me, that is like comparing General Motors with General Mills.

 

 

I have stated many times to my buyers (and sellers): 

“Every apartment has a different story.”  Throwing an average percentage out there is just a lazy broker to me —One that reads the media head-lines as if they are Cliff Notes. One thing that all those years working in a depressed market (such as Cleveland) taught me was to do my homework as if I was tackling a novel by Tolstoy.

When a buyer is serious: I pull the original deed, I pull the recorded mortgages, I pull the closed comps and in this 2009 market those comps also need to be blended with the current list prices…and, yes, I ask a lot of questions.

 

 

Pricing real estate is an element of  history, a measurement of now, a fraction of need and component of balanced consideration…Not an average overall %.

 

 

“What is Your Personal Stimulus Plan?”

This late afternoon I took acute notice to a proposed question:

“What is your personal Stimulus Plan*?”.

I smiled as a response.

For the simple reason, that I have always believed that I am the mastermind behind all of my success and malfunctions on this journey called, life. I did not have to wait for a recession to re-evaluate my circumstances; I do not cast blame on others or even desire the government to offer Kensyian-like means to bail me out.

I indeed have a personal Stimulus Plan: written in the form of goals with deadlines. I simply call it, my Life Plan. It is by no means a masterful entrepreneurial manual wrapped with the fiscal prophecy of quick success; but one swathed with small goals quilted with even larger goals that will take many, many years to achieve. With the thread being all of my personal values.

Peculiar it is to me that individuals wait for others to determine their fate. Currently, I am surrounded by a chorus of citizens singing the parts of real estate buyers that are waiting for the market to fall further. I must say, it is time for this Requiem to fade…it is time to step up to the stage and be a soloist.

Housing prices will fall further; but, at the bottom there will be a new found fear…panic to buy. Once the economists with the media announce the “bottom is here” or even the real estate market is picking up the beat: all of self professed “bottom feeders” are going to rise to the surface and the bidding wars will begin (again). Many of the choristers will miss the opportunity of that “great deal”. The time to find that deal is now; in the art form of diva-like negotiation; but, with reasoning– by that soloist buyer. That buyer that knows the real fiscal return in the purchase arrives at their doorstep in many years.

One of my goals in my Life Plan: I will have a MIT and Harvard education saved for each of my children by the time I am 44 (the age they will be in college). Many of my friends ask, “How are you going to accomplish this as a single mother in less than a decade and as a broker??!”.

I always answer: “I am buying a studio apartment in Manhattan in 2009; two in 2010; etc. Then I will sell the first after owning 8 years (and so on), pay for their education (in full) and finally, buy my own personal residence that also will be large enough to fill all of my cherished books!”

As a first generation American (maternal side), I am a witness that owning real estate builds wealth. My grandparents’ case: owning 38 pieces of real estate…slowly, as if sewing a beautiful quilt full of will and prosperity..

Maybe, it is one reason I am drawn to downtown Manhattan…the view of Ellis Island is a remembrance of the near penniless arrival of my grandmother holding my mother as they entered America…

I am not writing this night as a helpless artist painting with words; but, as a real estate advisor with a conviction that this time of fear shall pass, bringing a resurrection of affluence to those that choose to act now. 

 

 

 

 

“A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty” - Winston Churchill 

*Question from Wells Fargo’s Seminar: Meeting The Market Challenge in 2009

A Contemplation of a Serious Matter

To further understand the Wagnerian complexities encircling the economy which currently augments the score of real estate here in Manhattan; I attended a few “round-table” discussions performed by the executive leadership team of Halstead at REBNY.

 

The archives of data shared with the most experienced vocal insight of leaders within the industry were heartening for me; but, also brought a dissonance: For nearly a week, I have been trying to find some sort of counterpoint with real estate trades over the last years combined with this new century.

