Sensation Sells

One of New York City’s most prominent real estate rags recently printed an article exploring the actual extent of demand for ultra-luxury condos. In it a number of celebrity agents, appraisers, and developers opined about the depth of the market for condominiums costing $30 million or more, of which there are, apparently, at least 99 in Manhattan. What is extraordinary about this, besides that there are this many and that, with few exceptions, no one much is buying them at the moment, remains the fact that yet another article is being written about this teeny segment of the market! Honestly, how many people actually care about this, beyond the flush of prurient curiosity which has made New York real estate into a Kardashian-esque viewer experience?

Our media no longer covers our business as news. It has become, at best, lifestyle coverage and at worst a print or online version of reality TV. Hence the disproportionate amount of coverage according the most expensive 1% of listings, while the actual marketplace in which most mortals dwell rarely receives a fully developed and well-researched story. This slant towards the top creates a series of complex consequences:

• Sellers in particular are adversely affected by sensationalistic stories covering the top of the market. In spite of what their agents advise, they believe that there must be a correlation between the sale of a $100 million apartment at One57 and their two-bedroom postwar co-op on East 74th Street. But in fact, this rising tide does NOT float all boats, at least not equally. The new condo market long since diverged from the co-op marketplace in terms of both value and appreciation, both of which are far more modest in the latter. Misperception of how THEIR property may fit into the market causes many sellers to overprice, which counterintuitively frequently means that they end up selling for less than they might have with a less exaggerated price from the beginning.

• The national and global perceptions of our marketplace suffers from the distortions brought on by over-reporting for one segment and under-reporting regarding others.  Not every decent home in New York costs $10 million dollars. Not everyone who purchases here is either a foreign potentate or a hedge fund billionaire. Mostly, we are still a city of working people hoping to find a nice place to live which doesn’t consume more of our monthly income than we can afford.

• Other than their knowledge of how many apartments cost $30 million or more, most of our consumers can’t find many stories about the real estate markets in which they (and most real estate agents) transact business. Activity for $2 million and under, which has for some time been the hottest sector of the market, attracts minimal press attention.  And readers almost never see analysis of the real estate market using similar tools to those applied to the financial markets.

For a great many people, in New York as elsewhere around the country and the world, their home will be the most expensive investment they will ever make. Doesn’t it deserve the serious and analytical coverage devoted to practically every other major asset class? Do we read in the Wall Street Journal about the stock portfolios of celebrities?  Agents like me simply seek some respect towards the product we devote our careers to creating, promoting, and supporting.  Is that so much to ask?