Current Real Estate Market Requires More Patience

If you’re one of the few sellers out there who has such a uniquely special (is that redundant?) property to bring to market, then this post isn’t for you because "special" properties that are priced right continue to be snapped up as quickly as they hit the market.  But for the rest of you, patience is perhaps the most important quality that you must exhibit in today’s bizarre Manhattan real estate marketplace.  There are several factors that have changed the pace of transactions today:

• Mortgage Market has Thinned Buying Pool-Many who believe that they are perfectly well qualified for a mortgage are in for a rude awakening.  Tightened lending standards are effecting many who would have easily afforded a home this time last year.  We recently had a established and respected reconstructive plastic surgeon denied for a mortgage on a sub-$1M property based on his student loan debt and credit score in the mid 600’s…last year he could have gotten 90% financing…NOT NOW.
• Market Analysis is More Sophisticated- Each micro-market behaves differently and I have said it a multitude of times before but now more than ever do I see very distinct differences in the behavior of Manhattan’s micro-markets.  Apartment size, style, and geographical location serve to divide Manhattan real estate into markets that shift and act independently of one another.  When pricing, don’t compare your Upper West Side Classic 7 on a price per sf basis to post war 3BR apartments…they are different markets.
• Your Market Determines Movement in Inventory-The owner of a 4BR condo with spectacular views on the Upper West Side is much more in the cat-bird seat than the owner of the cookie cutter 1BR on the Upper East Side.  Overall inventory numbers are meaningless…if you own a Prewar 2BR in a specific area, ask your agent to track inventory specifically with those parameters.
• Buyers are Both Anxious and Cautious-No one wants to think that they are buying at the absolute peak of the market and at the same time they are reading daily media reports of how awful the "housing market" is performing.  The mixed messages that buyers are receiving are confusing and make the decision of whether or not to buy a home much more challenging than in the recent past.  Sellers should expect buyers with cold feet these days and deals to dissipate during the process before finding the ‘right" buyer.
• Sellers are Nervous-Trust your real estate agent regarding price.  Many sellers are eager to reduce prices these days because they haven’t yet received a bid.  When I started in this business in 1992, properties were often on the market for 2 years or more (we’re not there) and if price reductions were the only answer, we would have been giving places away.  That said, often times, a price adjustment is necessary.  if so, make it count.  Reduce the price significantly enough (10% or more if possible) to resuscitate the property.

Overall, the Manhattan real estate market has changed drastically from the days of multiple bids on every property that hit the market.  That said, those properties with incredible views, layouts, outdoor space or other unique features are still garnering a plethora of interest.  The rest will also sell…it may just take longer than you had planned.

Future of Local Video…Live Feed Tonight

For those who can’t make it to tonight’s free panel discussion on The Future of Local Video, you can watch via a Live Feed right here tonight at 6:45PM:

 

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More Fair Housing Education Needed…Desperately!

After selling Manhattan real estate for 16 years, there is very little that shocks me.  But in this day and age and in a city that is supposedly one of the most progressive in the world, Fair Housing violations continue to baffle me.  Check this out…

We are in the process of selling a property as a pied a terre to a very affluent woman for whom this purchase is as insignificant as buying a pair of shoes.  That’s funny…do women ever make an "insignificant" shoe purchase?  So perhaps that is a bad analogy but you get my drift I hope.  She lives out of state and she and her life-partner will use the apartment when visiting Manhattan instead of dropping a fortune on a hotel.  Yes, I said life-partner, so what?  I will tell you so what…

After a request last week to provide reference letters for the partner (not that unusual except that this is a condo and the partner isn’t on the contract), we received a call yesterday from the managing agent of the building requesting a copy of the couple’s marriage certificate.  WHAAAAAAAT?!?  Does this not wreak of discrimination?  In 16 years, I have never once been asked by a Board, either co-op or condo, for a couple’s marriage certificate.  In fact, i have sold many properties to engaged and married couples (opposite and same sex marriages) where only one person was listed as the buyer and no one asked for a marriage certificate.  Why?  Because it is absolutely illegal!

In this particular instance, the seller, after speaking with her attorney, immediately called management for further elucidation of this request and learned that it wasn’t the Board at all but an agent working for the management company who made this request.  Fortunately the request was rescinded and the agent reprimanded but this could have opened a very big can of worms for this building and it’s owners. 

As I stated above, I have never heard of this before so it is very much a case of man bites dog.  That said, it is evidence that there has not been enough emphasis put on educating certain members of the real estate community about Fair Housing Laws.  Perhaps co-op and condo boards should consider mandatory fair Housing law education for their management staff and Board members.  Otherwise, they may end up with a very large red line item on there balance sheet that represents a lien or loss of a law suit.  Something that is so easily prevented.

