Real estate is a unique investment

By Diane M. Ramirez

In today’s market, we field a tremendous amount of phone calls from the media inquiring about the effects that the financial markets will have on the real estate market. It is imperative that I share my response: it is far too early to tell what the implications will be on real estate in New York City. Many tried this when the credit crisis began over a year ago, and have consistently been wrong. What I can and will do is to provide real facts.

The demise of companies that have been “rocks” in the financial industry for decades is turning our world upside down, in ways we could not ever fathom just a short year ago. There is no doubt we are in very uncertain times. I was asked to give my thoughts on the current state of the residential real estate market but our local market is in juxtaposition.

The New York City real estate market is faring better than the nation right now and the most recent numbers show that our unemployment rate is at a historically low level. While jobs have been lost recently, it is far too early to predict how many the final toll will be at the end of this year. Most importantly, our local market is still moving – new deals are happening and bidding wars are occurring for well-priced properties. People will always have real estate needs as there will continue to be births, deaths, marriages, divorces – buyers will buy and sellers will sell. Real estate is not like purchasing stock – real estate is a unique investment.

The numbers reported in Halstead’s recent market reports for the first half of 2008 showed that our market is stable and holding steady when compared with last year. Currently, our third quarter numbers have dropped slightly; but, to no great surprise as 2007 was a record year. We all knew that we could not sustain the numbers generated in 2007, which was an unprecedented record year in our local real estate market. Our residential market has been hesitant and uncertain since the fall of 2007. However, Halstead Property is holding steady with current numbers still higher than 2006, which was also a very good year in real estate.

We have been saying for years that this real estate market could not continue at its record pace. We are still surprised though because none of us really wanted to believe it would not continue. I also think 2006 was a great real estate year as well. Our numbers are showing that we are moving towards the 2006 numbers, which - in and of itself - should not make anyone unhappy. Unfortunately, that is where the juxtaposition of our numbers and the normal analysis ends. We have outside forces occurring on a nearly daily basis, which throws all of the normal market predictors out the window.

Just as there is cause and effect in life – everything that has been happening, and will continue to happen for the foreseeable future, had a cause. Everyone from real estate to the financial sector to the government is trying to determine the short and long term effects.

I would like to share the advice I gave to agents at Halstead Property (and we currently have more than 600 agents). Let’s Get Real. During this new reality, it is imperative to be forward-thinking; and, at the same time, go back to basics. Agents must remain as strong business people with solid business plans encouraged with the knowledge that life goes on; and, people will have real estate needs – there will continue to be births, deaths, marriages, divorces – buyers will buy and sellers will sell.

Our Real Estate Market is an attractive option to many diverse people; and - now let me share some facts that will not make headlines; because, they are not sensational enough – BUT are still true statements:

  • The anticipated job loss numbers in New York City of 60,000 are tragic and of great concern but it’s important to keep it in perspective. In the last two recessions, the City lost a considerable number of jobs that were in the 200,000-300,000 range.
  • The New York City market requires much higher equity in our residential purchases than the national average which will bode well for the owners to be able to keep their homes.
  • New York City is an international city with many pools of buyers; and, foreign buyers are just one of the many in our pool of diverse buyers. Our area is still a magnet in which to live, own and invest.
  • Our inventory is healthy; and, in most markets, will remain stable. For example, we have an approximate 10 month supply of inventory but to put this in perspective, in the early 90s, we had an inventory that was 3-4 years.
  • We all know the demand was too great in the recent past and many buyers were forced to stand on the sidelines. That demand is still there but buyers have time on their hands to visit more potential homes and determine the “best value” for them.
  • Wall Street bonuses have an impact on our real estate market but they do not drive our market. We had a record year for Wall Street bonuses in 2006, and in 2007, we also had a strong year. It’s important to look back historically and remember that the real estate market remained strong when the bonuses were lower than normal.

In these uncertain times, it is crucial to work with a real estate company that is forward-thinking and has a solid foundation. Halstead Property provides this innovative thinking with a strong core base of more than 600 talented and experienced agents. We offer valuable economic information such as market insights, monthly updates called ‘The Heym Report’ from our own Chief Economist and our quarterly market reports. Sellers are prepared for the current market with our knowledgeable agents who offer unparalleled advice on pricing and marketing strategies. Working closely with our buyers, we identify purchasing opportunities and help them navigate through the buying process. I am proud of all that we offer our clients and customers and I invite you to learn more about our firm and our incredible agents at Halstead.com.

When this firm was started by Clark Halstead and me, we had a vision that our company would be a service-driven company with the latest technology in order to provide our agents with the tools and resources that they needed. Nearly twenty-five years later, that vision is still upheld through our twelve offices, our agents and our stellar Executive Team. Throughout our history, we have experienced a wide range of markets and each time, we kept a calm presence and continued to do our business in the best possible way. I encourage you to listen to the real facts and allow Halstead Property to provide you with them.

Diane M. Ramirez is President of Halstead Property (dramirez@halstead.com)

©2008 NEOCORP MEDIA

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