Matrix Blog

In the current issue of The Real Deal magazine, the article Real estate’s most verbose talking heads: A look at the busy schedules of NYC’s go-to market pundits…

…goes haywire with Adobe Illustrator and selects four go to media resources:

Barbara Corcoran, the founder of the Corcoran Group and now a regular on the “Today Show”; Jonathan Miller, the ubiquitous president of appraisal firm Miller Samuel; Dan Fasulo, managing director at Real Capital Analytics; and Bob Knakal, chairman of Massey Knakal Realty are just a few among a growing bunch of go-to contacts.

I think the bobblehead designation is a compliment? Verbosity? I always used that word in the “long-winded” connotation. Well, my phone simply rings – plus – I’ve been known to hang out on car dashboards on the weekends.

Aside: Bob Knakal is a long time colleague who has generously agreed to sit down with me on my podcast, The Housing Helix, in a few weeks.

Tags: Massey Knakal, Barbara Corcoran, Corcoran

2 Comments

According to the Mortgage Bankers Association, there has been a surge in refi applications this week has resulted in a refi-boom. Mortgages rates are falling.

Its been a week since the Fed’s rate cut and we are already seeing reports that the market is stirring in some locations…although this strikes me as basically anecdotal-based reporting, no?

“Blood in the streets!” Ms. Gable said cheerfully. “That’s the best time to buy.”

This week, the average 30-year fixed rate was 5.48 percent; the rate was approaching 7 percent as recently as last summer.

…At what point will buyers be compelled to act, thinking they are getting a price they can live with and a rate they do not want to miss?

One indisputable effect of the Fed action is a rise in refinancing applications, continuing a trend that started late last year.

Talking head hoopla…

It’s hard to understand the world clearly without watching The Daily Show. Here’s the recent appearance by CNN real estate show host Gerri Willis with Jon Stewart on Comedy Central. The whole clip is entertaining, but if you don’t have time, fast forward to the 5 minute mark to catch the talking head chatter (Barbara Corcoran?). Wow.

Tags: Barbara Corcoran, Corcoran

2 Comments

Besides having a lot of admiration for the never ending contrarian ideas of Stephen J. Dubner, a la Freakonomics, it provides a great excuse to use “Freakin'” in public and not get scolded or lose my temper.

He gathered 5 real estate veterans to get their take on the questions: Is it finally time to believe in the housing bubble? And how much should the average American care?

He solicited comments from:

Robert Shiller: author of Irrational Exuberance and one of my economics’ heroes, who seems to be more optomistic than his introductions before various interviews would seem to suggest:

It is not clear whether the boom has come to an end; there is still investor enthusiasm out there.

Lawrence Yun: the new chief economist for NAR, who has taken the torch from his predecessor by dissappointingly finding obscure positive elements to expound upon that conflict with each other.

All real estate is local, and there are many local variations…The national median price was 1.1% lower in the second quarter of 2007 than its comparable period the year before….If people want to call the 1% price decline a bubble collapse — well, everyone has an opinion

David Lereah: the former NAR chief economist who gave this job title a bad name. He missed the opportunity to make NAR a trusted resource during the housing boom and post-housing boom periods, re-inventing phrases like “housing expansion” and balloons. A number of my agent colleagues were embarrassed by the things that he said during his tenure.

Bubble is the wrong imagery for today’s housing markets. Bubbles inevitably “pop.” A more useful image for the housing markets is a balloon. Balloons expand and deflate.

Barbara Corcoran: the former head of one NYC’s largest brokerage firms that bears her name. She was a brilliant marketer who really needs to re-connect with the market today. I am thinking that what worked 10 years ago doesn’t work today because I doubt that people believe she is running around the country snapping up property like picking apples from trees. But then again, I don’t understand marketing.

I’m yahoo-ing, low-bidding, and snatching up deals wherever I can find them…I’m grabbing as many over-priced, over-stuffed, and over-rated homes as I can get my greedy little hands on.

Aviv Nevo: one of the authors of the controversial Madison FSBO article who raised a lot of eyebrows with the study for his sharp insight, but also its limited applicability to the national market (not his fault at all). BTW, have you been to Madison lately? and is Jocko’s Rocketship near the football stadium still there?

