First Quarter stats are in for the Manhattan residential real estate market in 2009. Here is an overview taken from multiple sources:

• Over 10,000 apartments are available for sale, up 15% from previous quarter
• Sales declined 47.6% from same period last year
• 57.2% of sales for 1st Quarter were Re-sales, down 69.5% from same period 2008
• Median sales price of re-sale property fell 20.8% from prior year quarter
• Median sales of a new development rose to 31.4% from prior year quarter
• Average days on market rose to 170 days, previous year quarter was 146 days
• The average discount between asking price and sales price increased to 12.4% from prior year quarter

I recently spoke at the CRS (Certified Residential Specialist) Sellabration which is their yearly convention on Creating Buyer Loyalty and Urgency. It was held in one of my favorite cities, San Francisco.

A large contingency came from Spain, and as it appears, their real estate business practices are similar to ours in New York City. The editor of Immobilarios ( a spanish real estate magazine ) is Fernando Garcia and he posted the following video of me on youtube with Spanish balloons. Clearly, I need to lose weight and it is fun to watch with the spanish subtitles in balloon form.

Fidelidad sin Contrato

Fourth Quarter stats are in for the Manhattan residential real estate market in 2008. Here is an overview taken from multiple sources:

• Prices are down 20% from July of 2008
• Sales down 57% from same period in 2007
• Over 9,000 apartments are available for sale, up 3% from the previous quarter
• The average discount between asking price and sales price increased to 7.3% from 2.7% the year before
• Average days on market is 159 days, up from 131 days in the previous quarter

I wrote this article for an upcoming Newsletter of the Go Star Power Group.  It is written for real estate agents, but I believe it has relevance for all of us.

On Motivation

By Patrick Vernon Lilly

Motivation is one of those words, like love, with far too many meanings.  The love you have for a child is something very different from the love you have for a mate of 30 years, or a newly found infatuation, or more dramatically, the love expressed in the statement “I just love this house.”

Motivation too runs a wide gamut of meaning.  After returning from a real estate seminar or conference, like the upcoming Star Power Conference, I often hear how motivated the attendees are to return to their work.  We feel rejuvenated, ready to go to work with a zeal which was lacking prior to the conference.  Beneath the word ‘motivation’ is actually a sense of hope:  hope that we can reach our dreams.  Prior to the conference we may have felt lethargic; our goals seemingly out of reach.  From the seminar training, we have new tools, different ways of thinking, proven systems and inspiring stories, to name a few, which make us re-believe that our dreams, our goals, are attainable.  This is hope in its purest essence.  I find it interesting that hope is so closely associated with growth, be it personal, spiritual, psychological or business related.

Inspirational or Motivational Speakers are a classic motivation source.  But are they really motivating you or are they providing you with a new set of eyes?  We all have been moved by the great speakers of our time.  Maybe you heard them at a conference, or a political rally, or at a forum for them alone and you were both moved by what they had to say and how they approached their lives and our world.  I would contend they are creating a new container for you to inhabit:  to dream bigger, to view the world through a different perspective that serves you better, and to widen your possibilities.  In other words, they enable you to expand the box you live in to encompass more.

I often hear that to be successful you must learn to motivate yourself to be disciplined.  I couldn’t disagree more.  To me, being disciplined is doing activities that you do not enjoy or want to participate in and it is a world view that does not work for me.  Instead, I am a big proponent of being very clear what your goals and values are and aligning your actions with those goals/values. 

Let me give you an example:  you want to increase your business by 25%.  In the old paradigm where discipline is respected as a virtue, you realize you must warm call your circle of influence in order to increase your leads which will allow you to increase your overall income.  But you hate warm calling and you force yourself to do it anyway (yeah! for discipline), consequently you spend hours without joy and frankly you do just an average job at warm calling.   

In the alignment of actions with your goals/values paradigm, that warm calling which was once a drudgery can be converted to joy and enthusiasm at best and acceptance at worst, all good things.  When you are clear that you really want to increase your income by 25%, you probably will need to increase your leads by 25% and warm calls, as you know, are the most effective and inexpensive means of lead generation.  Now, when you couple that intention/action with a value you hold high, the result is easy and natural since you are in alignment.  Say you value giving excellent customer service, then prior to calling a specific person from your COI you would determine what is of real value to that client and make the call.  That value might be a market update, or an upcoming zoning change, or possibly inquiring about their family.  The call is made in joy since it is a win/win scenario.  You are providing real value to the client and you will be reaching your goal of increased income through lead generation.  And of equal importance, there will be no suffering on your part.