Extreme Makeover: Foreclosure Edition

The Washington Post today reveals that one of the beneficiaries of ABC’s Extreme Makeover: Home Edition has successfully squandered the equity in their free home which is now scheduled to hit the auction block:

Symbolic to our era like a sledgehammer to drywall, the biggest house that ABC’s "Extreme Makeover: Home Edition" ever made over — a sprawling, four-bedroom starter castle, a three-car garage mahal with a turret and all — has gone into foreclosure, in the ‘burbs south of Atlanta.

In that particular episode of the hyper-benevolent reality show, which first aired in February 2005, it took 1,800 volunteers a week to demolish the house with the overflowing septic tank that belonged to Milton and Patricia Harper of Lake City, Ga., and then entirely rebuild a new, larger house, while the Harpers and their three children went away to Disneyland. When they returned, they had the biggest house on Ahyoka Drive, with all the appliances and furnishings, plus enough money to pay taxes on it for decades, plus a fund to send their children to college.

The house will be auctioned off, according to the Atlanta Journal-Constitution, next Tuesday on the steps of the Clayton County Courthouse. 

 So how could a home that the Harpers were given be facing foreclosure?  You guessed it…Equity!

The Harpers had used their home as collateral on a $450,000 loan from JPMorgan Chase and fell in arrears, the newspaper reported. He ran a home security business; she mommed at home. Happy to be on television back then, they declined to be interviewed last week, when a news crew showed up from local station WSB, wanting to know wha’ppen.

A high profile story due to the affiliation with ABC’s television show but a problem in many housing markets across the country where people expected home values to climb forever.  Now who is going to buy this house that was constructed in 7 days???

Randy Pausch (October 23,1960 – July 25, 2008)

Perspective check:

I’m sad.  For those of you who don’t know who Randy Pausch is, check out The Last Lecture (below…it’s 76 minutes long and well worth every second).  Professor Pausch died today after a long battle with Pancreatic cancer.  The dignity with which he fought this disease was beyond inspirational and his message powerful…GRATITUDE!

Rest in peace Professor.

Why Manhattan Real Estate Is So Attractive to Russians

Perhaps the fact that Moscow is the most expensive city in the world and NYC is only #22 has something to do with it? (Elizabeth Butler Cordova from Crain’s via Curbed):

For residents around the globe, the Big Apple is looking more and more like a big bargain.

On a list of the world’s most expensive cities to live in, New York City fell seven spots to No. 22, according to a cost-of-living survey from human resources consulting firm Mercer, a subsidiary of Manhattan-based Marsh & McLennan Cos.

So New York City is indeed looking cheaper and cheaper to prospective buyers across the globe.

"The decline in the ranking of all U.S. cities is due to the weakening value of the U.S. dollar against most major world currencies," said Mitch Barnes, principal at Mercer’s U.S. division. "On the bright side, the U.S. dollar’s loss of value may serve to attract globally mobile executives to business centers such as New York, Chicago and Los Angeles. The difference in cost of living can be significant, particularly for those executives with families."

No surprise either that the NY cost of living is driven primarily by the cost of housing but as other cities become more expensive, Manhattan appears to be a bargain to the foreign investor.  No surprise at all as foreign money continues to pour into New York City. 

This is one list that I’m thankful we don’t own the #1 spot!

Sellers Just Want Communication

In the current real estate market where properties sometimes spend more time on the market than a seller and their agent would hope, there is one thing that I find to be the most important aspect of maintaining a positive relationship with a seller and that is open and frequent communication. 

Two of my sellers who previously had other agents representing their property have recently shared with me that those agents never called or emailed them after a showing or an open house.  Now think about that for a moment.  If you’ve ever sold a home, you understand that your hopes, aspirations and future plans can all be put on hold until you procure a buyer for your property.  That said, it makes perfect sense that you would want to know how each and every showing is going with the home.  Here are just a few things that I and my colleagues try to do to manage our seller’s expectations and keep them informed throughout the marketing process:

• Call the seller as you’re walking out the door of the open house:  Whether 50 people or no one showed up, the feedback is imperative to help you and your seller to stay aligned regarding marketing strategy and intended outcome.
• Call the seller as soon as you leave an appointment:  Again, all feedback is important and helps both you and the seller gauge the market.
• Don’t sugarcoat the feedback:  Too many agents feel that it is their responsibility to tell the seller how wonderful their home is and keep the seller sheltered from nasty comments about their home.  Your job is to sell the home and if 10 people say they can’t stand the bathroom renovation then the seller needs to know. 
• Keep a log of showings and feedback:  I must confess that this is something that I’m not always on top of but when I do keep these lists, it is very effective in effecting change in marketing strategy.
• Ask how often: If you want to know how frequently a seller wants to hear from you, ASK.  Perhaps your seller wants to give you the keys and not hear from you until the closing.  if so, good for you.  More often, they will expect regular updates but make sure you know what THEY mean by "regular" as your definitions may vary.
• Don’t Hide!:  The kiss of death for a listing agent is to avoid contact with a seller.  They aren’t trying to annoy you, pester you, or make your life miserable.  they just want to sell their home and they want to know what your doing to make that happen.  If you want to make sure that a seller doesn’t sign an extension when your exclusive expires, then don’t talk to them through the process.