 

So, I decided to compose the data in a form that I could actually understand this NYC Ring Cycle:

 

	STUDIO	1BDRM	2BDRM	3BDRM
2007	$379,182.00	$631,648.00	$1,411,088.00	$3,482,993.00
2006	$389,430.00	$614,770.00	$1,325,048.00	$3,230,631.00
2005	$346,231.00	$570,974.00	$1,228,087.00	$3,091,631.00
2004	$275,791.00	$451,716.00	$1,015,680.00	$2,491,606.00
2003	$243,252.00	$412,181.00	$869,522.00	$2,262,754.00
2002	$248,305.00	$342,451.00	$768,653.00	$2,447,632.00
2001	$226,283.00	$344,250.00	$760,030.00	$2,285,924.00
2000	$152,971.00	$297,696.00	$767,508.00	$1,972,794.00
1999	$103,600.00	$218,061.00	$555,907.00	$1,510,412.00
1998	$123,070.00	$248,632.00	$504,317.00	$1,197,376.00
1997	$91,744.00	$171,731.00	$428,505.00	$1,205,836.00
1996	$79,130.00	$152,380.00	$383,234.00	$998,797.00
1995	$72,176.00	$142,685.00	$355,278.00	$1,000,486.00
1994	$70,985.00	$142,739.00	$369,060.00	$974,718.00
1993	$71,238.00	$136,471.00	$349,552.00	$921,855.00
1992	$83,131.00	$149,677.00	$368,031.00	$930,805.00
1991	$91,698.00	$162,423.00	$371,580.00	$871,036.00
1990	$116,523.00	$174,128.00	$438,077.00	$1,085,296.00
1989	$121,863.00	$184,042.00	$464,629.00	$1,171,664.00

 

Post analyzing the above composition (focusing on the 1990s), I have been haunted by an Unanswered Question:

 

Are we in for another dark dive that lasted nearly a decade?

 

As if I was forced to only see Central Park in the Dark while listening to the music of Charles Ives, I desperately needed to find a dissimilarity within this cycle…this simply cannot be the destiny of our Manhattan market!

 

What is the key difference between the 1990s and this second day of March within the year of 2009: population!

 

According to the Department of City Planning, the population of NYC in the 1990s was 7,322,564…this day it is over 8,310,212.

 

It is for such growth in our city’s population that I do not foresee such a “dark decade” in our future…Simply, we have a NEED to house the growing population in NYC…

 

For the record: I am a REALIST that processes information like an appraiser; communicates as a broker that is a BELIEVER that all things can change for the betterment with thought, knowledge and perseverance…a counterpoint in real estate? Maybe…

 

  

Printable version of the above data

*In music, counterpoint is the relationship between two or more voices that are independent in contour and rhythm, and interdependent in harmony. It has been most commonly identified in Western music, developing strongly in the Renaissance, and also dominant in much of the common practice period, especially in Baroque music. The term comes from the Latin punctus contra punctum (“point against point”).

Perspective in Balance

With effort to heal the disappointments of this week, I poured a glass of wine and filled my apartment with notes of the Bach Cello Suites this night. As Yo-Yo Ma’s interpretation soared through my apartment, I savored the perfect balance of Bach while reflecting on the potpourri of clients in my pipeline: their own personal “story” to purchase in Manhattan and a conversation with one client in particular, “The Artist.”

 

Everyone in NYC real estate talks and writes about the big dollar apartments (and buyers). I have too on occasion.  I guess it is sexier to talk about. It sells newspapers. It gives some a “hope” of what they may one day own and offers bitter fuel for those souls that find envy in others’ prosperity.

 

My client, “The Artist” is not going to sell newspapers with her purchase nor will she be the talk of Manhattan cocktail conversation. But, she does put a real crescendo on PERSPECTIVE.

 

The tête-à-tête on the corner of 69^th & Amsterdam

 

Setting the stage: The Artist is going into contract on an apartment and before she signed the contract, she wanted to look at one more apartment to validate her decision to move forward.

 

The Artist: Heather, I am sorry you had to show this apartment to me.

Heather: Are you kidding me? $240,000.00 is a lot of money. I get it – you need comfort of mind in your purchase. I find it odd that people here still think it is an insignificant amount of money. In most cities, a family of four could live on that amount comfortably for 5 years.

The Artist: Yes, I guess so; (she laughs) or buy a really great house in Poughkeepsie!

 

Perspective:

When you get right down to the matter of it, $240,000.00 is a lot of money for 450 square feet of space wrapped with northern light in America…

Balance:

Not too many buyers are finding apartments in Manhattan (with a fulltime doorman) for $240,000.00…

The Sentimental Broker

A client in Belgium (whom is a New Yorker at heart!) emailed me this summer asking: “Is Manhattan still your secret lover?”

So, on this chilly winter day, I have decided not to have words that fill this page with housing data and market reports. But, to write about my “secret lover.”

