Our Quarterly Newsletter

I hope everyone is well and, as always, the first thing I would like to say is thank you! I like to keep these email updates brief and use newsletters as a medium of expedient yet genuine communication for clients both old and new.  I will also use this space to provide you with fresh perspectives and actionable insights pertaining to what we are experiencing in the current  real estate market. Last winter I included a link to some data points from UrbanDigs. Unfortunately, I believe this may have been more confusing than helpful as I may have failed to provide adequate context by not including a link to the more comprehensive report. For those ardent data aficionados and neophytes alike, I don't think there is a better site for mining data on the NYC real estate market than UD.

Our last email brief pointed out that we had experienced a slowdown in the market starting in August 2015. It was quite pronounced and difficult to identify or explain the root cause. However, 3 days after Easter Sunday, chaos erupted.

On March 29th, for no apparent reason, my phone and email activity went crazy! That week alone I received phone calls from nine new clients inquiring about our services, all of whom signed up, and of those, five now currently in contract.  We also heard from many of our previous clients that had been quiet during the preceding months and many of them are now in contract or actively looking. Since that one week in March, business has been booming . We currently have about twenty deals in contract and eighteen that have closed. Remember, we don't do any advertising, so please continue to honor us with your referrals, as they are the lifeline of The Burkardt Group and greatly appreciated!

I would not say that we are back to the market highs of 2014, but we are humming along quite nicely in a way reminiscent of  2015. Most offers below $2.5M eventually wind up in a call for 'best and highest'. Brooklyn remains very active; I think I could honestly say it can be harder to get a deal done there than in Manhattan. We have a few deals in contract that are in the range of $3M-$5M and we are definitely experiencing a bit less of the fierce competition we are seeing for homes priced sub-$2.5M. However, one caveat is that my generalizations mainly apply to homes in established neighborhoods with no major negative conditions. I recently watched a 410 F2 studio with a 500 F2 terrace trade in what would appear to be above $1.8M range. While this home had no real kitchen, it did have a prime location, and that appeared to be the salient quality. This was a bit disconcerting, as it reminded me of 2007, the precipice of the inevitable financial collapse, when irrational exuberance reigned supreme. Where does it go from there on the re-sale-- $2M?! Happily, this has been the exception, not the rule.

I watched the 'Big Short' last night. It was a pretty good flick that brought back some bad memories! During the time before the markets collapsed in 2008, I was interested in making some real estate purchases but was also reading some contrarian financial blogs while trying to juggle that against what I was hearing from a good friend and seasoned broker who literally told me (when I suggested perhaps it was a good time to watch and wait before buying another home) that he might be "priced out forever" if he waited. Well, this was enough for me to quit my firm and start the disruptive (before disruptive was a buzzword, that is) firm that I ended up christening 'The Burkhardt Group', advising folks to rent and offering them a discounted commission that was based on factors beyond rental price. It certainly appears that my little upstart company succeeded in filling a niche that was yearning to be utilized. It was not until around late 2009 that I began representing buyers and the model evolved to what it is today, with over $350M in sales.

To sum things up: the market appears to be healthy, certainly fueled by low rates, but still not what one would call easy money. If you're looking in Brooklyn, I think Ditmas Park, Sunset Park and Greenwood offer some opportunity for current value and future appreciation. Michelle Williams's purchase in Ditmas Park may finally give that 'hood the boost it needs to shine. Look what she did for Boerum Hill!

This market has been hot for a long time. Don't chase properties because of excessive pressure from multiple buyers, exercise constraint. Opportunity is available for those with patience. My favorite scenario is identifying homes that have been overpriced, sit and get 'stale'. The herd will stay clear, wondering what's wrong, even in this bull market. Catch the seller at the right time and you can make a deal.

We are planning to start listing homes for sale. We have an effective plan in place and I have recently begun speaking with sellers. Please feel free to call me to discuss what we can offer you. If you have a home with no material negatives, then correct pricing is 80% of making it happen.

I hope you all have a wonderful 4th of July! One day we'll throw a big party and invite ya'll!

