Warburg Blog

I sent my Manhattan Market Watch column yesterday to my publisher for October publication–which is an especially long lead time considering we’re talking in summer about the fall.  I’m decidedly optimistic about the 4th quarter ahead, but I also have some real worries.  To read my report in its entirety, go to http://www.warburgrealty.com/about/press/419.  Enjoy these last weeks of summer. 

http://www.warburgrealty.com/about/press/419

As things slow down for the last two weeks of August, it gives us a little time to reflect on larger market trends. One of the most interesting is the way new development listings and resale listings, especially those in older buildings, are behaving differently in the current environment.

It is the new development inventory which is getting all the press. Many neighborhoods have become overbuilt in recent years, leading to a glut of inventory which suddenly cautious consumers have been reluctant to purchase. For a variety of reasons, not the least of which is the ire of purchasers already ensconced in the buildings, it is difficult for developers to mark down their unsold units too substantially. So inventory is slow to get absorbed and this leads to the perception that there is a glut of available property in the New York City luxury marketplace.

The truth is more complicated. Actually, new development and re-sales are functioning almost like different products. Over the last four months resale inventory has been absorbed at an accelerating rate, as price drops and a rising stock market have created opportunities for buyers. Today, while the new condo buyer still has many choices, there may be very little to show the buyer of prewar co-ops in some of the better locations.  These two markets ran in tandem in 2006 and 2007, but I predict that they will require different reporting strategies for at least the next 18 months, as the one continues to struggle with oversupply while the other is increasingly characterized by relative scarcity of product.

Mann Report Residential
Manhattan Market Watch
By Shirley Hackel,
Executive Managing Director

I’ve been a skeptic, and I’ve had my reservations, as I rationalized: Who has the time to learn about social networking and how to use it? Besides, my private life is—well, private. Being discreet is a requisite of my business, and I likened social websites to reality TV, arguing neither was my cup of tea. Though not a full convert yet, I’ve made an extra special effort to begin. Hardly a passing fad, social networking is spreading to include users on both sides of 50. As baby boomers join their children in ever-growing interactive online communities, the way people work and play together is being transformed. As the various social websites proliferate—each with its own distinct personality—marketing on these sites is evolving, underscoring an increasing interconnectivity between social and business worlds. What’s a broker to do?

Embrace a new venue—is the answer—and learn how to become part of an evolving interactive social fabric on the web. Encouraged or, more accurately, prodded by my management to get started, I posted a profile and was immediately cheered on by my daughter with a “Hi Mama!!!!! Welcome to Facebook!” With her permission, I unabashedly set about to poaching friends from her own roster, though not indiscriminately. Scrolling down her list, I selected those that I remembered from play dates, sleepovers, parties and prom nights. It was enormously pleasing to see how they had grown into their adulthood. In retrospect, I probably should have added a personal note with my request to friend them. I wondered, “Would they accept my invitation?” And once accepted, then what?

Social networking is all about give and take. Bob Baker, author of MySpace Music Marketing talks about “the ping-pong effect.” “It’s you sharing yourself with and getting to know dozens, and then perhaps hundreds of people,” he explains. “In turn, those people mention you to their friends.” According to Bobette Kyle, whose WebSite MarketingPlan I discovered online: “You meet people and get to know them by sharing information about each other. Those you like and/or share interests with become part of your ‘network.’ The marketing magic kicks in when those in your network start talking about you. Your reputation spreads by word-of-mouth.” It’s a little like trading business cards with those you connect at a giant cocktail party—only this gathering is 24/7 and spans the globe.

Steve Goldschmidt, my associate at Warburg, who is a master at social networking says he spends about an hour a day on Facebook, and adds, “It’s easy to join, and free. It’s all about building connections, developing relationships, making new friends and reconnecting with old ones.” Steve credits Facebook with at least one transaction and three new referrals.

As brokers, we are keenly aware of the importance of referrals, and what it means to farm a territory. By extension, social websites provide an arena for us to mine our connections and expand our spheres of influence.

A Facebook Novice
I’m definitely a neophyte on Facebook, and I’m feeling my way around. The site lets you see who is friends with whom, and how many friends each person has. When you friend a person who has very few friends, an amusing, automatic message appears to enlist support to get someone started on Facebook: “Robert has 11 friends. Help Him Find People He Knows.”

As a newcomer, my first order of business is to make more connections. As I grow my circle of friends realizing six degrees of separation into an expanding online rolodex, my wired network multiples and soon others ask to friend me. Once a friend agrees to become part of your network, each time there’s any online activity, you’re updated and have an opportunity to comment. Initially, I’ll play the observer as I figure out how to share myself best with others and participate meaningfully in my online neighborhood.

I’m just at the tip of a huge learning curve. Which social networks will suit me best? Facebook, LinkedIn, Twitter, MySpace, or something else that will morph from these? I’m not at all sure. But I’ll try to find my own voice and audience to share my knowledge generously and honestly with those who choose to join my network. And I’ll try not to embarrass my adult children.