Westchester View

Scarsdale NY housing has been in the cross hairs of the housing recession for a while now.  Initially,  it was resistant to the correction taking place in other parts of the country.  Eventually the forces that had hit other parts of the country so dramatically, came home to roost even in the most resilient areas of Westchester.  Real estate values in Scarsdale NY came under prssure as inventories swelled.  The drop was severe. However, some of the numbers show  signs of  a bottom being at hand.

Cooperatives:

The number of co-ops sold are  down 15% over the previous year.   This is a trend that has been seen in other parts of the county and reflects the difficulties in obtaining financing.   Currently there is a nearly 8 month inventory on the market. However, prices remain slightly higher than the previous year, (5.4%) indicating a market that is stabilizing.   There are some mixed signals here.  the inventory is still high however, the pricing is surprisingly robust.

Single Family  Homes – Scarsdale:

After a “pop” during the 2nd quarter prices have once again fallen and are down 27% over the 3rd quarter of 2008.   Swollen inventories are going down.  Right now inventories are approaching th 6 month mark.
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In surfing the net, I discovered an on-line version of an article by Ben Brody and Laura Gurfein that appeared in last months Westchester Magazine about the county’s “top” Realtors. The subtitle declared “In good times or bad, whether buying or selling, these are the agents you want on your side.”

Now, I have nothing against the Realtors who were chosen  as the finest agents in Westchester NY real estate. None at all.    it was fascinating to see how the authors chose to define “success.”  They used a simple unbiased metric  – the bottom line.  They defined success in terms of .sales volume in dollars.  The theory being – the bigger the sales volume the better the “track record.”  This kind of boggles my tiny mind.  In a twisted way it reflects the public antipathy to Realtors in general because it emphasizes that “success” is defined in dollar signs.

This got me thinking – how exactly should one define success in real estate?  How should these bottom line numbers like sales production and number of listings held factor into a home owners decision about who to sign a listing contract with?

Well, realistically, an agent has to achieve two goals.  Certainly, over time, the agent must be able to turn a profit or they will go out of business.  This is much harder to do than most people outside our industry think.  I have to make a living this way and turning a profit is absolutely essential or my bills don’t get paid.  But for all the delusions of real estate agents being “rich” without any effort, the failure rate is enormously high – north of 80% in most of the country (over 90% locally.)  So posting sales volume  is a major component of success.

But, what does this do for the client? The home seller or home buyer?  The article indicated that whether selling or buying – these agents were the best.  But by looking at sales volume only, the article missed the mark altogether.

1. Is this agent primarily a listing agent or a buyer’s agent?  If they have an even number of sales in both categories – fine.  But I looked at the sales history of a couple of these superstars. They were primarily listing agents and did relatively few sales as a buyer’s agent.

2. On the listing side, what is their success rate?  After all, an agent can make a bundle listing in volume. The percent of listings that actually sell is another matter.To that end I took a look a closer look at a “top agents” sales record for 2009.   I picked an agent on the list at random and found the following.

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Part 1 of “This Brokerage Has 750 Listings…..So they must be the best! ” was prompted by the fact that the Westchester NY real estate market had changed and as a result,  I was getting more and more questions about what a brokerage brought to the table in terms of marketing.   I emphasized the importance of choosing the right agent and that the brokerage itself was of less importance.    I also indicated that there was a lot of smoke and mirrors  regarding  brokerage brands and what that means to the seller in terms of marketing the home.  Also, for those consumers who would like to see broker/agent input on Part 1 of this post…you can go to my blog on ActiveRain where I re-posted the blog.  It got a good deal of attention and much commentary from real estate professionals.

In the end, I  promised a sequel  that got into more specifics.  So here it is – six  major myths about  listing a  property and marketing a property that are often trumpeted by our own industry.  Its been said that if you repeat something often enough it becomes “fact” in the eyes of the consumer.  So let’s put some of these “facts” to rest.

Myth #1 – “We have  12 billion to the 10th power  active listings, so  our reputation speaks for itself!”

