I had the pleasure of attending the Real Estate Masters Series: Summer 2016 CEO Summit at One Bryant Park earlier this year. The topic for this summit was called, The Outlook on New York Residential Real Estate. To be honest, I expected that the tone of the conversation would be the same typical message that we hear from many in the real estate industry, (“the economy is strong and the sales and rental markets are continuing to do well even if the market is softening”). What I heard was a far more nuanced analysis.
The panelists, which included Pam Liebman from Corcoran, Shaun Osher from Core, Dottie Herman from Douglas Elliman, Robert Reffkin from Compass, Diane Ramirez from Halstead and Clelia Peters from Warburg, was moderated by Jeffrey Appel. The beginning of the talk focused around the very high end luxury market in New York City. The panel agreed that Manhattan, which used to have a dearth of high end real estate available, now has a glut of it. They indicated that developers are working to address the issue and the panelists anticipated that this issue would be resolved soon through prices being lowered.
Dottie Herman thought that the important part of timing in real estate is not when it is purchased, but when it is sold. She advocated stressing this to buyers who were nervous about buying in what the media has painted as a softening market, especially as she expects the interest rates to be rising soon. She thought that people would regret not buying now, when rates are low. I have to say that I agree with her. I am expecting interest rates to be rising soon as the quantitative easing through the Federal Reserve tapers off. Janet Yellen recently noted that she expects to be raising rates at the end of September as well.
Shaun Osher thinks that in retrospect, the first quarter of 2016 would be seen as one of the strongest real estate markets in New York City. He said that the shadow inventory exists because potential sellers want unrealistic prices and aren’t willing to accept a lower listing price.
Jeffrey Appel noted that if someone purchased in 1974, their rate of appreciation to today would be 715%. While this is an incredible rate of return on an investment, I wonder how well this statistic will hold up in the future. The 1970’s were an uncertain time in New York City, when many thought that it would go bankrupt; today Detroit might be a modern comparison.
The conversation turned to what made real estate firms thrive. Since Feeder is a startup real estate firm, I was interested to hear the panels’ thoughts. The overwhelming response from everyone on the panel was that agents are the lifeblood of any company and that culture is what brings them to a firm. Shaun Osher sees each firm as having a distinct culture that draws similar agents to it.
Dottie Herman thinks it’s imperative to show agents how to build their business by by teaching them how to sell real estate and the people skills that they’ll need in the field. She sees this investment as the most important thing to offer agents. She said that the biggest aspect of selling is to be able to listen to what it is your client is looking for in a home and I couldn’t agree more.
Robert Reffkin noted that while technology is an incredible tool for agents to have, it will never replace the agents themselves. He sees technology as a way to enable agents to work more effectively and collaboratively as a team while providing real-time analysis on the market and pricing. We’re proud at Feeder to be on the cutting edge of technology to empower our agents and we look forward to staying ahead of this curve.
Interestingly enough I thought that Pam Liebman made the most honest and direct statement when she said that rents are “too damn high and that they need to come down.” It is refreshing to hear such poignant observation being made by one of New York City’s top residential real estate CEO’s.
Overall, besides the ongoing squabble between Corcoran and Compass, the Summit provided some thoughtful insight from those at the top of their game. It was a great event to attend and I’m looking forward to seeing who will be speaking next year and wondering if Jeffrey Appel will add speakers from start up firms such as Feeder.