I ran across this site Walken 2008 – Official Website and then someone confirmed it was [actually a hoax](http://thetechnologist.blogspot.com/2005/08/christopher-walken-2008-is-hoax.html).
But it had an insightful quote about housing:
If you want to learn to build a house, build a house.
Don’t ask anybody, just build a house.
Huh?
An of course, [More Cowbell! [Washington Post]](http://www.washingtonpost.com/wp-dyn/articles/A46074-2005Jan28.html)
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On Friday night, Michael Shvo was profiled in [The Real Estate Assassin of New York City [ABC News Nightline]](http://www.abcnews.go.com/Nightline/story?id=1601227&page=1) with the tag line Michael Shvo Became the Most Successful Broker in the Big Apple – and Generated a Flood of Controversy Along the Way
Lets Shvo
Shvo’s marketing slogan, has become a verb associated with real estate but cannot be said without sarcasm by many in the real estate community.
In a high density housing market like Manhattan, the competition is fierce and quite often, contrarian marketers will float to the top. This is no guarantee that they will be successful in the long run. Here were or are some of the best:
There have been and are many other successful real estate marketers in Manhattan and now there is [Michael Shvo](http://www.shvo.com/). He has made many enemies with his brashness. With three blackberries and two cell phones, love or hate him, the man can sell.
Our first-hand impression_
However, my appraisal firm was assigned to appraise a unit in one of the projects he is currently marketing. The sales representative was unbelievably rude and abrasive…over – the – top. The Shvo agent was not busy yet seemed to thrive on this type of behavior and would _not show my appraiser the unit even though we had made an appointment well in advance. During this interaction, a potential buyer came in who was trying to get information and the sales staff would not help him. The potential buyer eventually gave up. My appraiser finally had to find a construction foreman who provided access to the unit.
To be fair, this was the first and only time that we have inspected this particular project, although I suspect we will be returning soon as the units that are sold get set to close. Hopefully this incident could be the fault of a few poorly trained agents, but thats the rub. The brashness of Shvo doesn’t allow him to be given slack by the real estate community. And to his own admission, he could care less about what anyone thinks. Perhaps thats the key to his success as a salesman.
In a market with limited supply, rapid marketing times and eager buyers, this type of behavior probably doesn’t really matter. Many brokers were order takers until recently. As we enter a market where there is more balance between supply and demand and new developments are the primary source of new supply, I have my doubts about the long-term staying power of in your face selling.
Tags: Michael Shvo, Barbara Corcoran, Corcoran
In the AP article Trump sues writer, publisher for allegedly understating wealth
Donald Trump has filed a multibillion dollar lawsuit against the author and publisher of “TrumpNation: The Art of Being The Donald,” claiming the book knowingly understated the celebrity businessman’s wealth.
“The thrust of the book is that Trump is an unskilled and dissembling businessman,” the complaint states. At an event promoting his book at a Manhattan store in November, the lawsuit says O’Brien called Trump a “train wreck” of a businessman and “the walking embodiment of financial pornography.”
The book claims his net worth is between $150 million and $250 million. Trump’s suit suggests his fortune is closer to $2.7 billion. [The lawsuit is for $5 billion or nearly twice his net worth today [The Independent]](http://news.independent.co.uk/world/americas/article340824.ece).
This is all smells of a PR ploy of which he is the master. How can Trump prove the writer wrong unless he fully discloses his financial statements? Isn’t this a classic “my word/his word”? We can only hope he runs for President to get to the bottom of this.
Tags: Donald Trump, Tim O'Brien
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New York City Mayor Michael Bloomberg on Friday said the real estate market was slowing “dramatically” and only a “miracle” could stop soaring [mortgage rates from eating into housing prices [Reuters].](http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-01-20T181337Z_01_N20342890_RTRUKOC_0_US-ECONOMY-NEWYORKCITY.xml&archived=False)
The real estate market is slowing down dramatically and we’re going to have a problem down the road,” Bloomberg said.
“If people who want to sell their houses have to wait a longer time before someone comes along and buys it, it would be a miracle if prices didn’t start to go down,” he said.
