Thursday, January 24, 2008

NYC HOUSING MARKET REALITY CHECK

We all know that the Euro is crushing the dollar tight now. Yesterday, the Feds gave us a belated MLK Jr day present, by dropping interest rates 3/8ths of a percent on 30 yr fixed mortgages up to $417K!

This is hilarious to me when I woke up today and heard all morning on the news and in papers about how people are worried about the economy and the housing market crashing here.


To illustrate how ABSURD this talk is, I have quoted one of my mentors comments below which REALLY makes you realize that now is the time! Get in while the getting is good!!!

I got my real estate license on 2/1 in 1982 when I was a 21 year old senior at Cornell.

The first house I sold the buyers got a mortgage at 16.5% 30 year fixed.

I came to Manhattan in the fall of 1984….the first apartment I sold had a mortgage at 13.5%

I bought a home in Rockland County in 1987 and was very happy to get a mortgage at 11% fixed.

For a large part of my career I never dreamed that we would be able to work in an environment with interest rates below 10%.

With current interest rates at around 6% or lower for 30 year mortgages can anyone really say the sales market is tough??? Hello?

I worked through and survived the real estate depression of the early 90’s…..it was TOUGH! This market is NOTHING like the market boom of the 80’s that resulted in the stock crash of 1987. Manhattan is extremely popular now. Look at the articles saying that the suburbs are losing people to the CITY! Young families want to stay in the city more and more these days. Crime is way down from the past. NY is the financial capital of the world….arguably the closest thing this earth has to a world capital.

NY has the lowest rate of home ownership of any city in the country. More people rent here than anywhere else. We have a Manhattan rental vacancy rate of about 1%??????? There is no over supply of housing….not even close….nor could it happen anytime soon. The dollar is low, making Manhattan very attractive to foreign money and other countries have made it easier for people to get their money out. We have advantages that no place else in the country have!!!!!!!!!!!!!! The island is not getting any bigger…..Manhattan can not sprawl out like other cities…only up! Manhattan is a tiny little island full of the wealthy and they move all the time! Aren’t you glad you are here……..no other area of the country has not suffered…..we are in a unique situation!!! There is no better place to be in real estate! People get frustrated with me because I don’t worry about our market…..I’M SORRY!!!!

They told me to worry after 9/11. They told me to worry in early 2003. They told me to worry in January of 2005. They told me real estate was going down for sure in 2007. What happened….Manhattan real estate has been going up since 1993 despite what they all said. Citi agents sold $1 Billion worth of real estate in 2007! I don’t know what is going to happen…..I predict stable prices this year but it really doesn’t matter to me. We will still make a living. What we do is very honorable….we help people find a good place to live!!! No matter what people always need a place to live!! What would happen if prices went down 10% this year? Well, the reality is that there probably would be MORE transactions and more listings. Do you have to change your business plan? Not if you have been listening. We teach you to focus on buyers who: Have the money and you know how much. Have a valid reason and time pressure to buy. Are loyal to you and you have a good vibe from them. In a declining market the advice is the same!

With Sellers do the same things….focus on people that need/have to sell…..it’s simple. Pay more attention to price reductions as opposed to new listings but the principles are the same in any market. A market correction would not be a bad thing!!! Stronger agents will prosper and the incompetent would leave the industry.

What if the ice on Greenland melts and the Atlantic Ocean rises 50 feet? My advice would be to move to higher ground! I’m sorry but I’m not worried…..we’re all going to do just fine in 2008 whatever the market does! This is a real snapshot of over 18 years of experience in the NYC real estate market. It gives you a great view on how silly the talk of a "CRASH" in the housing market here is. If interest rates have fallen over 10% in 18 years, I think it is safe to say that we are in a GREAT buyers market and ironically, it is also a STRONG market for owners and investors looking to unload if they are savvy!