I don’t know if it is time to believe in a housing bubble, and, frankly, I am not sure the average American should care.

Amir Korangy: founder and publisher of The Real Deal, to whom I have a particular bias, being in their publication a number of times, but for good reason: its a go to resource that is growing fast and has seemingly bigger than a Manhattan White Pages (8 pages of Millers, last time I checked).

Real estate prices are a local phenomenon based on employment, industry, and other factors including climate, quality of education, cost of living, immigration, and crime. Therefore, if the concept of a national housing market is ultimately a false construct, there simply cannot be a national housing bubble.

So why am I rambling about all these commentators in one column by a really smart contrarian economist? Because it speaks volumes about the residential housing market and how we see (or don’t see) it. The commentary represents a world filled with mixed signals, spin (cherry picking), more spin, limited applicability, out in left field silliness and rational thought, which leaves us freakin’ hungry to read more.

Oh, and by the way, I don’t think there was a quorum on the state of housing here.

Tags: Robert Shiller, Lawrence Yun, David Lereah, Amir Korangy, Barbara Corcoran, Corcoran

1 Comment

Despite [Talk Like A Pirate Day](http://matrix.millersamuel.com/?p=866) and the [Carnival of Real Estate](http://matrix.millersamuel.com/?p=879) Matrix readers actually thought about other things and said their piece.

Throwing caution to carny barkers walking the plank, here’s a few notable comments from the Matrix Zeppelin:

• I find it interesting that people expect housing prices to “crash,” yet they are unwilling to see the value of their own home as dropping. Real estate prices are sticky-downward, because we price our homes based on our expectations and desires, not newspaper reports.

• media coverage, if its not accurate, can help exagerate the highs and the lows of a market. I am not blaming the media at all, its just that I think there is a tremendous herd mentality out there right now.

• the “herd” is finally waking up to the reality that housing prices must revert to the mean…the media is not distorting the issue; they are merely taking a hard look (for the first time in many years) at the fundamentals of real estate. and the fundamentals are overwhelmingly negative.

• Sort of along the lines of what you are saying, I know my own perception has changed, over the past several years. Three years ago, when I bought my first condo, I wanted as much home as possible, so I got an adjustable rate 1st loan and interest only 2nd loan. This time around, in May, I was steadfast against getting an ARM, for either. The rates were just a bit higher for the 1st, and a lot higher for the second, but I didn’t want to take any chances. Bottom line? My acceptance of risk had been reduced, because of the uncertain housing market. Others, especially those who can’t afford to take out a fixed-rate mortgage loan at 8% instead of 5% (our 2nd loan rate) will have no choice but wait it out.

• I find the best blogs at “carnivals” also tend to find carnies. Small hands. Smell like cabbage.

• I am in Hoboken and it’s a sea of “For Sale” signs, whether on the street or attached to buildings. But I grew up in a town that banned them. I guess it is supposed to provide owners with a sense of security, but frankly, if you really want to sell, I think it’s pretty decent advertising.

• Here’s another one from Coldwell Banker that claims it will help me [“Find myself a city to live in.”](http://biz.yahoo.com/prnews/060927/nyw012.html?.v=75) (If you’ve also got Fear of Music and ‘77 in your collection, you’re all set as far as I’m concerned.)

• I have come to a similar conclusion concerning refinancings, but do you think that it will really have an effect on homebuyer mentality? I think that even if rates drop a little, sales will still be down and inventory up, because at this point price is key, and until that comes down, nothing will move. After all, interest rates have been low and falling all summer and it hasn’t helped at all. But that was just my own thought.

• I know this comment is a little late, but did you hear what Barbara Corcoran had to say today on Good Morning America? She is trying to demonstrate how to sell your home in 7 days and amongst some good ideas she stated: 1) Blanket your area with “For Sale” signs. Corcoran made 75 laminated signs at Kinko’s for a total cost of $324. Make your signs bright and clear. Bright yellow is the most memorable color. Use clear, big, black lettering so people can read it easily. 2) Corcoran also made up car magnets and a giant billboard in front of the house. 3) The Freunds’ [the sellers] friend owns a ski shop on the major interstate in town, so Corcoran hung a nine-foot banner across the front of the shop. Seventy-five signs, one billboard and a nine-foot banner. Yikes!!! No doubt that Town Board will have a very lively meeting the next time they get together.