Best,

Keith Burkhardt

917.770.4951

The Burkhardt Group

We Pride Ourselves on Rational Analysis and Non-Attachment

The market is hot again and with that comes buyers that are running a bit hot themselves. If you want a broker that will simply tell you to 'bid more'...you've come to the wrong place. That said I certainly understand irrational behavior, especially if you have the bank to make your dreams come true. When it comes to real estate I tend to be a bit conservative although I certainly understand that the current market may demand a premium to get a deal done. It is my job to try and understand what is a rational premium to pay for an apartment that tugs at your heart strings.

However it is not my job to bully you into paying an exorbitant amount of money for a home, beyond a rational premium. If you wish to, by all means go ahead and swing for the fences just so you can win that 'highest and best', we leave that decision up to you. As I always say to new clients, we are not sales people, we are trying to bring something new to the process. Not just flashier websites, Vows or apps that make it easier for you to contact us or search for listings. We don't have a fancy office with free espresso, bottled water and a fancy address.  We want to add real value to the process with the willingness to rebate a portion of the commission to make a deal work. Some are puzzled by this notion, even think it is wrong?? Some agents give a portion of their commission to their broker, we have a model that allows us to give a portion back to our client. The great news about this, clients trust us implicitly and with a rebate we get deals done that otherwise would have crashed and burned. And the really great thing, it didn't cost the seller or the listing agent a dime. No more than any other deal with a buy-side broker involved.

Yes, that makes us attractive to some. Especially when it is coupled with 100% transparent service and our best efforts to provide an honest evaluation of the subject property. The concept of my business model did not just pop into my head. I simply paid attention and asked questions of my clients. I read with interest the absolute venom some spilled into the Streeteasy threads about brokers and agents. I asked myself, "Can I come up with a model for these people?" It took a bit of research to make sure it was legal (yes it is) I spoke to a few attorneys at the AG's office (they called me. Wanted to make sure no one was interfering with me; meaning other agents or firms). And did a lot of trial and error with various systems to come up with a platform that worked.

So here we are 8+ years later, 100's of millions in sales completed and a boat load of very happy clients.

All the best!

Keith Burkhardt
917.770.4951

Happy Father's Day!!

Some of my wonderful family!

And Just Like That We're Off To The Races!

As written here previously and backed up by data, the market took a breather from approximately August 2015 until Easter 2016. Agents were tracking me down to ask if my clients were going to be making an offer, 'They seemed to love it, asked a lot of questions'. Just for the record, that usually is a clients polite way of saying I don't care for this property. When a buyer actually does love a space, it's poker face time! (As told to me my dozens of clients!)

So what happened? I have no idea, however days after Easter my phone and email both went a bit nuts! Both with new clients as well as previous clients that were back on the prowl. To date we have signed 14 or 15 contracts since that time, have a few accepted offers that are days from signing and continue to be busy with current, active clients.

The market is far from what we experienced in 2014, however well priced homes in prime/good locations are attracting multiple bids above ask (in most cases). What we really have is a healthy, liquid market. But if you're a seller, don't get greedy, buyers aren't dummies and your agent isn't a magician. Price a home correctly and the marketplace will take care of the rest. Brokers and agents are more akin to conductors, certainly an important function to the process. However they are not playing the music, just orchestrating it.

The past few months we witnessed a great release of energy. Will it continue? I think so, though a bit muted. I'm sensing a wee bit of cooling in our little world, time will tell.

Best,

Keith
The Burkhardt Group
917.770.4951

Choose Your Attorney Carefully!

Wow, this could become a series! "Choose your blank carefully". Once you have an accepted offer on a property the two most important people involved will be your banker and attorney. I have already covered the banker part, so here are a few words on what to look for in an attorney.

I think it's a good idea to have an attorney that has a solid team back in his/her office that are available to handle any last minute surprises. Many real estate attorneys are one person shows and much of their time is spent out of the office reading board minutes or in closings. It is especially important that they have a qualified person(s) back at the shop to handle things. For this reason I prefer a shop that has at least one additional attorney on board as well as additional supporting staff.

