NYC is THE hub for wealthy renters (meaning renters who make $150K and above), according to a study published recently by RENTCafé. According to U.S. Census data, together, the five boroughs have more top-earning renter households than San Francisco, Los Angeles, Chicago, Houston, San Jose, and San Diego combined. Out of the total 212K renters, more than half (120K) chose Manhattan as their residence, while Brooklyn appears to be the second choice, with 52,000 high-income renter households.
In Manhattan, the cohort of wealthy renters increased by 86%, while wealthy homeowners by a mere 18%, over the last decade; and all this despite a staggering average market rate rent of $4,146/month. Which means that, at this point, the number of top-earning renters (120K) exceeds by far the number of top-earning homeowners (85K), and the gap only seems to be getting bigger.
Both Brooklyn and Queens saw an incredible rise in affluent renters in the last ten years. With over 52,000 high-income renter households, Brooklyn has more renters-by-choice than the entire city of Los Angeles. Affluent renters moving to this borough in such great numbers have caused a massive gentrification of the neighborhoods. To get a better idea about what massive means here, take into consideration that the number of renters from this segment has increased by 324% from 2005.
Queens saw the second highest influx of rich renters in the last decade. The number of affluent renters-by-choice in Queens has soared 247%, from 8,500 in 2005 to 29,500 in 2015. Although in this borough there are more than twice as many wealthy homeowners than wealthy renters, the biggest spike was registered in the number of affluent renters, which has soared 247% from 2005 (the number of homeowners increased only by 111%).
The Bronx has relatively few high-income renter households — about 8,900 — but, even here, they grew by 166% in the last decade. Staten Island recorded the same rate of growth in high-income renters in 10 years, but the total number of renter households with incomes over $150,000 here is only 1,400.
While it is true that NYC constantly tops the lists for the most expensive rents in the U.S., it is equally true that many of the people living here can definitely afford to do so. Almost 10% of all the NYC renters earn $150K and over. Manhattan has the largest share of affluent renters of all 5 boroughs — approximately 21%, followed by Brooklyn with about 8% of its renters.
As the current real estate market continues to shift, sifting through information and the opinions of real estate professionals becomes increasingly more relevant. A recent communication with a buyer’s agent reminded me of just how much influence an agent’s opinion can have on whether or not a transaction takes place, despite whether or not said agent has the experience or knowledge worthy of such influence. This conversation brought me back to a True Gotham post from September 2010 in which I discussed opinions and how my opinion and a $1 will buy you a cup of coffee:
If there is one thing I know for sure after all of the barbecues, cocktail parties, and various summer get-togethers, it’s that everyone has an opinion about the real estate market (I repeat, there is not ONE national real estate market). So what do all of these (mine included) anecdotal opinions mean? They simply prove that the perception of what is currently happening in anyone’s specific hyper-local real estate market is greatly influenced by the media, in the trenches personal experiences and general real estate industry chatter.
Let’s break down the legitimacy of all three:
1. The Media: I LOVE the media! I think it is incredibly powerful and in the hands of responsible reporters can serve the consumer very well. But often times reporters of “man bites dog” scenarios are much more effective at negatively skewing perceptions about housing and the economy. In my almost 20 years of selling Manhattan real estate, never has the media been so powerful in swaying public perception about housing on a daily basis. The number of emails and phone calls is directly proportional to positive or negative news stories about housing, the stock market, mortgage rates or the global economy. That said, some excellent reporters are out there doing their very best to stay ahead of the curve and report current trends which leads to a more informed consumer. Even bloggers like Noah Rosenblatt at UrbanDigs are among those leading the way towards transparency and accurate reporting of current market conditions.
2. From the Trenches: Anecdotal at best, this information is only as dependable as the person sharing it. For instance, a savvy and knowledgeable real estate professional, appraiser and market expert like Jonathan Miller provides useful data and anecdotes that give incredible insight into current market conditions as well as forecasts for what’s to come. A sophisticated broker or real estate agent with real time experience in a specific market can also provide useful information. But a broker or agent who is in “desperation” mode trying to keep their business afloat is not typically a good source for market conditions.
3. Industry Chatter: This in my opinion is often the least reliable as egos almost always get in the way of reality. No broker/agent wants to discuss when their business is suffering and my experience has almost always been that when I share with someone that volume has slowed, they get most uncomfortable and either change the subject or throw me some open ended statement about how busy they have been.