This past Saturday I experienced an uncomfortable coffee klatsch with a French man. He was complaining about New York, its residents and the lack of beautiful architecture.

In a passionate effort to spin his thoughts in a different direction, I voiced my love affair with New York as an historic aria:

“Manhattan has such a rich history that we all add to with chapters of our own lives. I am excited and thankful everyday that I am here!

How could you not appreciate that Bernstein lived in The Osborne, F.Scott Fitzgerald wrote at a pub in the West Village, Toscanini & Babe Ruth stayed at The Ansonia, George Washington celebrated his faith at St. Paul’s Chapel, William S. Burroughs wrote at the Chelsea Hotel, and all of those that came here with nothing but a dream and turned it into a wonderful tale of will?”

His response: “I could care less about the history -this city is nothing special.”

This was the end of our time together. Unfortunately, I have read many similar sentiments over the past weeks regarding NYC and why would anyone want to live here – mainly because housing is so expensive. My own family questions why I gave up a comfortable lifestyle in the mid-west to work in New York and do not understand that this city is a symphonic masterpiece for me.

In the tradition of an apprentice craving information, I devour books and periodicals resounding the history of the buildings and people that surround the green of Central Park all the way south to Wall Street. I embrace every opportunity that is offered here involving the arts, lectures on the economy, and individuals that spark my mind.

Manhattan for me is a Mecca of chaotic energy, a celebration of diversity with history and hosts exquisite architecture that fuels my obsession to be better: professionally, intellectually and spiritually.

So, there you have it. I have finally found true love in the form of an island and continue to romance it as if each day was my swan song…

 

 

.

Manhattan 4QFY08 Sales

*To view reports: Move mouse over brokerage name. Each “Report” will open in new window.

 

 

 

 

Yesterday, as I worked from my office I had CNBC on the television. The segment of interest dealt with the “Luxury Market”* in Manhattan.  Dolly Lenz (PDE) and Pam Lieberman (CORCORAN) really did not have anything that was “new” to say. However, Dolly did admit to having 5-6 deals that basically fell apart after contracts were signed and her high end clients walked from their significant deposits. 

Looking at the three reports from the BIG 3 in town the summaries are similar but the numbers are not…

As I have mentioned before: I wish the Department of Finance would restructure their process and methodology here in Manhattan. There should not be a discrepancy…

Prudential Douglas Elliman and Miller Samuel*

The Numbers:

Average apartment sales price: $1,485,102

Median sales price: $900,000

Average sales price per square foot: $1,183

 

Summary

 Report author Jonathan Miller, president of CEO of Miller Samuel:

 

“There was a decline in price levels and the number of sales of re-sale apartments. Due to a surge in new-development closing activity in the current quarter and a lull in activity in the prior year quarter, the number of new-development closings and price levels rose over the period; however, these sales reflect the market 12 to 18 months ago.

In contrast to the more modest trends of closed sales, contract activity in the current quarter was marked by a sharp decline in sales activity and price levels. A periodic sampling of sales contracts showed a decline of 35% to 75% compared to the same period last year. Current contract price levels show an average decline of 20% from August 2008.”

 

The Corcoran Group and PropertyShark*

The Numbers:

Average sales price for existing apartments: $1,275,000

Median sales price for existing apartments: $759,000

Average price per square foot for existing apartments: $1,073

Summary

Corcoran CEO Pam Liebman in the report’s intro:

 

“The Fourth Quarter is usually not the busiest one for property closings, since its resale contracts are signed in the always-slow Third Quarter (when people are off for summer vacation or starting the new school year they don’t think much about moving house). But with so few transactions in the pipeline, downward pressure on prices will continue until a sense of urgency is restored for buyers.

For this reason, it is important to consider new developments in the proper context, because most of their contracts were signed in 2006 and 2007 before the current economic slowdown was upon the market in such force. Prices of new development properties were strongly higher as several significant buildings – such as 995 Fifth Avenue and 170 East End Avenue – reached the finish line this quarter after several years of work.”