Tags: Talk Like A Pirate Day, Barbara Corcoran, Corcoran

5 Comments

I had heard about the ABC spot through the rumor mill and then Curbed laid it out for me in its full glory: [Corcoran Gets Real, Offends REALTOR®](http://www.curbed.com/archives/2006/03/28/corcoran_gets_real_offends_realtor.php)

[What Your Broker Won’t Tell You [ABC News]](http://abcnews.go.com/GMA/story?id=1759949) is more of a [promo for her series on Good Morning America [BarbaraCorcoran.com]](http://barbaracorcoran.com/home?/see_me/see_me_on_tv/) but I think that the message in the piece is just plain wrong. Who does it help? The consumer? Thats really not fair for BC to frame the piece this way, even to the cynical and it only appeals to the lowest common denominator. But then again, its the sensational stuff that draws viewer eyeballs. -sigh.

Barbara Corcoran’s segment on Good Morning America piece essentially stereotypes ALL real estate brokers as liars.

In fact, the [comments in the Curbed post](http://www.curbed.com/archives/2006/03/28/corcoran_gets_real_offends_realtor.php) were mainly pile-ons and broker-bashing. Granted, brokers can be an easy target because of their visibility, marketing intensity, the dollars involved and the emotional aspects of real estate. Admittedly, I get annoyed when I see the Code of Ethics shoved in my face in the [NAR’s recent advertising campaign](http://matrix.millersamuel.com/?p=487), but its all about the people and most brokers I have met are nice and decent people.

Barbara Corcoran came to the New York real estate market, she innovated the real estate brokerage profession, conquered it, was well compensated and moved on. She is effectively out of the business but continues to try to stay relevant by “stirring it up” as she was known to do throughout her career.

I have been critical of the NAR of late, especially in the way their public relations machine handled the phraseology associated with the cooling housing market. For example: [Housing Expansion](http://matrix.millersamuel.com/?p=230), but in this case, I find myself agreeing with the NAR (kind of). [Here is the NAR take on this matter](http://www.realtor.org/RMODaily.nsf/pages/News2006032701?OpenDocument).

Although you have to admit, Curbed’s curiousity about whether NAR President Thomas M. Stevens would actually would say: ‘”registered trademark!” after every time he utters the word “realtor?” Because that would be pretty damn weird.’

Tags: Barbara Corcoran, Corcoran, NAR, National Association of Realtors

1 Comment

Source: ABC

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:

• [Barabara Corcoran](http://www.barbaracorcoran.com) — One of the pioneers of real estate marketing who did go the distance was Barbara Corcoran. She formed the [Corcoran Group](http://www.corcoran.com) real estate brokerage firm in the early 1980’s and brought new marketing concepts to a pretty boring marketing environment. She was seen as a marketer first and a real estate expert second. She had a reputation for saying anything to get attention for her firm and drove many crazy with the things that she said. She has since sold her firm to NRT and moved on to television but her influence remains.

• [Louise Sunshine](http://www.nrtinc.com/execs/lsunshine.html) — who (has literally one of the best last names in marketing) sold her firm to NRT as well, has been one of the most creative marketing minds in the real estate marketing business. She was able to understand the intricacies between the development process and the marketing process of luxury residences in many different markets. [She is not without controversy as noted in this recent article [NYT]](http://www.nytimes.com/2006/02/12/realestate/12deal.html?_r=1&oref=slogin&pagewanted=print). I remember once being on a real estate panel with her, hosted by New York University and the New York Times and she arrived about 5 minutes late and left 5 minutes before the panel ended because she was working on several deals. She walks to the beat of her own drum and maybe that’s the point.

• [Donald Trump](http://www.trump.com/) — There is no one like him and no one in New York real estate that is an international household name. He has created a brand that attracts international buyers of New York real estate and has expanded his brand into many other venues. His style is brash and comes from the school that if you say something positive often enough, people will believe it. He has developed a following unmatched by anyone in the business as evidenced the success of his television reality series [The Apprentice](http://www.nbc.com/The_Apprentice_4/) and his recent appearance and deal with the [Learning Annex](http://www.learningannex.com/).

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

9 Comments

[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

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