Thank You Global Recession

So, the recession huh? It’s been crappy. It’s been hard. People have lost jobs, loans, homes, and life savings. Real Estate, as an industry, was hit particularly hard (just because we may have started the crisis doesn’t mean we can’t lick our wounds too) with thousands of unsold homes languishing on the market, prices falling, developers losing entire buildings and being responsible for personal guarantees, companies going out of business, and non-existent commissions being all too common. I don’t think there is anyone who doesn’t want this to be over…pronto! But in the spirit of thanksgiving, I would like to take a moment and discuss 5 reasons why I am thankful that I have worked in the Real Estate Industry during a recession (let’s just hope I don’t have to go through another one).

Thank you recession for reminding me:

1. Location is King…again
It may be the first lesson of real estate, “location location, location” but it took a global recession to remind the industry that “if you build it, they will come” should only work in movies. Gentrifying neighborhoods is a process; it takes time, and evolves naturally. You can’t just enter a pioneering neighborhood, slap up a condo building, and expect to get a $1,000,000 for a studio. Conversely, buyers – before you buy an “investment” home think to yourself – “would I live here?” and “am I going to live here?” If either of your answers are no – DO NOT BUY – go back to the Upper West Side where you belong and where there will always be a market for your home.

2. You Can’t Always Get What You Want
When the financial industry started giving out mortgages like candy people forgot that not everyone can afford a million dollar home. Yes we all want one. I personally want an $8,000,000 one at 1055 Park Avenue but that doesn’t mean I can have it. No doc loans, lenient regulations, and creative financing made us all feel like millionaires. But ask anyone who is now struggling to make a mortgage payment they can’t afford, or whose falling home prices has gotten them into an upside down situation and they will tell you that it’s not worth it. The recession has reminded us that it’s time to get back to basics, it’s generally accepted that your housing costs should be no more then 30% of your income (http://www.lendingtree.com/smartborrower/saving-money/managing-your-money/budget-rules-of-thumb/). Remember that number and buy a dream home you can actually afford.

3. Read the fine print.
Buying in new construction presents risks that are different from the risks you assume when you purchase in a coop or buy a single family home. In a new condo there is no problem with board approval, old furnaces needing to be replaced, leaky septic tanks, giant lawns that need mowing and don't care that you don’t own a lawn mower, and who knows what other surprises you will find in the attic, basement, buried in the yard etc. New construction carries its own risks including construction not being completed, re-assessments of common charges or operating budgets, and the developer holding onto homes making your neighbors renters not homeowners. The thing about new condo buildings, at least in New York, is that their offerings are regulated by the Attorney General. This means when you buy a home, you get a giant legal document that addresses every possible risk that could come up when buying your new home. It also, gives you recourse if things don’t go your way. The AG is almost ALWAYS on the buyer’s side – remember The Rushmore? (http://therealdeal.com/newyork/articles/buyer-sues-gary-barnett-extell-for-1m-deposit-at-rushmore). So what did the recession teach us? Read the damn offering plan. Every word of it. Understand risks before you take them so you can make an educated decision.

4. Don’t buy at retail
When the market was overheated people were bidding up prices, buying homes after triple digit price increases, and generally purchasing with exuberant disregard of price. The recession has put buyers’ feet back on the ground while simultaneously bringing developers to their knees. Ideally, things will end up somewhere in between what was and what now is. But what we can’t forget is that negotiation is a good thing. It allows both buyers and sellers to split the power during the transaction and in a successful negotiation, leave the table feeling satisfied. It’s a win/win and it’s how markets operate in most other countries and how it should work here too.

5. You got to know when to hold ‘em
Real Estate, like all markets, is cyclical. It is not always going to be up and it’s not always going to be down. Be patient, be educated, and make sure you are in a position to wait out a storm. Economists are forecasting that the pace of economic cycles is increasing – meaning we will have shorter periods of boom and bust and will experience both more frequently (http://ideas.repec.org/p/nbr/nberwo/4005.html_). Let’s hope it doesn’t get this bad again, but let’s prepare for the fact that it probably will.

Celebrate Seasonality

With Memorial Day just barely behind us, and the advent of summer firmly upon us, the real estate industry begins to party. Calm down, we are not talking keggers, who’s who events, or even social networking (although we will ask you to don a name tag). These events are strictly marketing and sales tools where each community in turn throws an event targeting individuals whom they think are most likely to buy or help sell homes before the summer doldrums take over. Seasonality has always been a part of real estate sales. Historically the fall and the spring are the busiest selling seasons while the summer is hands down the slowest. There is no exact science to the change in buyer patterns but I find myself having a lot of conversations that go something like this:

Sales agent: “They loved the home. It’s everything they wanted and it fits into their budget!”
Me: “Fantastic – did they buy it?”
Sales agent: “Oh, no. They want to wait until they return from their 6 week cruise, trip to London, and week in the Hamptons before making a decision.”
Me: “So this fall?”
Sales Agent: “Yup”

Check out http://www.urbandigs.com/2007/04/data_shows_nyc_is_seasonal.html for a slightly more analytical presentation of seasonality in the real estate market.