The construction sites you see going up all over are 95% Condominiums. This makes the people selling older units have to really rethink their asking prices or risk having a property sit on the market for so long, it gets what I like to call the "bruised apple" syndrome. NOBODY will touch it because it has sat on the market for so long, it's bruised! This will force owners looking to resell to do one of two things if they are smart, price accordingly or price a bit lower to create interest. This is a unique time in our lives and I can not stress the importance of being in touch with someone who is sociable, in the know, forward thinking and yet conscious of the current times.

That's where I come into your lives. You know who I am and how to reach me!

Wednesday, January 23, 2008

"Wake up Toto, we're not in Kansas anymore!!!"

Greetings all, I trust that your New Year is off to a great start.
My apologies for not posting as much this month, it has been very busy indeed in the New York Real Estate Market. This post will give you an idea.

Which brings me to this point of this post. So there is all of this talk this week about the current state of the economy. I like to call it the Holy "Market" Trinity. The job market, stock market and the housing market . Personally, because I live in NYC, we are somewhat insulated from the rest of the country from these issues and so the only thing I can see in all of this talk, is a lot of fear. It has never been an emotion that I encourage, but it is a very basic and common human emotion to fear something which is unknown.

First things first, the job market. I have had more "jobs" by my thirtieth birthday, than most people might have in a lifetime. From experience, I can say that the job market is usually volatile when a Republican is in office. I am not endorsing any particular party by saying this. I am merely pointing out the facts, as history will show. When I look back over the thirty plus years of my life and the subsequent Presidents in power, there is a direct correlation between a "good" economy and a "lean" economy. The overall cost of living and the rate of income are so askew, it is somewhat pathetic and appaling. I recall reading a study stating that the average American has a MINIMUM of $15,000 of debt. This is clear when you realize that the AVERAGE American is also making around $37,500 per year with living expenses in most places averaging above $25,000 per year, what can most people live off of or expect to save?
The bottom line in this respect, we must all educate ourselves consistently in order to go out and do something useful and self sustaining or at the very least, always in demand. The more you know, the more you grow and thus the more you can expect to make some more dough! If you sew good seeds, then you will reap good fruits! If you are content with just getting by, then this all is not a concern to you, as you will just get another "job" when you are laid off from a company downsizing. We all make our lives and nothing happens to us by "chance".

Secondly, the stock market. Now this is not my area of expertise, but I did work for The Street.com and another Financial Consulting firm, so I have some knowledge of this field as well. I have always viewed the stock market in a similar vein to Poker. Now some people will say this is very true, as both involve a certain amount of luck. I have never really believed much in luck in the common sense. I feel that we all make or create our percieved luck by being prepared. When you are better prepared, you stand a better chance of being successful.
While certain things are always out of our control, being prepared is the one thing that IS in our control and can help us minimize the "helpless" feeling we sometime call being "unlucky". While no person can predict flawlessly what stock will rise and fall daily or dramaticaly each quarter, by being abreast of current events, the world climate or even more simply, changes in economy, politics, spending trends and the like, we can have a better idea of what stocks will peak and fall with a greater idea.

Lastly, the Real Estate Market. Now, look at the exact title of my current area of expertise. There is something very true and powerful about the verbatim of the term. Owning a home or apartment is owning a REAL ESTATE. It is not an intellectual property, like a song, story, movie or book. It is not an asset, like a stock investment, savings bond, CD or other financial investment. It is something REAL and tangible. It can be appraised and valued, usually with an increase over time (especially in NYC).

That brings me to this in closing, the changes we see happening in our city, state, country and the world, are constant. The one thing that is certain is that people will always need housing. here in NYC, that is an extreme understatement. People are lining up for housing here!

You know who I am and what I do, so take the first step and get in touch!

Thursday, January 3, 2008

What Slump?

Happy New Year to all! It has been a busy year already and there is no shortage of people looking to move, or developers and owners looking to sell. If you don't believe my expert industry insight, then listen to the media.

http://www.nypost.com/seven/01032008/news/regionalnews/manhattan_defies_lump_743415.htm

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