In May, I wrote about something that didn’t make me proud: the expiration of my exclusive listing for an apartment I loved at 309 W 86th Street.
For the last nine months one of my exclusives has been my pet project. It is an absolutely amazing penthouse duplex property that is located in a building that my wife and I called home when we had our first child.
Maybe it’s my affinity for the building, at 309 West 86th Street. Maybe it’s the fact that my wife and I miss the incredible people there. Whatever it was, something tainted my reasoning when it came time for pricing.
Whatever the reason, when I priced the apartment last fall, I truly believed that I could sell it for $1.995M. By January, I knew I was wrong.
And when we dropped the price to $1.795M, I believed then that we could sell at this price or better. Two failed contracts later… I was proved wrong again.
Still, I remained confident (perhaps even a bit cocky after an eight year booming market) and proceeded with a marketing plan that exceeded any I had done in the past. Again, I was wrong.
Although I "had a hunch" that the market was changing, I proceeded with the marketing of this property for the past nine months (yes, the sellers were even gracious enough to give me an additional three months to sell their place) the same as I would have during the "boom."
I was wrong.
In that original post, I even linked to the broker with the new exclusive.
A client of mine attended the open house for that apartment yesterday. It’s now on the market for $1.495, and swears that the broker holding the open house told her it had been on the market for eight weeks. UNREAL!!!! Try 14 months! And the industry wonders why the public continues to distrust us? That said, I believe it is VERY attractively priced at $1.495M and should sell now. (I know, I know, who would believe me on this topic at this point?)
- Investors reportedly auctioning off residential property at a loss in Florida.
- Curbed with a bundle of interesting links. The W Union Square reportedly sold for $1 million per room, web traffic is said to be lower on real estate sites, and a poll says most people think it’s hard to buy your first home.
- Discount brokers will now get equal treatment from some multiple listing services.
- A PBS essayist on the housing "bubble": "…it is hard not to be happy about the cessation of this frenzy, certainly for anybody clinging to the old-fashioned notion of a neighborhood of small, friendly, affordable houses. Alas, in so many places — certainly here where I’ve lived for 35 years — that world is now permanently gone."
- Two years of free parking and a free TV at the Flowers building does little for Doug: Developers across the city are offering big incentives. For example, some are offering 5% or more reductions in price and/or payment of closing costs. Free parking that adds up to an estimated $7,200 value plus a $2,500 flat-screen TV doesn’t really do it for me and isn’t likely to do it for my buyers. If my buyer is dropping $1.5M on a condo they can afford their own TV and parking. Show me the money!
Jonathan Miller has fired some people up with his post about a possible "bounce back" in the market.
The consumers are being faced with high housing costs in either the rent or buy scenario. We are seeing some would-be renters return back to the purchase market in rising numbers…The Bounceback. Not a wave, however, but a noticeable increase.
Its going to be interesting next spring, with several factors in the purchase market’s favor: rents will likely be higher than they are now [Col], mortgage rates are projected to be at or below current levels [SeekingAlpha/WSJ] and, assuming housing prices remain relatively stable, those renters who moved en masse that signed leased last spring have to make the tough choice again. The rental market has the advantage of safety. That doesn’t make the decision any easier. Its difficult go through the bounceback.
There are a lot of very frustrated people out there who just can’t stomach the possibility that the market may make any kind of forward movement–particularly those who still don’t own. It’s a numbers game. Miller is absolutely right that as rental prices increase along with condominium supply, more people are likely to come back to the purchase market. This is such a bizarre city and with rental vacancy rates at historic lows, ownership or exodus are the only other alternatives for many.
The National Fair Housing Alliance is not pleased with some real estate agents in Brooklyn. Janny Scott reports:
The National Fair Housing Alliance, a consortium of 220 groups and individuals working against housing discrimination, charged yesterday that agents in the Brooklyn Heights office of the city’s largest residential real estate brokerage, the Corcoran Group, had engaged in discriminatory sales practices, including racial steering and withholding information from African-American clients.