The Reuters story referred to the [report [pdf]](https://www.millersamuel.com/reports/pdf-reports/PDE4Q05.pdf) I prepare for Prudential Douglas Elliman so perhaps he was referring to the sharp drop in the number of sales we saw in the fourth quarter. He said that if people have to wait longer to sell their properties, then price levels will weaken.
From a macro perspective, it seems like he is going out on a limb in [his characterization [Inman]](http://www.inman.com/blogger/2006/01/everyone-is-expert-real-estate-market.aspx), especially given his business experiences with the sensitivity of the financial markets. A statement like this could cause many in the real estate market pause and wonder what else does he see? He refers to “soaring” mortgage rates but the Fed is signaling it is near the end of its “measured increase” strategy on short term rates and long term rates have been falling since November.
From a political perspective, the city is running a large surplus ($3B) coming in part from the taxes paid by the housing sector and one could speculate he is positioning himself in the next fiscal year to lower the expectations of those who would like to spend it.
Now that the [MTA transit union fell 7 votes short of ratification [NY Post]](http://www.nypost.com/news/regionalnews/61912.htm) of the agreement hammered out by the union leaders and the city, it will be more difficult to take a hard fiscal stance with that kind of surplus.
Other local and state governments seem to be wary of housing’s impact as well: [Housing Slowdown: Impact on State Government [Calculated Risk]](http://calculatedrisk.blogspot.com/2006/01/housing-slowdown-impact-on-state.html)
[Experts say funding depends on strong real estate market [SF Chron]](http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/01/16/BAGLNGNUFH1.DTL)
[Late taxes hint at housing’s toll [OC Register]](http://www.ocregister.com/ocregister/money/homepage/article_949773.php)
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Often one of the problems with national or local housing statistics, as diseminated in press releases from real estate trade groups and companies, and the media, is how often the numbers are presented incompletely or out of context or with plenty of spin, often unintentionally. While the article is not specific to real estate, Carl Bialik’s The Numbers Guy column explores this phenomenon in [Monitoring the Numbers in the News [WSJ].](http://online.wsj.com/public/article/numbers_guy.html?mod=djemnumbers)
“For 10 years, Richard Holden has been monitoring bungled numbers in news reports and teaching journalists to be more vigilant.
Mr. Holden was a longtime editor at The Wall Street Journal and now works as executive director of the Dow Jones Newspaper Fund, an educational foundation funded by Journal parent Dow Jones & Co. Several years ago, he started gathering examples of poorly presented numbers from newspapers (including the Journal). One article said a baseball manager was seeking his 1,000th career victory this season — but didn’t specify how many he’d amassed so far. Another article reported that certain salaries were doubled from $200,000 to $500,000.
…Mr. Holden focuses on numbers that probably are correct, but are poorly or mistakenly presented by newspapers…”
One of my favorite sports quotes was from superstar basketball player Jason Kidd when he was drafted by the NBA Dallas Mavericks before he was traded to the NJ Nets. He said something to the effect of: “We’ve got to turn this team around 360 degrees.” Most knew what he meant, but it meant literally nothing.
One thing I have learned and was backed up in a class I took presented by [Edward Zufte](http://www.edwardtufte.com/tufte/), the zen-god of presenting information. His books include Envisioning Information and make the point that any chart or table without a source or identification of the scope of the data set (I’m interpreting here) “is a lie.” Within real estate, the public has grown to be wary of spin and amateur use of statistics which is strange since the industry is oozing with numbers. Only firms that resist the urge to spin with almost reckless abandon, will be taken seriously.
Here are a few examples in a long list of misrepresented housing statistics:
Housing prices have increased 10% to $500,000. 10% from when to when? Last month, last year?
Market fell 10%: Celebrity XX couldn’t sell so she was forced to dump the property for 10% less than list price. Implication is that the market fell 10% when actually the market was rising during the marketing period and the house was simply overpriced.
List prices in the county fell 10% this month. Implies the market is falling when list prices could have simply risen faster than the market. And of course, fell 10% from when?
Prices of McMansions increased a whopping 300% since last year. Well, thats possible but since this data was based on 5 sales, its hardly credible. This happens more often than you think.
