WE ARE OUT OF THE WOODS!
An important part of my job is identifying and forecasting trends. I am expected to know market trends of pricing, unit desirability, design appeal, buyers’ needs, and manage agents’ expectations. Our clients rely on our insight and foresight. Everybody knows what the historical data is. Nobody needs a report that shows old closed data. Our value is the interpretation of current data and how that may affect the future. Developers want to know where the market is going. Buyers want to know if the market has bottomed out. Sellers want to know if they should take the offer on the table. Agents want to know if there will be deals to be made.
To achieve this effectively, I need to stay very connected to all of the touch points that determine the market. How well I do this…effectively…defines my value. There are no secrets, just riddles. Here are a few of the pieces of the puzzle I absorb to make a determination:
I measure open house traffic.
I speak to agents everywhere to see what buyers are saying.
I speak to buyers.
I speak to sellers.
I speak with developers.
I communicate with bankers.
I track offer activity – How many and at what levels.
I speak to owners of companies.
I stay abreast of new developments on the horizon.
I read – Everything from blogs to books.
In short – I act like a sponge.
In February 2008, I stated that the market would possibly decline (in some segments) by as much as 40% off the high. I was criticized by some of my peers that I was being irresponsible to the sellers who had property on the market for sale. (We sold and closed on a $6 Million property that was previously asking $11 Million a month after). I contend that the speed and willingness of the markets acceptance of this correction stimulated the recovery we are now seeing.
Right now, I would boldly say that we are out of the woods in New York City. For this cycle. Open house traffic is robust, rates are low, contract signings are on the rise, and there seems to be a shortage of inventory of quality homes. Consumer confidence is also higher than it has been for over two years. Does this mean we can expect prices to appreciate at the alarming rate they did over the previous decade?
Yesterday’s article in The New York Times was a reaffirmation of something people have been saying for years. It is truly perplexing to me that this measure of quantifying property value is still quoted and misquoted on a daily basis and has become the benchmark amongst “professionals” in the appraisal industry. Some “professionals” have actually made a profession out of doing this.
When the first report of this type came out 15 years ago, I contended that the measurement of a home is one of the most misleading ways to quantify the value of it. I say this as a broker who has walked through thousands of homes with buyers after seeing the things that make a difference to them (not as an appraiser). Clearly everyone wants a larger apartment, but there are things more important in a Buyer’s mind:
The bedroom count
The volume of the space
And yes…the “feeling” of the space!
This hasn’t stopped some appraisers (turned analysts, turned investors) from continuing to use size as the determining factor in value.
(This is why the CORE Realtime Report doesn’t include square feet as a barometer of value).
Perhaps it is our need as an industry (or the desire of the media) to assimilate Real Estate to Wall Street.
But the two are fundamentally different.
Narrow your focus
Because selling and buying is more effective when you have a specific goal in mind.
If you’re a buyer
- set specific parameters
If you’re a seller
- define realistic goals
If you’re a broker
- be an expert
It’s impossible to be effective when you’re all over the place.
Does history repeat itself?
Never literally…..but always conceptually
It’s always wise to look at the past,
And relate the past to current circumstances.
How we acted
How we reacted
How we innovated
How we were defeated
How we responded
The MTA is taking us on a ride back in history on vintage subways and bus rides
every Sunday until the end of 2010.
I look forward to the day my children will be going on a historic tour of electric cars that their parents’ generation once used.
…and the weather is cold.
We brokers have a saying:
“If you’re out with a buyer in the snow, then you know they are for real”
Real estate is seasonal.
So take advantage of that if you’re a buyer!
Look at property when no one else is.
Buy that penthouse with outdoor space – in the winter – and buy a summer home – in December.
You’re more likely to get a deal when there’s less activity on a property!
AKA “The coffee revolution”
I’m not sure if it’s because of the importance of coffee in our culture, or our need to improve everything, but I think that the evolution of coffee as a product is emblematic of our society.
The first improvement to the experience came many years ago. It was the plastic lid the deli used to give us to cover our coffee. The one that was impossible to make a drinkable wedge with, so you spilled all over while trying to tear a neat hole in the lid to drink through.
The next improvement was the customized raised top with a neat drinking hole in it. No more spilling. Sort of…..
Then came the “I Love NY” cardboard cup that burned your hand when you held it. That was improved by adding a customized “sleeve” where your hand goes.
Most recently, we discovered that walking and holding a cup with an open hole don’t really go together. (Not like chewing-gum). This was improved with the little green “stick” to go in the hole, so you don’t walk and spill.
Much like the take-out coffee experience, real estate is similar in the process of discovery and then improvement. It takes living with it (and in it) for awhile to fully realize the flaws.
I have yet to see a floor plan, or apartment that can’t be improved upon. And getting closer to perfection is an evolutionary experience. Every new buyer usually adds value or something better to the experience.
If you’re considering a renovation prior to moving into a home – rather wait – live in it awhile – and I’m certain you’ll find some things you never thought about.
One reason real estate brokers have a generally-less-than-stellar reputation as professionals is that because a large amount of the time, the client is unhappy.
Unhappy beyond our control -
And unhappy people like to lay blame…
Usually on “us”.
The buyer loses a property because they’re outbid -
The broker gets blamed…
The seller loses the buyer because the property is overpriced -
The broker gets blamed…
The board turns down a buyer (for some unknown reason)-
The broker gets blamed…
Is the key to being a good broker having the ability to seek out and work with generally happy people who see things as they are?
I think so!
What better gift to give than something inspired by Frank Lloyd Wright, one of America’s most respected and celebrated architects and designers? We thank DesignCrave for compiling this list of top ten FLW-based gift ideas (LINK?). Our favorite is the Midway Gardens Chess Set which has pieces that are based on the sculptures Wright created for Midway Gardens! These are the perfect gifts for friends who are architecture fans or for those who simply like to collect cool items!
I love blogs
I read blogs
And if I have something to add – I sometimes comment on them.
NOT as Mr. Magoo…
NOT as Mr. Real Estate…
NOT as Anonymous…
BUT as Shaun Osher!
I am sometimes the subject of “other people’s” blogs,
And I would love to be responsive
But I’d like to know who I am responding to.
Wouldn’t the world (wide-web) be a better place if you couldn’t hide?
I think a lot of sites would have more credibility
If people couldn’t comment anonymously on a blog!
If you have something to say,
If you want people to pay attention to what you have to say,
Don’t be a coward.
For the 2010 Holiday season, Cool Hunting has teamed up with Gap to introduce their first-ever pop-up store! Gap’s project space on 5th Avenue is now home to products from independent companies based in the New York region. Each product selected was based on the same principles that inspire Cool Hunting’s editorial including innovative design, artisan craftsmanship and social and environmental consciousness. The space showcasing these products is also “home grown”. Cool Hunting assembled a collaboration of local partners to create the space, such as ByKenyan, the interior designer. Supporting locally sourced products is probably the greatest gift we can give to the city we love this holiday season!