“During our 16 years of existence, the National Fair Housing Alliance has never seen such a literal and blatant example of sales steering,” the group wrote in a report detailing its allegations. In that particular instance, the report said, an agent “produced a map of Brooklyn and drew a red outline of the areas in which the white home seeker should consider living.” The agent used arrows to indicate neighborhoods that were “changing.”
“This racial steering tactic is reminiscent of discriminatory conduct from the 1970’s, when real estate agents would go into white neighborhoods with the specific intention of triggering white flight by showing on a map where an African-American family had bought a house,” the alliance wrote. “This Corcoran Group agent applied a new trick — he used a map to tell whites instead where they should ‘flee to.’ ”
I want to first point out the obvious and that you can not judge an entire company, in this case The Corcoran Group, by one agent’s alleged utterly stupid behavior.
What an absolute moron if these charges turn out to be true! Real red-lining! Wow!
I suppose that a company with thousands of real estate agents potentially (nothing proven yet) has a “bad seed” among them.
I see this as an excellent opportunity to further discuss the hiring practices of the large firms. For the most part, the new agents that I see entering the industry with the larger firms like Corcoran, Prudential Douglas Elliman, and Brown Harris Stevens seem to be quite a cut above those who were entering the industry 15 years ago when I first began my career. They bring a greater level of professionalism, an understanding of integrity, and fresh ideas to a marketplace that desperately needs changing. That said, I have met some agents with all of these companies who really make me wonder how they convinced their respective firms to hire them.
In fact, I have a perfect example of one such individual. Not long ago, my wife and I were going to purchase a property from a seller who was an acquaintance of the family. We never actually bought the place but I did receive two terribly alarming phone calls not long after our interest had waned.
The first phone call from the seller went something like this:
-Hey Doug, it’s Bob (not his real name). Guess what? We sold the house finally.
-Yeah Bob! That’s great!
-Guess how I did it Doug?
-How Bob?
-Well, we had this interested buyer who had visited several times so I first told them that we had other strong interest… ha… meanwhile, no one else had even come to see the place… Good right Doug?
-Uh… tell me more Bob.
-Well, they made an offer! And get this… after they made the offer, I told them that we received another higher offer so they raised their offer! Ha! I couldn’t believe it! It felt so good! Then I kept playing the “real” buyer against this “fake” buyer until they bid $300,000 more than what we were asking!!! Am I good or what? I should be in your business!
My thought… what a scum bag! My response was that that’s not really how we do things. I would bet that Bob could have gone to these people and said that he wasn’t willing to sell for less than X and he likely would have gotten the same price. There is finesse and there is blatant lying. Now he is in my industry with a very skewed concept of how to do business. As far as I’m concerned, he’s tainting the already bad reputation of real estate brokers.
Now the second phone call about six months later:
-Hey Doug. Guess what? Just got a job on Long Island selling real estate with one of the big companies. Maybe you can send me referrals?
Don’t think so but good luck Bob.
This guy now works for one of the big three on Long Island. I wouldn’t want to do business with him, I can tell you that much.
Again, in an industry with such low barrier to entry, it’s impossible to weed out all the bad apples. One can only hope that they rot before they do too much damage… unfortunately that doesn’t seem to have been the case in Brooklyn.
Read it while it’s hot.
Doug is all excited about the Mini Cooper he picked up last week. Here are some photos from his weekend pumpkin-picking trip with his kids. You’ll see it all over Manhattan from now on. Doug, Ervin, and Jennifer will even be showing up to appointments in it. (Mini bonus: It’s easy to park, too!)
Doug says that the TrueGothamMini has been getting an unbelievable number of looks, honks, and waves.
When my clients are interested in the Hamptons, I refer them to Bridgehampton broker Cynthia Barrett. I’m very protective of my clients, and very particular about who I refer clients to. I do my homework first, and always follow up afterwards.
