The wild, wild west of New York City real estate
Everyone knows New York City marches to the beat of its own drum, and because of the fabric of how the real estate industry works in the city, it is very much the wild west of real estate, an anomaly to how the rest of the real estate sector functions in America.
Anthony Lolli is the CEO of Rapid Realty, a decade old real estate firm which became a franchise nearly three years go. Since franchising, they’ve grown from one location to 50, with 800 agents.
How NYC real estate is different
There has not been widespread adoption of a single MLS for all boroughs in the city, so the very fabric of real estate is different than in other American cities. Add to that the vacancy rates are extremely low and finding a quality home to rent or buy is a challenge, and you’ve got the wild west where real estate is almost a sport amongst consumers and brokers.
In an effort to enlighten the rest of us that live in traditional real estate cities, Lolli has shared seven ways in which NYC real estate is different, particularly with rentals, as the city has seen a rapid rise in demand for rentals.
1. How broker fees are paid
Lolli told AGBeat that in NYC, “clients (tenants) are expected to pay the broker fee when they rent an apartment or commercial space. There is such a high demand for apartments, and there are so many people renting, that landlords often feel they don’t ‘need’ to pay the fee in order to rent their space. In almost all other states the owner pays the fee to the broker to get their space rented.”
2. Brokers pay to list
“Not only is NYC the only city where the tenant pays a fee, it’s also the only place in America where the brokers have to pay for housing posts on craigslist, the most popular go-to website for anyone looking to rent an apartment or commercial space,” said Lolli.
3. A different pace
Another factor that separates NYC from other cities is the pace. Lolli said, “Renting in NYC is extremely fast paced compared to most other places. If you see an apartment you like, you have to snap it up immediately. Oftentimes when clients decide they need more time to decide if an apartment they just saw is right for them, by the time they come back on, two, or three days later, the apartment is usually not still available.”
Lolli added that “In NYC, it is almost impossible to look for a place more than four weeks before your move-in date. If you need a place for May 1st, you start looking in the beginning of April. There is such a high volume of renters, the landlord knows that he will always find someone looking to move into his apartment immediately and as a result will not voluntarily keep it off the market. In most other states renters are able to start their search two or even three months before they plan to move.”
4. What consumers get for the money
Lolli said, “Apartments and commercial spaces are much more expensive in NYC. For the amount of money you spend on rent, the square footage is much, much less than what you can expect to find elsewhere.”
5. How consumers search
Lolli says that NYC is “unique” in how renters search for their next apartment. “Clients may come to us asking to live in Brooklyn, and end up in an apartment in Queens. Websites like walkscore.com come in to play because people pick where to live based on ease of transport – the proximity to subways stations, laundromats, grocery stores and other amenities.
Generally, the most popular NY neighborhoods are ones that have grown as a result of their being near to a major transport hub. Most New Yorker’s don’t drive. In most other states neighbourhoods vary so dramatically, and are farther apart, so it is unusual for renters to be willing to focus their search on more than one area.”
6. Landlords are unusual
“New York landlords are unusual in that they are accustomed to, and even expect, a very high turnover rate,” said Lolli. “Many apartments are rented out for one year at a time, people move very frequently. This constant turnover allows landlords to raise rents often in-between occupancies. Landlords are also used to a hugely varied tenant-base. One year they rent their 2bedroom apartment to a couple, the next year to room-mates, the next to a single person with a dog, etc.”
7. Tougher to rent without a broker
Lolli said, “It is noticeably harder in NYC to rent an apartment without the help of a broker. The city is vast, and landlords have many requirements that renters aren’t always accustomed to – paperwork typically includes a professionally run credit and background checks, bank statements, letters of employment, paycheck stubs, tax information, previous rent receipts etc. Landlords are used to expecting this type of paperwork and it becomes a task that can be quite intimidating for the renter to do alone!”
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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