 

 

 

Brown Harris Stevens and Halstead Property*

The Numbers:

Average co-op sales price: $1,103,952

Average condo sales price: $1,713,124

Average sales price per square foot for townhouses: $1,550

Summary

Report author Gregory Heym, chief economist for Terra Holdings, the brokerages’ parent company, in the report’s intro:

 

“Closing prices for Manhattan apartments averaged $1,449,621 during the fourth quarter, up slightly from a year ago but down 2% from the third quarter. While closings at 15 Central Park West and The Plaza had inflated prices over the past few quarters, this was not the case during the fourth quarter. Removing these two buildings brings the average price down just $24,230 to $1,425,391, which would be up 2% from the comparable third quarter figure and the second highest figure on record. …

New developments continued to account for a higher percentage of closings during the fourth quarter. Comprising 42% of all sales, and 72% of condominium sales, they sold for an average price of $1,717,115, 3% higher than the prior quarter. As we have pointed out in previous reports, these deals are typically negotiated far in advance of when they close. On average, new developments that closed during the fourth quarter had their contract signed on Nov. 16, 2007.”

 

 

Crusading Economic Woes with Kindness

For months I have been thinking, reading and witnessing the economic disfigurement we are currently encompassed by. I am tired of cocktail hour conversations echoing the same chords of “it is bad out there” and it is “going to get worse”. I believe the majority of us saw this coming in 2006 —and turned a cheek. It is time to come full face…basically, I am tired of words.

I do not necessarily agree with one entity, such as a government saving or “bailing-out” individuals or corporations in a recession. I have no answers, I have no BIG miracle plan, but I do believe all things happen to us for a reason and I will not wait for an organization to fix this mess. I choose to act now.

True leadership starts at an ordinary level: with all of us as individuals knowing that no one is beneath us (while aiding others).

What ever happened to being just kind and thoughtful to one another? What happened to helping someone we do not know and wanting nothing in return? I have always been thoughtful and helped those I encounter every day. Mainly, because I have been at the very bottom before (actually, a few times — covered with mud bordering on clay) and I never want anyone to be there.

Many people help by contributing to a non-profit organization and feel that this is good enough for the year…which is fine. But, what about contributing to man on a daily or weekly basis throughout the year with thoughtful action?

I find great joy in buying a complete stranger a cup of coffee, tipping the cab driver double, offering that rushed individual my metro card so they can catch their train and when someone asks for directions not telling them where to go; but actually escorting them to their destination – what’s a few blocks?

Around Thanksgiving, I was in Cleveland for the longest I have ever been since I moved to NYC. I usually fly in and fly right back out.

However, this Thanksgiving I spent a little over a week in this city, I used to call home. As I drove (for the first time in years) down Interstate 71 and through the suburban neighborhoods, I became sad because of the lack of energy, the lack of “pride of ownership” that used to grace grand streets I used to travel — the city is bordering on a complete economic disaster…even though I am not a wealthy individual (not even close to it!), I wondered what I could do to help. In turn, I found myself being especially kind to everyone I encountered. When I went out with my sisters and bought a round a drinks for their friends for $33.00 (that was for only 8 drinks!), I tipped the bartender $10.00. Everyone around just stopped talking and looked at me. My 24 year-old sister said “Heather, why are you throwing your money away like that? This is not New York!!” I replied, “I know, but, eight drinks in NYC would cost me at least $100 and I appreciate that tonight I can make you, your friends and the bartender happy. Not too mention that we all should try to make a difference right now -even if it is a small one. It is time to pay it forward.”

Once back in NYC, I noticed that I was buying a lot of coffee for others, tipping more and smiling more…

The other night as I was finishing the final pages of “Blue Blood & Mutiny: The Fight for the Soul of Morgan Stanley”, I decided to order take out. Once my delivery man arrived he told me my total was $11.00. I gave him a $20 and asked for $3 back. He was so flustered that he gave me $6 back and I said “No, here” and gave him the additional $3. His face was so mystified and said, “I am used to getting $1″…and as he thanked me, I thought “what is going on here…what have we become? We are in a recession and people are using it as an excuse?” I just do not get it.

If I cannot take care of the tip for a server/cab driver, etc — I just walk or do not go out.

I could never eat food and not take care of the individual that brought it to me. I make the sacrifices in other parts of my life so that I can take care of others — in “small” ways.

These are not examples of me being a “big tipper”; but trying to do my part…

You know, we cannot blame our problems on so called “greedy” bankers on Wall Street when we all are “greedy” on some level…

Yes, I know my reasoning is slightly idealistic; but, so what?

I am a firm believer that small acts of kindness can change a world, enhance creativity and stimulate the good in all of us — even those perceived as bad…

Hoping that others can cast their spell of kindness on this period of blight so it is more endurable for all…

May 2009 bless us all with thought, humility, health, kindness and strength to do the right thing!