Really?  How on earth does anyone come to that conclusion?  You can have all the listings in the world, but if you can’t sell them, what’s the point?   The percentage of sold listings is a bit  more pertinant. However, even that number does not discriminate between individual agent performance.

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Does size really matter?  Do the number of listings or the size of the brokerage have anything to do with the ability of the agent to market and sell a home successfully? Is it the brokerage or the agent that is the determining factor?

What Does the Brokerage Bring to the Table?

With the Westchester NY real estate market in a downward trajectory,  sellers realize that they need more than a sign in the ground to move their property.  In truth, this was always the case, but these days I’m getting more and more questions about marketing the listing. One of the biggest issues  I encounter on listing presentations  are questions regarding the brokerage itself.   Most questions revolve around marketing.  What does the brokerage do in terms of marketing  for the listing?

I think that most sellers assume that since the brokerage is “big” and has capital behind it, that they are the ones spending  big bucks on marketing the home.  But this is rarely the case.   Many big-box national brokerages build on that confusion and perpetuate the myth that their brokerage “brand” makes a significant difference in selling a home for top dollar.  They also tout their “marketing package” in terms of the amount of support they offer.  Some actually stress that the number of agents in the brokerage somehow makes that brokerage better or somehow more able to move the property.   With all the hype and misinformation out there it is small wonder that sellers are confused.

I  would challenge these large brokerages who claim that their numbers speak for themselves  to enumerate exactly WHAT  they do to justify their claims?  And while they are at it, I would like to have some hard numbers to back up their success stories.  I haven’t seen any of them come up with any marketing advantage that holds up under scrutiny.  Most of the time they appear to be blowing smoke.  Don’t get me wrong, I’m not slamming big brokerages. That would be rather foolish since the brokerage that I am currently associated with is quite large.  What I am trying to do is cut through the hype.
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One of the many issues confronting  first time buyers and  those who want to “downsize” is that many crave having an outdoor space.   Cooperative life isn’t always conducive to having outdoor space, but the coops on Garth Rd. are an exception.  The park that runs behind the Bronx River Parkway side of Garth Rd. creates a wonderful “back yard” for the residents.   For those who crave outdoor space and easy to footpaths.  The area, called the Garth Woods Conservatory offers a quiet oasis from the usual street and village traffic and appears to be popular with many of the residents.  I took advantage of some extra time I had and took a short walk along the Conservatory with my dog Jade.  We ran into several canine friends along the way as well as several people who were happy to meet my dog…I wasn’t nearly so interesting.

As can be seen from the photos – many who live along the Garth Woods Conservatory have a birds eye view of the woods – with gardens or terraces having a view of the woods.

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This post was initially published on Active Rain about a year ago. It was during the election cycle so the parallels to our political system make more sense. I have modified it somewhat for this blog. My reason for reposting is simple: Many buyers and sellers seem to fall for the smooth-as-silk , extremely slick salesperson. Many of whom promise to help buyers “steal” a home and sellers sell for a price that hasn’t been seen since 2006. I tend to not work with scripts. I don’t like being scripted to – so I try not to script to others. So here is the post. Enjoy the clip at the end – its interesting nearly a year later as an example of how scripting devoid of understanding or true content can be dangerous to the “scripter” as well as the “scriptee. “

OK, so this idea was stolen from Jennifer Allen and Karen Rice. I only lift ideas from the very best! When I do, at least I’m honest about it! Recently Jennifer wrote about how she felt after she had been pitched to with a script. Karen Rice later described going to a “free” REALTOR.com technology tools seminar. She may have gotten a free meal, but she paid for it with a long hard sales pitch that went on endlessly and offered little of practical value.