It still holds true that making sense of your specific real estate situation comes down to analyzing data, buyer or seller motivation, and the guidance of an experienced and knowledgeable real estate agent.
Click here to read the full True Gotham post from 2010: A Broker’s Opinion Is Just An Opinion
I have been struggling all day to come up with something meaningful about which to write. Maybe the writer’s block comes from the anxiety that stills exists ahead of tomorrow’s historic election? Or maybe it is because all I want to do is gloat about my 12-year-old daughter and her soccer team winning the New Jersey State Cup Championship this weekend? Whatever the reason, I have once again come full circle to the concept that everything is a matter of perspective. The residential real estate market has indeed shifted its course with the ultra-high-end market quieter than a single geriatric cricket. That said, the overall market in general continues to churn but at a pace that feels eerily slower than the recent 18 months. Again, I think of the analogy of driving 80 mph on the highway and being forced to slow to 55 mph after spotting a trooper off in the bushes. It feels like you are crawling after moving along so quickly. The same holds true of our current real estate market. Despite a healthy market where neither buyers nor sellers are holding all of the cards, it just feels odd. I suspect that tomorrow will bring some answers that will hopefully make everyone a bit more comfortable with the direction of our real estate markets and our country.
On another more personal note, I was driving home with my wife yesterday after my daughter and her elite soccer team won the New Jersey State Cup Championship. Everything was indeed well in the world and it continues to be. I even said so commenting to my wife that for the first time in months, I wasn’t thinking about the election insanity, the shifting real estate market nor any of the variety of trivial inconveniences that may occur on any given day. I was proud. I am proud. The girls on both teams displayed desire, commitment and cohesive focus that reminded me of the innate goodness in the human spirit! It took 12-year-old girls to remind me that at home, in the office and wherever I may go, it is key that we continue to focus on the good and be a more positive force in our incredible world.
Those who know me know all too well that I have been a very active and engaged participant on social media almost since Facebook’s inception. So, it was shocking to some to discover that I abandoned Facebook back in September because I found much of the content that I was reading to be more of an irritant than a joy. Yes, I’m referring to the polarizing forces in our current political environment. I am definitely a sufferer of election anxiety and many of my friends and family share my pain. “So what?”, you say? This current dilemma has me asking myself, my family, friends and agents: How exactly do we continue to behave in a professional manner and do our jobs while maintaining and holding true to our personal convictions? Is it possible to maintain a level of professionalism and support a business or person who is so diabolically opposed to your fundamental beliefs?
I have worked with countless people over the last quarter of a century. Most of the people I have helped have been interesting, intelligent, sophisticated and pleasant. Some, not so much. But I never chose not to work with someone based on their personal views or beliefs. In fact, some years back, I was the real estate agent for a very prominent campaign manager who is currently front and center in the news. We definitely did not see eye-to-eye but in the many months in which I worked with this person, we shared a mutual respect and sometimes heated yet comical banter over significant political issues. Our inability to see ey
e-to-eye did not cause either of us to waiver from our convictions. Unfortunately, despite having a contract in hand for a gorgeous Manhattan home, a mansion in the suburbs trumped city living (see what I did there?). That said, there is a very fine line that determines the ability to tolerate the person whose views are so diametrically opposed to your own. For some, it is simply business and anything goes in the name of making a buck. For others, differing opinions on topics like abortion, immigration, and women’s and minority’s rights, make the prospect of working with someone absolutely unpalatable.
The one thing I think we can all agree upon is that, while difficult at times, rising above is the only way forward.
Last week, I had the privilege of sitting on a panel at the NYC Real Estate Expo with some of my esteemed colleagues from other firms. The topic of discussion was how to be a world class connector. Buzz words like authenticity, transparency, trust, high energy, clarity, sincerity and purpose were discussed as all of us shared anecdotes regarding the meaningful relationships we have forged in both our personal and business lives. Here are four important takeaways that I so graciously received from my fellow panelists:
- Be the “connector.” – Chris Schembra, the Founder and Curator of the 747 Club, the only non-real estate agent on the panel is doing just that as his dinner club brings together complete strangers to participate in evenings of “authenticity, empathy, vulnerability and safety.” In short, consider hosting events to bring the “right” people together to make meaningful connections with each other and you will surely be remembered as the catalyst for those relationships.
- Social media is but a tool – Facebook, Instagram, Snapchat, LinkedIn nor any other of the online platforms that allow you to “connect” with others are NOT a substitute for genuine person to person connections. Face time, and I’m not talking a video screen on your phone, builds meaningful relationships.