Closed Condos in TriBeCa

In an effort of being even more of an advocate for my clients, I drafted a report of the closed sales in TriBeCa from Oct 1-Nov 18, 2008. The majority of the units traded under $1400 per SF.

 

Click on the link below for report and supporting data.

 

TRIBECA REPORT

 

 

 

 

 

 

______________________________

NYC Market Repartee

The below is part of an email response from a friend regarding my previous post:

“Who’s to say what’s realistic in this economy?  Actual

sales in the next few months is the answer.  However, it is a whole new

ballgame, and cash is king.

The problem with appraisals of residential real estate properties is

they it look backward when determining value.  For example, all of the

appraisals at ***** (a certain mid-town development)are coming in on target because they are just

looking at the deals which have closed within the last two months–the

prices for those deals were set months ago.  If they had the ability to

look into the future, it is my firm belief that they would be much

lower.”

My partial response today to my friend:

When a seller drops a price that is under what he paid for the unit – this is realistic & aggressive pricing.  Yes, the buyer determines value for a subject property; but, only if the two parties have a meeting of the minds and a transfer of title/shares result.

Determining value right now:

According to the Appraisal Institute, one must always use 3 comparables that have closed within the last 6 months when determining value on a report. I have been using 3 months. We will have an issue 2^nd/3^rd quarter 2009 and even more so in 2010.  This being said, the market cannot stop and we (brokers/buyers/sellers) need to push forward. There are plenty of “deals & steals” in Manhattan right now — but in general the majority of “newly listed” properties do not validate offers below 25% or more of the asking price.

Please know that this is not a self-serving philosophy.  Even though I am in a capitalist profession fueled by commission -it is not about the money.  It is about doing what is right for my clients while setting in motion a continual stream of fiscal measurement for the future.  I have stated many times: Real estate is not a short-term investment. Yes, a few of us have been lucky with quick appreciation in Manhattan and other parts of the world; but, this method is not a durable approach to build one’s portfolio of assets–it should be a small part of the equation. 

The current blight of desperation in Manhattan real estate is part economy and the other part is being stirred by the masses of buyers that are being influenced by the stories of distressed real estate in the United States. Unlike metro-areas that have the ability to build out into suburbia which significantly devalues real estate in a down economy: Manhattan is an island and there always has been a lack of land. I can write and advise with extreme conviction that Manhattan will rebound quicker than any other area and investing now is going to prove to be a very high return in five years. Additionally, looking forward to 2013, I believe Manhattan is going to experience a housing shortage and prices are going to soar within both the rental and sales arena (the current halt of new development projects is partially fueling this prediction).

CHANGE:Brokerage/Buyers/Practical Pricing

I have joined a new firm. After entertaining many companies, I without hesitation selected Halstead Property, LLC. It is not the largest brokerage in Manhattan, yet, they are the best positioned for my clients (and my personal long-term goals) during this economic position of unbalance we find ourselves enveloped. Additionally, they are a company that is currently debt free while being progressive in execution and their values strike a chord beautifully with mine.

As I witnessed my first office meeting with Halstead this past week, many agents were discussing how many of their buyers were offering such low offers on properties. I must admit, I do see this as a trend. Personally, my buyers are offering around 25% under ask with no reasoning. I am not quite sure where this methodology is coming from…it appears not to be in one price point–but all over the board: from $280,000.00 to $3M units.

 

For the reason that I am a huge data driven individual when it comes to real estate trades, I do not see the validation of 25% reduction of ask at this time. These buyers are REAL; but, their “want” has not turned into a “need”. It is almost as if they are throwing paint all over the city with these low offers hoping to find a real masterpiece of a unit without having a true passion for a specific property.

On the inventory side, I have seen more realistic pricing. Not everything but, I feel we are about two-thirds of the way there with the majority of the newly listed units. I do have a method to pricing regardless of the market: I ALWAYS pitch to price a unit 5% above what the unit will actually trade for. The trade is based on a minimum of what has correspondingly closed within the last 3 months blended with similar active units – with more weight on the closed units.

Why is this my method? Partly, because I cannot seem to lose the foundation I gained years ago as a national real estate analyst and residential property appraiser. Secondly, because I hate to play the game of what brokers call “buying a listing” with an outrageously inflated list price. Thirdly, I know this is the only way to sell a property –in any market. Most importantly, it is best for the seller, adds to my creditability as a professional and integrity as an individual.