Now that event season is here, crafting party concepts and coordinating events that will attract people despite their busy schedules (do I go to the Palmer Hill event or my daughter’s graduation?) take a central role in my daily responsibilities. To be honest, event planning is not one of my strong suites. I am not particularly interested in, or good at, organizing caterers and I know absolutely nothing about floral arrangements or linens. In fact my idea of a good time involves nothing more then plastic cups, some chips and guacamole, and a bucket full of Coronas – probably not a concept that sells luxury homes. Luckily for me there are usually professionals on hand to help and we have been able to throw some great events like our recent Pool Grand Opening at Palmer Hill (thanks Garden Catering http://www.gardencatering.net/). If you missed it, or are interested in taking advantage of some free food and drink while previewing and buying (hint, hint – because the volume of sales goes down in the summer your buying power increases actually making it a great time to buy) not to worry, there is still time to get yourself on the list. All you have to do is register on the website of the community you would like to preview and in the comments section of your registration write “Andrea said I can come.” Upcoming events include but are not limited to:

Hudson Harbor – various events all summer long including Rosé on the River, Guest Chefs, and Wine Tastings. http://www.hudsonharbornyc.com/

Palmer Hill – Fourth of July Bash, and potentially outdoor movies, Shakespeare readings, and homemade ice cream tastings throughout the summer. http://www.palmerhillhomes.com/

Cassa – Grand Opening Event featuring an appearance by World Famous architect Enrique Norton. http://www.cassanyc.com/

See you there – I will bring the bucket of Coronas.

Gotta Have an Aqua Grotto

I took a field trip to Jersey City yesterday to see what life is like on the other side of the river. After navigating my way onto the correct PATH train (at least they take Metrocards) and bracing myself for big hair, guidos, and sightings of The Boss – I have to say I was pleasantly surprised. Jersey City itself may be nothing to write home about, but the aqua grotto at Trump Plaza JC (http://www.njtrump.net/) – mmmmm now this is definitely worth a visit or maybe even a new condo. I have been hearing about this “dazzling” amenity since it was just a concept on the drawing board but I have to say, I had no idea just how cool it was going to be. This picture doesn’t even do it justice. Here are five reasons why the aqua grotto has exceeded my expectations:

1. Who doesn’t want to be able to throw their own bash in the grotto? It’s like being Hugh Heffner without the ambiguous filth.

2. I would like relief from muscle tension and stiff joints, lymph detoxification, blood circulation improvement, sinus congestion relief and a boost to my immune system - all courtesy of the steam shower (http://www.steam-sauna-benefits.com/steam_room_benefits.html).

3. Marble floors, cushy lounge chairs, pitchers of water with lemons floating. Enough said.

4. When you walk in, the grotto is warm and inviting. No odor of chlorine anywhere!

5. I heard some rumors that residents are kicking back and enjoying wine coolers in the grotto. Yup, wine coolers in the grotto – that’s just my style.



My apologies for the short and late post this week – my econ mid-term is looming large. Does anyone know how to take Total Revenue and Calculate Marginal Revenue from it?

Back off - I don't like Airline food and I am just looking

I saw an ad yesterday that said “If you like airline food, please don't fly Austrian.” Huh? I couldn’t resist this forced logical reasoning. I don’t like airline food…so I should fly Austrian? Hahn, yes! I DON’T like airline food so I SHOULD fly Austrian! Brilliant. It’s like a blatant double negative - “I am not not licking toads.” If only real estate ads could be this clever. And maybe they can:

If you like paying your landlords' mortgage please don't buy your own home.

If you like don’t like building equity please don’t buy your own home.

Somehow it just doesn’t have the bite of those Austrian Ads. Gute Job-Kerle

Moving right along. Visited one of our sites in Connecticut and was once again amazed by how many people had stopped by and agreed to receive a sales presentation “just to see the model.” I find this mind boggling. I personally will do anything in my power to not speak to a sales agent. It doesn’t matter what they are selling – I am “just looking.” It doesn’t matter if I am determined to buy and know exactly what I want – don’t bother me, I am JUST LOOKING! And I will continue just looking right up until I bring my merchandise to the register and fork over my Amex Card.
Many of these people on the other hand welcome the presentation. Now don’t get me wrong, it is a particularly lovely townhome model (http://www.palmerhillhomes.com/), and it is always fun to see how homes are decorated, but I have a suspicion that some of these visitors aren’t just looking. Some of these people are just like me and they are secretly picking out their home. It’s okay. I can wait...but not too long…please…

I have jury duty next week and have been thinking about how to sell condos to citizens doing their civic duty - ideas anyone?

Real Estate

Truffles Tribeca's new e-mail blast campaign has created a buzz from anyone who was lucky enough (?) to receive it. http://curbed.com/tags/truffles-tribeca. But between rumored opium beds, references to swine, and shameless hot chick promotions what is it that Truffles is really selling?

They are selling real estate just like every developer trying to rent or sell their piece of the rock in Manhattan. And Manhattan real estate has never been more creative at courting brokers and buyers alike. From negotiating on price, to buying down financing, to giving away free trips- Manhattanites and Bridge and Tunneler's are wising up to the fact that now is the time to buy if they are looking for a smoking hot deal.

As a project manager for a Real Estate Marketing and Sales firm in Manhattan I am one of these brilliant minds coming up with the exciting traffic driving ideas. Are you a broker? Want to win a trip for 2 to south beach? www.cassanyc.com. Are you a buyer? Looking for once in a lifetime financing programs and a free gift certificate to Cornelia Spa? Check out www.galeriecondo.com. Help me out here people. Visit our buildings, visit every building in Manhattan. Give us your best offer. Buy a home. Buy 2 homes. Stop Renting. Move Forward. Now is your chance.

In other news, Colgate University Hockey held it all together yesterday and beat ECAC champions Yale in a messy but still victorious 3-2 upset. Take that Ivy League