These are some of the things that I and many of my colleagues make great efforts to do as part of the service that we believe is expected of us.  If you constantly feel like your seller is a "pain in the neck," consider the check that they have to write to you when the transaction closes.  That should make frequent communication much more palatable.

Mediocrity Abounds In Manhattan Real Estate Market

Sales volume has definitely picked up since mid June but the qualtity of property hitting the market seems to be lacking for the most part.  90% of my business is representing sellers with the sale of their homes but the 10% of business that I conduct with buyers often takes a great deal more time and energy.  So imagine the frustration when you’re fortunate enough to have well-qualified and ready, willing and able buyers for months while nothing "magical" hits the market to suit their needs. 

That’s precisely what I have seen over the past 6 months.  Of course some buyers are pickier than others but a lot of mediocre property has hit the market recently most with price tags that are way out of line with their "just average" features and amenities.  I think that part of the problem lately is that some sellers and their agents are coming to market as they would have during the height of the housing boom expecting a quick sale at top dollar despite the property’s condition. They aren’t making the effort to decluttter, touch up paint, stage, or even clean windows.  Why would they as EVERYTHING has sold over the past decade?

Now, there is some resistance by buyers.  Most have little or no desire to take on large renovation projects unless of course the property is fairly and attractively priced with the renovation costs considered.  Some buyers even comment that they don’t want to do a kitchen, a bathroom, or even floors for fear that they won’t recoup the cost of their improvements should they have to sell in the short term.  I have very strong feelings about renovating to sell an apartment.  More often than not, I’m against it unless the price is so discounted that it makes financial sense.  That said, I’m a HUGE fan of sprucing up a place to help effect a sale.  I know I have said it before but here are just a few things that almost every seller can benefit from when selling their home:

• De-clutter:  make sure books on bookshelves are vertical, not too many family photos, maximize amount of exposed floors, and pack away the extra books, toys, photos and chachkes.
• Touch-up paint:  dingey rooms or hallways that are faded, scuffed or just tired should be spruced up with some fresh paint (eg.  One of my sellers painted her apartment after 2 months on the market and it sold immediately.
• Consider some floor work:  polishing, waxing or buffing floors may be all you need to restore the shine but a minor sanding and refinishing may be worth it if the floors are in horrible condition.
• CLEAN, CLEAN, CLEAN:  first the windows and then everything else!  The home should be spotless.  I can’t tell you how many times I suggest a seller clean the windows and they are stunned at the amount of sunlight the grime was blocking out.  Additionally, dust and grime in the home are also off-putting so get rid of the dirt before showing the property.
• Minor renovation?:  If you’re really bent on renovating prior to selling, consider a minor job rather than a complete gut.  Painting or refacing kitchen cabinets, replacing old hardware with polished stainless or brushed nickel, or replacing old appliances may help your apartment stand out from the rest.
• Staging:  It’s likely that a good stager can take what you have and re-work it to freshen up the look of your home.  if not, you may want to consider renting furniture but make sure you get more than one broker/agent opinion on this before incurring the expense.

These are just some suggestions for minor repairs and touch ups that will create a new first impression of your home for the prospective purchasers.  And who knows, you may like the new and improved digs so much you will no longer want to move.

I’m Being Stalked!

It seems that everytime that I have the opportunity to blog, I’m apologizing for the light number of postings.  So I’m going to stop that and just blog as much as I can.  It’s summer and although vacation took me away for a week, I have actually been quite busy selling real estate (4 closings this week and 5 contracts signed in past few weeks).  But in addition to my regular real estate business, I have been wasting time with a STALKER!!!  His name is Jay, Jonathan, Mike, Pete and John Z.  That’s correct, 5 personalities all with the exact same poor writing style and annoying line of questions have been constantly emailing me, my team members and now my managers in an apparant effort to simply waste our time. 

The emails began about 8 months ago and have gone through varied periods of frequency and oddly enough have addresses each and every property that i have listed in that time period.  In an effort to do my job, I have patiently responded to all of these ridiculous inquiries…until now.  I’m done. 

So Jay, Pete, Mike, Jonathan, and John Z, if you’re by some chance reading this, please leave me alone.  This will be the last communication that I have with you "fella/s."