I do believe, I am going to see my buyers’ “wants” turn into a real “need” in mid-February 2009. We all need to keep in mind that real estate is a commodity and even though the price per square foot may take more of a dip throughout 2009 – the real return on the investment will be appreciated by all within the next five years…

 

 

3QFY08 Sales Released

The reports have been released for 3QFY08. The numbers are down. As you know, I do not necessarily focus on PSF when a market is in a transition — I focus the number of closed transactions. The closed transactions will foretell where we stand in 2009 and even 2010…it is not looking buoyant.

Summary of the Miller Samuel Report and the REBNY Report(condos/co-ops):

Average sale price in Manhattan: $1,480,363

Down 11.3% from prior quarter

Up 8.1% over prior year

Average price per square foot: $1,193

Down 5.5% from prior quarter

Up 4.3% over prior year

Number of sales: 2,654

 

Down 13.9% from prior quarter

Down 24.1% from prior year

 

In closing: “A refusal to believe that the future is knowable guarantees the increase of risk.”

Time will tell whom in this business will survive.

I am looking forward to the challenge of being a part of this real estate shift and guiding my clients onward…

 

A Detour: TRUMP & ELIZABETH I

 

 

I sat at my laptop this evening with the intention of writing about the how the current economy and housing market influence corporate relocation this 2008.

However, my mind took a detour to the root of our pecuniary difficulties: MAN (and leadership).

This afternoon, I was with a client that relocated to New York via London with his firm. After, we looked at eight buildings during the London-like weather, I needed to stop for a quick pick me up at Starbucks. As I entered Starbucks, I noticed a building that was not on my itinerary – actually, I have never even been in the building before. So, I asked my client if he wanted to pop inside – he did. I must say the building was glorious; but, the unit was above his initial price-point and of course, he LOVED it. Post our viewing we stood in the misty light rain near City Hall to discuss all of the apartments we viewed and he was stuck on the last unit. As I drank the last bit of coffee, I voiced my sincere concern that if he chose the last unit he would not truly enjoy his New York experience because he would be taking funds from his daily “social” budget to enhance his monthly housing budget. This being said, he told me he “should” be ok…we got on the “R” train bound for uptown.

As I got off the train at 14th street, I thought about him; the “glorious” apartment and then had a quick flash to a conversation I had a month ago with a loan officer over a few Coronas.

The loan officer told me I was a bit “green” when it came to my clients and I offer too many favors. He told me that I go out of my way with them and should not worry about certain things like personal affordability, etc. Additionally, he was shocked that I have helped some individuals without a fee. Maybe, he was shocked because I am a single mother raising two children alone while working in the most expensive city in the US and could not comprehend my reasoning…He told me I was never going to be Trump. I responded by saying: “Actually, I am more impressed with the leadership and successes of Elizabeth I, Winston Churchill and Sydney Weinberg .” He was puzzled by why I did not strive to be like Trump and shook his head and said, “naive“…

Regardless of his reactions, I did not like the way he was advising me on how to perform my business or for that matter, how to make money. I explained to this loan officer that I am in this business for long-term relationships -not the quick return. So what, if I help someone and do not make a couple thousand dollars – I do the right thing and people trust me. Most importantly, I go home to my children at night with a smile that symbolizes that I am proud of my day with the comfort of knowing that I made a “small” difference in someone’s life.

As my mind was balancing these two events while briskly walking down 14th, I glanced over at a news stand. Headlines of Lehman’s fall; Hank Paulson wants your money; McCain has no plan to save us; America has poor leadership and so much more washed the front of the stand.

Quite honestly, I am tired and disappointed in it all. So many have self-indulged in their authority of leadership while not making the smallest investment of thought to the forthcoming outcome. I am tired of real estate professionals blaming bankers because their clients cannot get financing. Yet, the real estate agents are the same individuals that put their clients in over-priced homes with “creative” financing—Spinning this viscous circle everyone of us is enclosed by. As a public, we all aided in this state of economic chaos; as individuals we need to stop acting helpless.

Leadership is not just reserved for those that are in high levels within a business organization or in politics. Leadership starts at the bottom. As a real estate broker with no actual authority within an organization, I am at the bottom.

