Tuesday, November 13, 2018

Some great insights for both buyers and sellers from Deanna Kory

The only thing I disagree with is the momentum in the market, for us it's been terrific. We have a large number of buyers coming out of the woodwork as they see listing prices drop. I'm not sure where we bottom out, but the distinguished Noah Rosenblat thinks we're pretty close, time and his charts will tell.

Part of this discussion is about the divergence of the economy and the real estate market. Many folks are having a difficult time understanding how we can have a declining real estate market with such a strong economy. Now those who think the real estate market is bottoming out perhaps in the next quarter, then strengthening, are banking on the fact that the economy will remain strong. But will it? I think we'll see the equities market 'catch up' to the real estate market over the next couple of quarters. But of course take this with a grain of salt as we should any short-term predictions. Personally I'm feeling more bullish on my real estate holdings, moved all equity positions to cash 3 weeks ago.

Watch discussion here!

Monday, November 12, 2018


I thought I would post a recent picture of the Burkhardt family (minus Kirtana, 30 and Eli, 34). That's my youngest, just turned 6, Zoey. Yes I hit the reset button!

Last July Zoey was diagnosed with type 1 diabetes. More or less it came out of nowhere. At least for the major symptoms. As a matter of fact we picked her up from camp the morning she was diagnosed, she seemed absolutely fine other than very hungry! When we got to the hospital an hour later, her blood sugar was 940! The doctors and nurses  called her a miracle. She was in the ER cracking jokes, being as precocious and silly as ever!

My wife, Cheryl knew something was wrong. When we went to the pediatrician that day, she had packed a bag for the hospital knowing what was to come. I was in denial right until the doctor walk into the office with a very concerned expression on his face. Unbeknownst to us our pediatrician has been type 1 for 27 years.

Fast forward to today, with the help of some amazing technology and great support from family and friends, Zoey is doing great!

If you know anyone with children with type 1 diabetes, please feel free to have them contact me.

I'm posting this because November is type 1 diabetes awareness month.



Tuesday, October 23, 2018

Market Update : The One Many Have Been Waiting For!

Market Overview

The last market crash was quite a crash indeed. While there was certainly some proverbial writing on the wall, for the most part, it caught many off guard. Then, as fast as it came upon us, we bounced pretty quickly off an easily defined bottom (January 2009, give or take). From there, the market began its epic rise, peaking in 2014 (though some peg it at 2015). While those two years were extremely difficult for buyers, sellers, on the other hand, were doing their happy dance as multiple bids stacked up like lunchtime orders at Shake Shack on a Saturday afternoon!

Currently, after an almost 9-year run-up of prices, we are in what almost everyone agrees is a buyers market. This was a slow and protracted move that seems to have started around the end of Spring. It was so subtle that, quite frankly, I didn't really notice it happening. We were very busy all year with one exception: around the last week of July through the first week of August it went very quiet. This got my attention, I even got a bit concerned. "Is it us? Do people not like us anymore?" We had just signed a contract (8/10) for a large home on RSD, listed by a well-known broker. So, I casually inquired, "Seems like things are slowing down a bit?" And without missing a beat she went on a tear about how agents in her office were "losing their minds," she herself just pulled 11 listings off the market. So we then chit-chatted a bit more about the market, various cycles over the years etc. Secretly, I was smiling a smile of relief, "it's not us!"

That said, by the second week of August we had a burst of business. Buyers were seeing the increased inventory and reading the various articles regarding the sad state of the market. And as was expected, we saw a nice little pop on the second week after Labor Day, including a contract signed on our listing at 2 Charlton Street after relisting at a reduced price.

Looking over the email I sent out in early July, I was feeling a bit more optimistic, "stable to slight bias towards buyers'. That buyer bias has certainly gained a lot of traction!

                                                Where are We Now?

We have seen a significant increase in buyer activity, many that were in hibernation are back in the market and doing deals. We all know that it is very difficult to call a bottom or even predict short-term trends with any regularity.  How many times have I heard clients say, "it's too early, I don't want to overpay," or "I missed it, prices are too high now!"

This is a testament to the fact that the market is not dead. While it has surely corrected, transactions are happening. Buyers are back, certainly in selective mode and with a lot of patience. What is really nice about the current state of things is the selection that buyers have, there are some quality deals going down! We have a few that we are currently working on that would have been madness a year or two ago! The bottom-line is that you are getting a discount today versus 2014.

I can tell you one thing, it doesn't feel like 2007. Back then I packed up my desk at a large firm and began The Burkhardt Group to offer reduced commissions to renters. It wasn't until early 2009 that I introduced our sales model and settled on representing buyers. In my opinion, the current headwinds are coming from rates, macroeconomic forces and domestic/foreign political uncertainty. 2008 was more like a tornado, it came in fast and furious with extensive devastation.