For the most part, I readily agree – most of us like to feel that we are too important for a script or “pat” dialogue. Personally, I hate scripts, and haven’t used them. However, my down-to-earth approach comes at a price. I’m not SMOOTH. Don’t get me wrong, I’m not sloppy, but I’m not as polished as a scripted agent because mine is generally an honest response to an honest question. To be smooth – most of us need scripts. That lack of smoothness, answering questions honestly as they are presented can create a feeling of roughness, less polish – the opposite of slick. In many cases it won’t fly. Many audiences are so used to being scripted, they won’t tolerate anything so direct. In some ways, they need to be “sold.”

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It may be the dead of winter, but a buyer’s housing market is in full bloom in Scarsdale. Some sales statistics point to one of the best buyers markets for single family homes than has been seen in a very long time.

Cooperatives:

Coops in the coveted Scarsdale zip code (10583) showed less stress than single family homes. They were one of the bright spots in an otherwise grim quarter. Prices were down a mere 4.6% over the previous year – with an average sales price of $251,000 for the 4th quarter. There was a mild (perhaps insignificant) average price increase of $13,000 from the previous quarter. The number of units sold in 2008 was not significantly different from the 2007 numbers. But there has been a significant inventory increase of 8.4 months reflecting the season and the general weakness in the New York market.

It should be noted that for cooperatives I use the Scarsdale post office and not the municipality for these statistics. This reflects the way buyers tend to shop of for cooperatives. Buyers shop in terms location not municipality.
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Westchester has been resistant to price decreases since 2005:

Until recently, the Westchester real estate market has been very resistant to the housing recession that has been headline news in many parts of the country. Don’t get me wrong, there were signs that the market was far softer. But average and median sales prices had held up and even increased since 2005 when the housing recession began.

Westchester prices are heavily influenced by its unique location:

Reasons for the resilience are many – but I will mention the most obvious one. There is this old saying: Real estate is location, location, LOCATION. Okay – I know its a cliche – but in this case it happens to be true. The primary reason Lower Westchester has remained on solid footing is its location. From most points, mid-town Manhattan is a 40 minute commute or less. The train ride is convenient and comfortable. That is a HUGE perk and people are willing to trade real money up-front in exchange for more family time, less wear and tear on their cars and gasoline. Ask anyone who has experienced the grinding commutes north and west of lower Westchester and they will tell you more than you ever wanted to know about how a long commute saps your strength, your wallet and family time. Although some of the stats ahead are not looking too pretty, this fact should be uppermost in everyone’s mind for when the market recovers – which it will.

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In my previous blog on choosing a listing agent, I explained why agents sell homes – not brokerages. If that’s the case, then the issue uppermost in most seller’s minds should be:

How do I choose a good listing agent?

How do you find an agent who is worth their weight in gold rather than straw?

Here are some tips on what to look for and what to avoid:

What to avoid in a real estate agent:

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In these difficult and challenging times, it is very difficult for the potential seller to cut through all the “noise” and “hype” about listing agents and what individual brokerages bring to the table. In an industry that desperately needs more transparency, there is probably more hocus pocus floating around than ever before. Tales about how agent “X” can sell your home for more than agent “Y” in less time abound and have become the stuff of legend. Apparently agent “X” has that secret potion that moves homes – and what’s more, he’s got the sales figures to prove it! Big box brokerages also make the same claim. “Our Rumpelstiltskin marketing plan will attract buyers willing to pony up pure gold for your house made of straw!” In truth, like most fairy tales, these claims usually don’t amount to much.

First and foremost – AGENTS sell homes – brokerages don’t. With a few notable exceptions, most brokerages spend shockingly little money marketing a seller’s home. I’ve seen situations where brokerages will spend about 0.1% of the list price. That’s about $500 for a $500,000 home. If the home lingers on the market – and the advertising money is used up – that’s just too bad. The rest is left up to the individual agent who is unlikely to have very deep pockets in this current market.

True, many brokerages have spent hundreds of thousands for very fancy web sites brimming with eye candy and tons of nooks and crannies for buyers and sellers to explore. They try to blow sellers away with the fanciness of it all. As in the story of Snow White – there is a lot of smoke and mirrors to this tale. Bottom line – these sites are designed to do two things: Convince sellers to list and buyers to call.
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