The x-axis or y-axis of a chart are manipulated to smooth or increase the effect. Here are two examples using the same data. Only the scale on the y-axis was changed:
Which real estate market is better?
[Matrix’s Webmaster Jonathan Miller is now on [Blogebrity’s: The List]](http://www.blogebrity.com/thelist/). Of course its only the C-List, but hey, we’re workin’ on it. 😉
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[Donald Trump is being sued by 3 real estate brokers [BusinessWeek]](http://www.businessweek.com/ap/financialnews/D8EGD8TO0.htm?campaign_id=apn_home_down&chan=db) for $1.3M because he “failed to pay them in full after the profitable sale of land and apartments he owned on the former West Side Manhattan rail yards.”
“The lawsuit centers on the billionaire developer’s sale of 77 acres of riverfront and three buildings to the Extell Development Corp. and Carlyle Group for $1.8 billion. Parties to the October deal said it was the biggest residential sale in the city’s history.”
One of the brokers is [Barbara Corcoran](http://www.barbaracorcoran.com/). The inference in most of the media coverage is that she is doing it one behalf of her namesake company the [Corcoran Group](http://www.corcoran.com), when in fact, she resigned last month after several years as essentially a figurehead after being bought out by NRT. It is not clear whether she shares this commission with her former firm or not. Even [Trump](http://www.trump.com/main.htm) doesn’t seem clear on what Corcoran does these days saying he will never do business with her again – that won’t be difficult since she runs a television production company, not a real estate brokerage firm.
Trump says that he hasn’t been paid yet and the brokers say he already reinvested the money to avoid capital gains. Trump has already sued his partners in the sale to Extell/Carlylse claiming they sold below market as evidenced by the purchasers quick plans to flip the property.
[BREAKING: Corcoran v. Trump, for Control of Western Civilization as We Know It [Curbed]](http://www.curbed.com/archives/2005/12/14/breaking_corcoran_v_trump_for_control_of_western_civilization_as_we_know_it.php)
Tags: Barbara Corcoran, Corcoran
For anyone that has had to sit through a variance request at a zoning meeting only to hear the rath of neighbors that used to wave “hello” to you in the morning when you picked up your paper on the driveway, then this a story for you. Apparently Don Henley, of the rock band [The Eagles](http://www.eaglesmusic.com/), [has to apply for zoning variances too [Houston Chronicle].](http://www.chron.com/disp/story.mpl/ent/celebrities/3520907.html) He’s a resident of the Dallas area and this story was widely covered in Texas.
“Donald Trump is using it. Virgin Airlines, the Bank of England and the United Nations have embraced it. Even the hit TV series, Big Brother, employed ideas borrowed from this ancient art. [But what, exactly, is Feng Shui?”](http://architecture.about.com/cs/fengshui/a/fengshui.htm)
“Feng Shui is the art of placement and design and helps to create and organize our environments in such a way to bring about a more [harmonious lifestyle by making minor adjustments that enhance the flow of ‘chi’ or energy.”](http://www.fengshuireallyworks.com/real-estate.html)
More and more, [the brokerage community is embracing this [NY Mag]](http://newyorkmetro.com/nymetro/realestate/columns/realestate/11462/) as another way to sell a home.
[Here Are Some Feng Shui Real Estate Considerations](http://www.buy-utah.com/feng_shui.htm)
I would imagine that the use of this technique [and others [Matrix]](http://matrix.millersamuel.com/?p=256) would gain in popularity during weaker real estate cycles.
The concept does not click with me – I must be too jaded – and I have problems with its adoptation for commercial gain. Given how much literature there is on the topic, it doesn’t seem to be a passing fad either.
Wait a second while I turn my desk to towards the sun…
In this web site developed by the Writers Guild of America, West [Subservient Donald](http://www.subservientdonald.com/) Trump responds to your comments in this paraody. Love him or hate him, I’ll bet you can’t name another real estate developer who is a household name.
Note: sound quality is a little weak, unlike the real version 😉
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Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts. He holds the Counselors of Real Estate (CRE) and Certified Relocation Professional (CRP) designations. He is an Appraiser “A” Member of the Real Estate Board of New York and a member of Relocation Appraisers and Consultants, Inc.
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