                                           Where are We Going?

This is a much more difficult question. In Vedanta philosophy, only the present moment is real.  However, in real estate, we try and use history as well as recent data to understand where things are going. So far, the data has not been great. You can have a look at the overview of the 2018 market from Urbandigs to illustrate that point. So what is the causation? I think time and uncertainty have played a role in our current situation; bull markets can't and never last forever. I also think that political uncertainty along with economic uncertainty, especially regarding interest rates, is increasing the drag.

I think we will continue moving down/sideways based on the current trends. We need to see improvements in the number of transactions happening. Also, in the charts you will see a large percentage of units removed from circulation: are these sellers that have thrown in the towel? Will investors start dumping properties to lighten their load and what percentage of the market do they own? How much influence does the foreign cash buyer have on our market? So far, the new tax implications, as well as rising rates, have certainly put a speed bump in the road, but the conversation is pretty quiet. We're definitely seeing a serious slowdown in high priced new construction, especially in some of the buildings at non-traditional locations. I am also hearing some chatter about concern regarding the L train shutting down. However, alternate public transit options are being implemented during that time and I think those that can afford it will find other ways to get around: Uber/Lyft biz should explode along the L line! Call me old-fashioned, but I have always enjoyed riding the bus!

                                                  What to do Now?

I think the best course of action is pretty simple: if you are a buyer, take your time, buy based on location and quality, in that order. If you have the proper long view of ownership and all your other ducks are in a row, don't be afraid to pull the trigger. You may not be buying the absolute bottom, however, you are certainly not buying the top. A 20%+ off sale??

Sellers- It's time to take a good hard look at the data. Forget about pricing your home based on comps that are 6 months old. You need to focus on recent trades, and if you don't have any, then you need to make adjustments based on the current data that is available.

Our Listing Service Continues to Thrive!

I applied the same philosophy to listing properties as I did with our wildly successful buy-side model; provide an outstanding full-service model, coupled with our ability to reduce our rates. In ten years we have closed over $600,000,000 in buy-side transactions. We know a few things about buyers which is certainly an advantage when representing a home for sale.

Some firms are spending millions on technology to assist their agents and build the corporate brand. Agents then give a large portion of their commission to the brokerage entity to help support their growth and overhead. We decided to simply focus on what is important, an honest and transparent opinion of your property along with the work that goes into selling your home with a substantially reduced commission. The most you will pay is 3.75% (2.5% to the buyer agent) or 2.5% on direct deals. Its just about where we choose to allocate our dollars!

The most important thing to remember is regardless of who you list with, your home listing winds up in the same place, the RLS (REBNY listing service). This is where the entire brokerage community will access it.
And of course, all of our listings automatically feed to Streeteasy, the most searched site for real estate in NYC.  The two most important factors in listing your home: 1) Get the price right! 2) List with a REBNY member firm. Of course, there is more to it, and I would be happy to discuss that with you over the phone.

Have a look at what we have sold or have in contract. Because of our success with listing homes and the fact we have loved working with sellers! We have now broadened our approach and happy to discuss listing any home (above $500K).
Our model works, the proof is in the pudding as they say!

We recently celebrated 10 years of disrupting the NYC real estate model! It has been an absolute pleasure assisting all of you! I have made some real friends and met a variety of wonderful people along the way! Looking forward to the next 10 years!

Please feel free to call me to discuss the current market in more detail or find out more about what we can do for you.



Wednesday, October 17, 2018

I love writing rebate checks!

I married an efficient business model with outstanding service! This is why we're so successful. And after 10 years in business I have not spent more than $100 on advertising (and that was just experimenting with Google Adwords).

There are no gimmicks, just a lot of hard work and determination to provide the absolute best service to our clients.

#188th broker in US by sales volume
Wall Street Journal/Real Trends

Saturday, September 22, 2018

Fritz Frigan's Open House Report: light at the end of the tunnel!

Wow what a difference a week makes! We also had a very busy open house at 21 East 22nd Street #4c with 9 groups on Sunday and about the same for the weekday open house. I'm also happy to report our other listings have seen a 50%+ increase in inquiries and traffic.

Look at that open house on South Portland Street in Fort Greene, 80 people! This is what I talked about in a previous blog, two bedrooms under 1.5M in Brooklyn are on fire!

So it's quite the fragmented market; if you have a desirable unit and price correctly, you could see some 2015 style action. So far post Labor Day has been very busy for us on both the listing side and the buy side. We currently have a strong offer on one of our listings, the number of groups coming back for the second and third time on our other listings has also been very strong. Three recent signed contracts on the buy side and two accepted offers last week.

Initial signs point to it being a fairly active Fall with the bias favoring buyers.

Thank you Fritz for the open house reports!