- Listen – Let me repeat that in case you missed it. LISTEN. It is no secret that most people like to talk about themselves, so ask questions and then just hear what they have to say. And oh yes! Don’t forget their name!
- Be yourself – Sounds obvious right? Don’t make yourself out to be someone you’re not. Be authentic. Be genuine. Be enough. But if you are going to seek out real connections you must also be interested in them!
The below quote, shared by Chris from the 747 Club, sums up the afternoon beautifully:
“Don’t worry about knowing people; just make yourself worth knowing.”
Be the person that other people would want to know, remember, recognize and appreciate. That will most definitely help you to forge meaningful connections and relationships.
This morning I was live on Good Morning New York, Real Estate talk show with CORE agent and co-host Vince Rocco. Vince and I discussed Hudson Yards, the largest private real estate development in United States history. In the interview, I described the ways in which Hudson Yards will not only completely change the face of the west side of Manhattan, but will also influence the entire city. Take a listen and find out what is in store for NYC!
Click here to listen to the full interview: Learning about Hudson Yards in Manhattan
I have been writing for my True Gotham blog since April 2006. The very first broker blogger in New York City, I have spent the past 10+ years making every effort to be of service to the consumer and the industry in hopes of raising the bar for everyone. This blog post from May 13, 2008: Marketing Your Home in a Softening Market is a perfect
example of the cyclical real estate market and how we must shift strategies as market conditions change:
Other than the media coverage of both the ultra-luxury slowdown and the hyperactivity in the sub $2M market, there is no solid indication yet from actual numbers as to which direction the Manhattan real estate market is heading. That said, top producing real estate agents seem to be quite busy as marketing and selling a home in today’s market requires experience that transcends simply picking any price, sending out some postcards and waiting for multiple bids.
Those who regularly read True Gotham know my feelings about accurate pricing no matter how the market is behaving, but when buyers have more inventory to choose from, accurate pricing becomes even more of a priority.
In addition to proper pricing, here are some important factors to consider when selling in today’s real estate market:
- Hire a “genuine” real estate professional with experience and knowledge: By genuine I don’t mean properly licensed (that’s obvious). I am talking about someone who doesn’t over promise and who can be trusted. Don’t hire a “buy now, real estate prices always go up” kind of agent. Remember that the prospective purchaser is forming an opinion of your property through the representation by your agent. Don’t let an agent make a bad first impression. It’s an uphill battle if a buyer doesn’t believe what your agent is “selling.”
- Seek both quality and quantity through transparency: Make sure that you are pleased with how your property is being represented to both the public and the brokerage community. It should be displayed as beautifully as possible without misleading a buyer. This will insure that buyers who take the time to visit your home will be pleased and not negatively surprised (e.g., don’t be afraid to highlight how quiet the place is despite the lack view…a prospective purchaser who expects a view and discovers none is NOT going to buy your home).
- Change your marketing strategy: What works during a housing boom doesn’t always work in a more “normal” or declining market. Don’t be afraid to suggest “out of the box” marketing ideas to your agent. Discuss the marketing strategy regularly and determine whether changes need to be implemented. We at CORE believe we are a marketing company that specializes in real estate. That translates to creativity and success for our customers.
- Know your competition: Make sure your agent is informed of comparable properties that are currently on the market and that she/he can support the reasons for your price.
- Prepare your home for the market: It doesn’t hurt to visit comparable properties at open houses to see how your property is perceived in the marketplace. Touch up paint and declutter at minimum. At CORE, we offer our agents staging services via our CORE Styling program which insures that your property is presented in the optimal light when coming to market.
- Be patient: Over the past decade, properties have sold moments after hitting the market despite inexperienced agents and/or ridiculous pricing. The buying frenzy, although still occurring in some segments of the market, is less common and patience is a necessity in today’s marketplace. Choosing the right agent who stands by you throughout the entire process is critical.
- Don’t be stubborn (too patient): Trust that your real estate professional has a firm grasp of market conditions and listens carefully when they suggest marketing changes or price adjustments. Don’t get caught chasing the market down by resisting the lowering of your price. The best strategy to ensure an efficient sale is to adjust your price ahead of the competition.
Those are just some things to consider if you’re a seller in today’s real estate market. All of this said, there is no more important factor than trusting the real estate professional that you hire. If you don’t have faith that they know what they are doing, you may just get bitten in the asking price.