I choose to not make a quick profit for the sacrifice of another, I choose to stay true to my principles, I choose to take responsibility…

In closing, each summer, I work with many recent college graduates that are going into the finance industry. I always walk by Delmonicos with them and mention that it is the setting for the “power lunch” scene in the movie Wall Street. Believe it or not, they all say “great movie!” I love to ask them: “Are you more like Gordon Gekko or Bud Fox?” The few that respond: “Bud Fox” always put a smile on my face…

 

 

 

 

 

 

 

 

 

 

 

 

 

GREATNESS IS NOT RESERVED FOR THE GREAT. THE GREAT ARE SIMPLY THOSE WHO HAVE RISEN TO MEET THEIR DESTINY…Michael Berg

THIS BROKER WAS AMISS…

Today I was managing two open houses within the same building. Both units are exactly the same size; but, one is beautifully renovated and the other, well, needs a bit of a “lift”. For some reason, I have not been completely pouring my heart into the one that needs the boost of rejuvenation. ..and it shows. The owner and I had a bit of a rocky start regarding pricing and the original appearance of the unit. This being said, he has done his best to make the unit appealing.

Post my open house, I called the owner to provide the traffic count and feedback. He had a few items that he wanted to discuss with me too: he was not happy with the property description; the lack of photos of the unit and the advertisement on NYTIMES.com. So, we met at Starbucks to discuss further…I had no defensive statement to explain (his apparent lack of disappointment in) my performance. I simply and honestly replied: “You are right…”

He was right!

All evening I have been thinking about his apartment and him. I am embarrassed that I needed to be confronted; I was humbled because it took a recent college graduate to make me think about my business; and most importantly that he may feel that I do not value him as a person or client.

As brokers, we all want the beautiful little “gems” and the huge “crowns” as exclusive listings. However, a “gem” does not need to be truly brilliant for one to want it or maybe desire it. His unit is HIS gem; it is the first home he purchased for himself in NYC and he is proud of it.

I am preparing to write a magnificent property description full of passion and creativity while being honest. Additionally, I will have proper photos taken that show his little “gem”.

My lesson: Ego crept it’s way into my business and this is not something I am proud of – nor something I will have occur again.

Thank you YW for bringing me back to the “light”…

 

BON JOVI in Central Park Framed with Great Buildings

 

Not being a native New Yorker, not a day goes by that I do not appreciate everything that this city offers and everyone that touches my life here.  Whether it is seeing Carmen at the Met, to having great conversation with a stranger while waiting for a cup of coffee at Starbuck’s, or helping a foreigner find their way in this city — I appreciate each minute here with enthusiasm.

 

I found myself on the great lawn of Central Park this evening (that has past) witnessing the Bon Jovi feast of energy with music.

 

On that great green, I stood with my dearest colleague (and true friend),

Gene Simonetti while the band played

“It’s My Life”

and thought…

 

Thoughts about how everything comes full circle: about all of the buildings that surrounded our evening – particularly Time Warner;  the book I was reading that morning about Brooke Astor and her contributions through The Astor Foundation to rehabilitate Central Park in the 1970’s (the decade I was born);  and so much more…

 

Recently, I was asked to provide comps for condo units near Central Park (at a certain price point). As I scrubbed the data provided by the New York Department of Finance I was amazed with the numbers a few weeks ago (particularly the SF prices)…

 

