PERSON OF THE WEEK: As Ol' Blue Eyes once crooned about New York City, if you can make it there, you can make it anywhere. But making it in the ‘city that never sleeps’ – especially in its extensive residential real estate market during a prolonged period of economic uncertainty – requires more than generous dollops of good luck.
This week, MortgageOrb speaks with Gabe Leibowitz, president of Skygroup Realty, about the distinctive challenges facing New York City's residential real estate market and the professionals that work in this distinctive location.
Q: In your opinion, what is the overall state of today's residential real estate market in New York City? And how has the city fared during the housing crisis that has impacted the rest of the country?
Leibowitz: The rental market is booming. Vacancy rates are exceptionally low, particularly north of the Financial District, and concessions are essentially non-existent outside of a few pockets of high-rise buildings. Even the cold season, which generally begins around November, has been more active.
As for the sales market, it's still (generally) a bit down from its 2007 peak, but the waves of fear that gripped the city in 2009 and large parts of 2010 have subsided. Prices haven't fully rebounded, but they were never cataclysmically affected like the rest of the country anyway, and consumer confidence is growing. Open houses are seeing much more traffic than even a year ago, and if a buyer likes a property, they're not tossing out the ‘the economy is awful, so I'm going to lowball’ line anymore. They're being aggressive, and that's sparking things.
Manhattan took a blow to the solar plexus when Lehman crashed – but while it staggered, it never fell. This can be attributed to the fact that the disproportionately large amount of co-ops and high prices in the city kept people who had no business buying homes from doing so, so the foreclosure situation is remarkably low.
And secondly, New York remains a destination like few other places. People with money want to spend it here. Even if the economy stumbles again in the near future, I don't expect prices in the residential market to ever really tank.
Q: The New York real estate market is a fairly intensive place to work. As a business owner, what are the challenges of differentiating yourself from an aggressive level of competition?
Leibowitz: The number one answer is the quality of the product. We're the exclusive broker for over 35 rental buildings in Manhattan and Brooklyn, including a particularly terrific portfolio that's mostly high-end loft buildings in Tribeca and the Financial District. Our exclusives keep interest in our company high, and that leads to clients for other properties – and the number of properties that we handle is growing monthly.
Secondly, we have an impeccable reputation for ethics. Brokers in New York are renowned for being slimy and pushy. I don't tolerate that. I take great pride in making sure everyone who signs a lease or purchases a property through us is fully satisfied with their experience. Believe it or not, that's a dishearteningly rare trait in New York real estate!
Q: New York's real estate market is also famous for its colorful and legendary neighborhoods. In your opinion, what are the hot neighborhoods for 2012, and what makes them stand out?
Leibowitz: I'll always be partial to Tribeca, which has become a mecca for families over the past five to 10 years: It has a great school zone, architecture, restaurants and convenience that makes it a terrific destination.
Park Slope is filling a somewhat similar role in Brooklyn for the same reasons. As far as up-and-coming areas, Clinton Hill is becoming more of an extension of Fort Greene – both are in Brooklyn – and Manhattan's Lower East Side still has a lot of untapped potential.
Q: For many people, landing a job in New York represents the highest professional achievement. What professional advice can you offer to someone who is seeking a career in the New York real estate market?
Leibowitz: Don't go into it expecting to make a killing by opening a few doors. The biggest mistake people make after passing their real estate exam is thinking that it's easy money.
The hard reality is that while yes, anyone can get lucky and close a few quick deals, sustainable success is built up over an extended period of time. You need to learn the ins and outs of areas and buildings so you're better able to match a client to the right apartment, and you need to build your list of contacts and referrals.
I always tell new hires that they must have sufficient reserves in the bank to handle several months without income: You need to be prepared to learn. The rewards come later. But those rewards can be terrific, and it's an incredibly satisfying field. Finding someone the home of their dreams is a great feeling.