It is remarkable to me how on point this advice from 8 years ago is in our current real estate market. Isn’t it interesting how the more things change, the more they stay the same?
One of the most enjoyable and stimulating parts of my job as CORE’s Sales Director is the business development meeting. Several times per year our marketing, PR and management teams sit down with our agents individually to discuss current business and the ways in which we can creatively expand their productivity. We also are always cognizant of maintaining a focus on work-life balance. I’m continuously amazed by the level of professionalism exhibited by our agents and one such meeting was the impetus for this blog post.
With nearly 25 years in the Manhattan real estate industry, I have seen a plethora of ways in which agents structure their businesses. The TEAM is nothing new to the industry. Once upon a time and still all too frequently, a team is a gentle way of letting the consumer know that the person that they hired will often be hands-off throughout the transaction. In some instances however, the TEAM structure has evolved to provide a level of service to the consumer for which I had once only hoped to see. Enter Heather McDonough and Henry Hershkowitz, fondly and professionally referred to as the H & H Team at CORE. They have built one of the most premier real estate teams that I have seen anywhere and at anytime in the past 25 years in Manhattan and beyond. Here’s how they master the art of team management:
- Henry and Heather are total and complete business partners handling their own accounts/clients and supporting each other when needed. They also share marketing and team administrative duties.
- Account managers are assigned to specific listings and handle all things administrative with a strong focus on client services.
- A separate marketing and business development manager who develops, executes and manages marketing timelines and initiatives.
- Multiple sales agents who act as sub-agents to Heather and Henry and while serving their own pool of buyers and sellers, they too receive the support of the team and simultaneously carry out assigned team duties.
- A designated sales agent who is also a new development specialist at Zaha Hadid at 520 West 28th.
This is just a snapshot of their team structure. I can also tell you that when they arrive to their business development meetings, they have a very well thought out business plan to review and marketing strategies to bring to the table. It is professionalism like this that makes Heather and Henry an unparalleled asset to their customers and an absolute joy with which to work.
RIO DE JANEIRO, BRAZIL – AUGUST 09: Michael Phelps (L) of the United States leads Chad le Clos of South Africa in the Men’s 200m Butterfly Final on Day 4 of the Rio 2016 Olympic Games at the Olympic Aquatics Stadium on August 9, 2016 in Rio de Janeiro, Brazil. (Photo by Pascal Le Segretain/Getty Images)
Occasionally I have a novel idea that I share through my blogging. This is not one of those times. As part of our continued efforts to support our agents at CORE, our marketing, PR and management team meet with individual agents regularly to discuss business development and marketing strategies in a very bespoke fashion. Yesterday at one of these meetings, one of my sales managers (full disclosure that he is also my best friend), David Innocenzi made the analogy between distraction among real estate agents and the competition between Michael Phelps and Chad Le Clos. Needless to say, Michael Phelps has proven that his laser focused efforts both in preparation for and competing among a world class group of swimmers results in winning. Alternatively, Le Clos has spent a great deal of his time both in and out of the pool preoccupied with Phelps even gazing at him during the actual race. Didn’t work so well for him in the end.
I’m not suggesting for one moment that real estate agents should be given gold medals (maybe some should) nor that we all can’t continue to learn from one another, but it has been my experience that the real estate agent who maintains laser focus on their customers throughout a transaction, from the first meeting through the closing, is indeed worth their weight in gold! I’m sure Le Clos is learning always from his observations of Phelps. But when an agent or even a brokerage firm becomes so preoccupied with what another is doing, the distraction becomes a liability and everyone in the transaction pays the price.
Once upon a time not that very long ago, a real estate brokerage opened that offered its agents massages at their desks, use of a car service, fancy candy (yes, fancy candy) and even a program that promised to match an agent’s personal charitable donations up to a certain amount. Needless to say, the bells and whistles proved to do nothing for the success of the real estate agents and even less for the consumer who chose to work with these agents. No surprise, this structure also contributed in large part to said brokerage operating in the red since inception.
In recent months, it seems the tides have changed. Agents whom I meet from this particular firm and other firms who share a similar “smoke and mirror” style are seeking a drama free environment with business development and marketing support that will help them better serve their buyers and sellers and, in turn, increase productivity. As an agent’s productivity increases, so does the profitability of their brokerage which creates a positive cycle that contributes to innovation and growth for everyone. Additionally, wise agents seem to have discovered that with this increase in their business production, massages, car services and even fancy candy is constantly at their disposal.