'The numbers are in. Wow! What a change from last week. Can we say “The buyers are back!”? Well, at least by what happened this past weekend, yes the buyers came out in droves! We witnessed 39% spike in the attendance at open houses this past weekend. On average 4.20 per open house, compared to 3.02 the weekend before. And compare that to measly attendance in July and August when average attendance rarely crossed over 3. Amazing! Here is the dataset. Will it continue? Who knows. Keep on sending your data and we’ll see if the next weekend will continue with these numbers….. Let’s go into details:

We received numbers from some open houses that we have not seen in months. 80 parties came to open house in Brooklyn, hosted by Pascal Blacque-Belair of Elliman. And 42 parties were reported by Lisa Tregnaghi Garden of Halstead. I could not believe the numbers so I emailed them both. And they both confirmed. Lisa said “there were 42 parties, but total of 100 people+ at the open house”! Here is from Pascale: “Yes 80 is accurate. Have never seen this in 20 years. A 4th floor walk up to boot.”. Three open houses had 20+ attendees and 26 open houses had 10+ visitors

We received record number of entries – 285! The word is spreading, keep on encouraging your colleagues to participate. There were 50 open houses with zero traffic, which is 17.5% - there goes my theory that busy weekend is when zero open houses are 14% or less. Another important number: public open houses average was 4.54 – it is By Appointment Only open houses that brought the average down to 4.20. By Appointment Only Open Houses had just 1.80 attendance on average.

·        Manhattan – 29% increase in traffic overall from last week. 3.62 compared to 2.81 the weekend before. Very busy on Upper West Side, Washington Heights, East Village, Chelsea, Harlem, Flatiron (small sample). It was very slow in Midtown East and Midtown West. Upper East Side well below the average with 2.79.

·        Brooklyn – with strong 6.68 Brooklyn saw 36% increase in traffic from the week before. Very busy in Brooklyn Heights and Brooklyn Other Areas, the rest was below otherwise very strong average. We got 41 replies from Brooklyn – keep up the pace Brooklyn brokers!

·        Bronx – on average 5.25 it was much busier than the week before. We got 12 replies from our Bronx colleagues – we need more!

·        Queens – Queens saw 105% increase in traffic (but beware of small sample sizes). We received just 9 replies, the week before we had 10. Super busy at one open house in Forest Hills with 18 attendees. LIC was relatively slow, and other Queens areas were OK with 4.80 on average.

·        Size – The most traffic was at 2BR units (5.04) and at 3BR units (4.55). Also, very much in demand were Single-family houses and Multi-family houses with 7.50 and 6.00 averages respectively. But beware of small sample sizes. 4BR and 5BR units had the least amount of traffic.

·        Price – Most action in$1-$2M with 4.86, but strong showings at open houses below $1M. Above $3M just 2.36.

·        Condition – Interesting that “Excellent/Mint” condition commanded such premium over others: 4.83 on average in properties described as “Excellent/Mint”. Use it!!

·        First Open House – I cannot emphasize enough of importance of pricing your properties right as you bring them to the market. This past weekend First Open House commanded 319% premium in traffic vs. “old” open houses. 61 properties had their first open house, which supports idea that many agents were waiting for after Labor Day to start the marketing.

Some agents suggested I add “condop” as an ownership type. Condops are truly co-ops, just with transfer of ownership similar to condos, hence pretty good for investors. Let me know what you think – if I get many votes with “YES” to include “condops” as a separate category, I will do it.

I also received requests to include more sub-markets in Brooklyn and the Bronx. Let me know what you think. My concern is that more I divide the areas, less replies I get per each market – and the stats are no longer very reliable. But happy to do it, if I get decent amount of replies. “Prospect Heights” and “Fort Green” was mentioned for Brooklyn, “Inwood” for Manhattan and “South Bronx” in the Bronx.

34% or 97 responses came from agents and brokers outside Halstead. I think this is great news – spread the word! The goal is to get 10% participation from New York City open houses.

Best of luck at your open house next week!

Fritz Frigan'

Tuesday, September 11, 2018

New Listing! In Contract!

MOVE-IN READY In Contract! – FLATIRON LOFT! 1 Bedroom with Home Office/Nursery in a unique & modern doorman Pre-War Loft building.

Fully renovated and in excellent condition, this apartment features 11.5' ceilings and great light through its extra large windows. At approximately 1000 square feet this generously proportioned home is open and airy with a huge living area equipped with custom lighting, and separate dining area across from an open kitchen – which features custom cabinetry, double length drawers, Italian glass tiles and Bosch and Viking appliances. The 21' long master bedroom has a massive walk-in closet along with a built-in custom wood vanity cabinet for even more storage. The large home office with a full-size closet is currently used as a spacious nursery but can easily fit a queen bed – or convert to a large office/guestroom. There is extra hidden storage located above the front and home office closets. Simply said, there is room-to-roam in this spacious and inviting home in a fantastic building & location!