After hearing great things about Cynthia from my mother-in-law (who has bought and sold many times through the years) I hired her to sell my own home in Bridgehampton. The sale went smoothly and efficiently in a tough market. Cynthia was always available and forthright with information. And, for the record, no one I have talked to has ever had a bad thing to say to me about Cynthia. She’s a serious professional. She has won referrals from me for life.
Yes, she has all the real estate credentials (Chairman’s Circle award member for four years running, Fine Homes Specialist rating, rated among the top brokers in the East End and Prudential Douglas Elliman nationwide) to go with deep knowledge of the marketplace. She and her family have lived in Sagaponack as full time residents since 1999 after living in New York City for nearly two decades. She is an active member of the Sag Harbor School District and the community. She also has more degrees than your average broker–and they’re relevant. She has a BS in advertising and marketing, and an MBA in international marketing and finance.
I’m thrilled that Cynthia has agreed to become the eyes and ears of TrueGotham in the Hamptons. This is the first of what we anticipate will be many Hamptons reports from Cynthia in the future:
Motivated Sellers Getting Results, Others Wait
In the Hamptons, inventory and time on the market both increased in the first three quarters of 2006. Of the high-end ($13-15 million) ocean front properties, those with motivated sellers and recent $1 million or more price reductions have found buyers at the ready. I have seen several such properties in Bridgehampton and Easthampton in the last few weeks.
Other sellers appear to be prepared to wait it out. The fact is, most sellers here in the Hamptons do not HAVE to sell their home; they can use it again next year or rent it again next year and they may not carry a large mortgage. Not selling becomes at best a minor inconvenience for them and–absent a divorce, sickness, or some other calamity, most have the resources and mindset to wait out the storm.
A Good Time to Buy in the Hamptons?
I’m finding that my clients are split down the middle 50/50 as to whether it’s better to buy now or rent one more year in the hopes prices will be more attractive. Let’s be honest, no one really knows what will happen in a year, and all that real estate bubble talk isn’t coming from nowhere–there is more inventory coming on the market, and average time on market has been increasing. However, the "buy now" argument is not without rationale. For one thing, the market is flat for the moment, while interest rates are still historically low. The uncertainty that always comes with elections will be going away in another few weeks. One of the biggest drivers of home sales in the Hamptons, those Wall Street bonuses, are expected to set new records again at the end of the year. If that happens, it’s hard to believe there won’t be plenty of people house shopping in the Hamptons in the new year.
Hamptons Kids Corner
If you happen to be visiting the Hamptons over this Columbus Day Weekend with your kids, pop into Hank Krzyzewski’s Farm on Montauk Highway just after the "T" in Southampton, across the street from Duck Walk Vineyards. Pick your pumpkins and go through the corn maze. My kids love it.
Farther east in Water Mill, you can visit The Halsey U-Pick Apple and Pumpkin Farm on Mecox Road and just across the street, partake in The Ludlow Farm Corn Maze complete with clue cards and multiple courses with-in the elaborate corn trails. Hours are 10:00am – 5:00pm Friday through Monday, October 6-9.
Did you know there are 1.2 million real estate agents in this country? That’s what it says here.
The number of agents is going to fall and fall hard in my opinion as the market continues to cool and agents actually have to “sell” property. Anyone with less than eight years of experience has only experienced a booming market where property almost always sold itself. Marketing, pricing, and negotiating have not been without challenges, but relative to the market 14-15 years ago, it has been a piece of cake.
I have newer agents constantly asking me for clients and some are even going back to previous careers considering new ones. I have also heard rumors of agents leaving offices in droves. I can’t tell you how many times in this recent market I have heard people at the closing table suggest that they should be in the real estate business. Most are clueless to the amount of expertise it takes to really bring value to a buyer or seller. Try convincing someone to pay 6% when you have no track record. No easy task.
They are expected to fetch between $4.3 and more than $5 billion (that’s billion) for the largest available parcel of urban real estate in the country.
How much do you think the city could sell Central Park for? Just joking… I hope that NEVER happens but I would “zestimate” it to be worth about $1 quadrillion.