Building	SF	Sales Price	PSF	Transfer
80 COLUMBUS CIRCLE, PH76B	4,825	$27,000,000.00	$5,595.85	2/15/2007
80 COLUMBUS CIRCLE, NT70B	2,912	$13,000,000.00	$4,464.29	5/29/2007
80 COLUMBUS CIRCLE, NT71AB	2,413	$17,500,000.00	$7,252.38	2/28/2007
80 COLUMBUS CIRCLE, PH76A	6,511	$19,533,000.00	$3,000.00	5/14/2007
80 COLUMBUS CIRCLE, PH76B	4,825	$27,000,000.00	$5,595.85	2/15/2007
80 COLUMBUS CIRCLE, NT67E	1,490	$4,600,000.00	$3,87.25	4/29/2008
80 COLUMBUS CIRCLE, NT74A	2,413	$11,000,000.00	$4,558.64	5/14/2008
80 COLUMBUS CIRCLE, PH76A	6,511	$19,533,000.00	$3,000.00	5/14/2007
25 COLUMBUS CIRCLE, S75CE	4,454	$24,480,000.00	$5,496.18	1/28/2008
25 COLUMBUS CIRCLE, ST72A	3,920	$18,500,000.00	$4,719.39	3/31/2008
25 COLUMBUS CIRCLE, ST65C	2,942	$15,850,000.00	$5,387.49	1/28/2008
25 COLUMBUS CIRCLE, ST69B	2,317	$12,250,000.00	$5,287.00	2/7/2008
25 COLUMBUS CIRCLE, ST72A	3,920	$18,500,000.00	$4,719.38	3/31/2008
15 CENTRAL PARK WEST, 1617D	6,131	$29,529,250.00	$4,816.38	8/8/2007
15 CENTRAL PARK WEST, 1819A	5,870	$30,547,500.00	$5,204.00	4/9/2008
15 CENTRAL PARK WEST, 1819B	5,602	$23,928,875.00	$4,271.48	3/26/2008
15 CENTRAL PARK WEST, 1819C	6,307	$25,838,093.00	$4,096.73	2/4/2008
15 CENTRAL PARK WEST, PH20	6,744	$43,687,751.00	$6,478.01	8/31/2007
15 CENTRAL PARK WEST,  PH39	NA	$45,821,250.00	NA	2/6/2008
THE PLAZA RESIDENCES, 1109	11,861	$45,924,048.00	$3,871.85	4/7/2008
THE PLAZA RESIDENCES, 509	4,284	$25,493,379.00	$5,950.84	11/5/2007
THE PLAZA RESIDENCES, 709	13,063	$51,539,180.00	$3,945.43	6/15/2007

 

 

After Saturday evening, I must say, there is no more “amazement” with the prices – this city is about lifestyle and opportunity —-which is truly priceless.

There is a reason that people pay a premium to live here – for the moments!

 

Thank you to Bank of America for sponsoring this event and more importantly to Carola Mack for being so generous when thinking of others — your gift of this night meant the world to me.

Walking and Talking Real Estate on Wall Street

This evening in an effort to stop thinking about work, I poured a glass of red wine and started listening to Angelique Kidjo’s version of “Summertime”…so much for the idea, of unwinding from my day of real estate. Because, I started to think about this time of summer and what has been happening in my “small” world of being a broker this past week…

 

One thing that my clients and dearest friends know about me is that I always do the right thing – even if it means not making money from a deal.

An ex-boyfriend (who is also a broker) used to say I was too cavalier and should be more concerned with the actual outcome of money –regardless of how I made it. He said, I was never going to change the way things were done “here” and NYC has a different set of rules.  Well, guess what? There is a reason why he is now a “past-tense” person in my life and the RULES, I choose to live by in Manhattan real estate are not those that are actually practiced; but the LAWS set forth by the state of New York enhanced by my personal values.

 

This hot summer Friday morning that has gone-by (like I blur); I was walking down Wall Street with 2 clients after a (partial) lease signing.  As I was silently appreciating the amazing view of Trinity Church as we walked by NYSE, the one client asked (quite creatively) if I would consider taking less of a fee (than we agreed to) for the apartment because they could give the funds directly to me instead of my company.  I looked with amazement, smiled and said “No, that would be against the law.”  He responded: “Well, you would make more money; we would save money; and other brokers do this.”   I responded: “I am not like other brokers.”   I also added: “Please read the book I suggested before you start your career with the Firm.* Once you read it you will understand why I will not abide to your request.”

 

*Principles from the book (that I observe):

1

Our clients’ interests always come first. Our experience shows that if we serve our clients well, our own success will follow.

2

Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore. We are dedicated to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us. Our continued success depends upon unswerving adherence to this standard.

14

Integrity and honesty are at the heart of our business. We expect our people to maintain high ethical standards in everything they do, both in their work for the firm and in their personal lives.

 

Now, I am only slightly disappointed with my client because he is young and quite honestly, it is not his fault. I blame brokers in this city for advertising and accepting such terms.

Yes, it is so easy to have deals (not just rentals), but, BIG deals and accept money “off the books.”  I choose not to abide – regardless of the fiscal return.

 

Many people do not realize that I actually write my values and goals daily. One of my goals (#9): “To change real estate in NYC.” 

Even though this is a HUGE goal, I am prepared to have many, many more walks (and “talks”) down Wall Street for many more years…