For the most part residential real estate transactions are pretty straight forward in NYC. However stuff can get a bit hairy and also be time sensitive, especially in a multi-offer situation. You don't want your attorney MIA for an extended period of time when the tomato hits the fan. For this reason a law firm with a few attorneys on board as well as a supporting cast of characters can be a very good idea. 

This advice is not absolute however something to consider when making this very important decision on legal representation. We feel having a solid team is critical in achieving optimal results. Everyone is important; your real estate broker/agent, banker and attorney to ensure a successful transaction. This is not rocket science, however there is a method to the madness that is buying/selling NYC real estate.

Next: Choose your broker/agent carefully!

Best,

Keith Burkhardt

917.770.4951

Choose Your Banker Carefully!

When The Burkhardt Group was conceived there were some initial ideas of how we would work and what we would offer. Most of these ideas came directly from my experience with clients or from reading the Streeteasy boards. One prominent and recurring bit of advice was 'never take a referral from your agent/broker'. And for the first year or two I did not offer clients any sort of referral for vendors.

That all changed as clients continued to bring poor performing service providers to the table, especially bankers and attorneys. These happen to be the two most important people in the transaction post contract being signed. Many 'bankers' or mortgage people are nothing more than sales people and application takers. You need a banker that understands the entire process and most importantly understands the underwriting process (that is where the fun starts!)

One of the first tells that a banker may be a mediocre performer is when he/she starts asking me for information about the building straight out of the gate! It's sort of like me asking the banker to to run a comps report. Any banker worth their salt knows that questions on the co-op or condo need to be directed to the managing agent. When the first time I hear from them is to ask me to get information from the managing agent; I know we are in trouble :) One consistently great banker is David Axelrod at BofA. I never hear from this guy until we get an email that they have the commitment letter. Then the next time is to tell me we are clear to close.

I know a lot of you out there thinks brokers stink or don't really work. And although this is not rocket science, I can tell you I am usually working until I go to bed. There are a lot of moving pieces in a co-op/condo deal, especially when you have 15 deals in contract and about 40 active buyers to manage. The last thing I want to do is the bankers job! If you don't know to call the managing agent to ask for the budget or a copy of the master insurance policy, you are either lazy or clueless or both! Lol.

So please make sure that you get a referral for your bankers from someone (you trust) that has used them before and had an excellent experience. Never just call your bank and tell them you are looking for a mortgage banker (even if you have private banking). I have a handful of bankers and we have worked with a few for many years and completed deals with all of them. One added perk using our referrals; they will go the extra mile for you to make sure that I am happy. They want our referrals and of course we accept nothing from any vendor we refer.

I'll write about the importance of lawyers and what to look out for in another post.

Best,

Keith
917.770.4951

Just When We Thought Things Were Slowing Down...

Last August we sent out a note to our clients that we were seeing signs that the winds might be shifting. We were sensing a softening in the market, something we had not seen in the previous 2 years; 2014 being a blow-out year for sellers! We continued to pay attention post Labor Day and the trend continued through December. The real test would be to see where things were around the second week of January and the trend continued to be our friend, we liked that!

The two weeks previous to Easter were slow, I mean really slow! I took a two day holiday with my kids two weekends ago, thinking this is a good time to be away, its dead! That Sunday night my phone and email blew up-5 new client calls, more new client calls that week. Suddenly we are swamped, submit 5 offers and all of a sudden it's calls for 'highest and best' on all but 2 of them. We had not seen 'highest and best' in months! I spoke to a client on Friday who confirmed what we were experiencing (he just came back post Easter, Spring break and just won a highest and best yesterday). He was seeing the same uptick in the activity levels of homes he was following on Streeteasy.

We are not saying the bull is back however we are watching closely. My feeling is that things will continue to 'normalize' and the surge over the last two weeks was more about pent up, post holiday demand (and a handful of attractive properties coming on line) than a 2014 style sellers market. At least that is what we are hoping for!

Keith Burkhardt
The Burkhardt Group
917.770.4951