In my opinion, true motivation is what brings you into action best.  That will vary from person to person and it can be summarized through the DISC personality types:

• D (Driven) - New challenges. Power and authority to take risks and make decisions. Freedom from routine and mundane tasks. Changing environments in which to work and play.
• I (Influence) - Flattery, praise, popularity, and acceptance. A friendly environment. Freedom from many rules and regulations. Other people available to handle details.
• S (Steadiness) - Recognition for loyalty and dependability. Safety and security. No sudden changes in procedure or lifestyle. Activities that can be started and finished.
• C (Compliance) - Standards of high quality. Limited social interaction. Detailed tasks. Logical organization of information.

Your personal motivation may well be a combination of many of these factors or some not listed here.

So, in closing, motivation is hope; and inspiration; and expanding your container; and seeing through new eyes; and the alignment of your actions with your goals and values; and what brings you into action best.  Let me leave you with a few inquiries for you to ponder.  These questions can be relevant for yourself, your team, your company or your family:

• Where does hope reside in your life (team, company, family)?
• What areas of your life would you like to expand your container?
• What current actions/behaviors are out of alignment with your values and goals?
• How clear are you on what brings you into action best? 

I went to a lovely breakfast the other day at Chantarelle to preview an exciting new development at 50 Franklin Street on the eastern edge of TriBeCa.  The 18 story project is designed by the Dutch architect .

If you like high style and want something more then the typical glass wall construction that is evident everywhere in Manhattan and its environs, then this project might be for you.  The spaces are sculptural inside and out, with support beams becoming interior decoration and kitchen islands twisting like a wave.  There are three basic types, with "Lofts" on the lower floors having double height ceilings, "City" apartments on the middle floors, and Penthouses at the top.  They are quite spectacular and certainly not everyone’s taste.

Prices range from $2,500,000 up to $16,000,000.  Call Patrick Lilly at (646) 442-7439 for more information.

A new agent came into our manager’s office upset about a deal that was falling apart.  It seems the owner had given the agent the square footage figure from a recent appraisal.  The purchaser had their interior decorator/architect measure the space and it came up 150 square feet short of the number quoted by the agent.  The purchasers, naturally, wanted a price reduction.

Square footage is a funny thing in Manhattan, especially when dealing with coops.  It is my experience that two apartments each quoted as 1,000 square feet will be dramatically different in size.  Well how can that be, I mean a number is a number?  New York courts have ruled that it is perfectly acceptable for residential space to be quoted in "Gross Square Footage", a standard practice borrowed from commercial real estate in the city.   Gross Square Footage can be defined for practical purposes as the entire square footage of the relevant space including the bricks outside the walls and the space’s portion of common element on that floor.  For example, if the floor has four apartments of equal size, then 1/4th of the common hallways, 1/4th of the elevator shafts, and 1/4th of the stair wells would be included in the gross square footage figure.  Thus the loss factor (that which is outside of the apartment itself) can very from building to building.  Hence, two apartments which are quoted as the same size may actually be quite different.  Loss factors vary from 5% to 30% with the majority averaging 20%.

Many brokerage firms do not quote square footage due to potential law suits, or they try to get around the problem by saying the square footage is approximate (which by court standards is within 3%).  When push comes to shove, the square footage quoted in the offering plan is held to be sacrosanct by the courts.  So always check that figure.  It is my suggestion that you use the square footage number as a general benchmark to compare different apartments, but ultimately realize the numbers may be off.

I would like to see our industry begin to quote both Gross and Net Square Footage figures.  I would personally find that helpful and it would make it easier comparing apples to apples.

The new agent, you might wish to know saved her deal.  The owners finally found the square footage figure in the original offering plan and it was just off 19 square feet from their original quote, well within the approximate range. 

For my first blog, I thought I comment on an article I read yesterday in the New York Times.  I found the article "Couple’s Suit Accuses Real Estate Firm of Bias Against Children" by Andy Newman to be interesting on many levels.  The story basically focuses on an expecting couple who are consistently turned down to rent apartments in the Park Slope section of Brooklyn.  Eventually a law suit is brought against the owners and the couple’s brokerage firm, Brown Harris Stevens, for discrimination against renting to families with children under the Fair Housing Act.

Discrimination is clearly wrong and let us look at this story from the owners (landlord) side.  Say you own a two family townhouse; you live in one unit and you rent out the other unit for income and living in a quiet environment (yes, which may be possible in the city) is a value you hold high.  You have rented to families in the past and found the noise from young children to be understandable and disturbing none the less.  You would prefer to rent to a couple that is quiet.  Well that is illegal under the Fair Housing Act.  In my opinion, that seems very unfair to the townhouse owner who resides in his/her own building.  In a Coop you can deny a potential purchaser from buying an apartment in your building because they throw loud parties or play the piano at odd hours, but you just have to accept the noise of children in your multi-family townhouse.  Yes, families deserve the right to find an acceptable place to live and prosper too.  I wonder if the solution is to exclude houses under four units or small houses where the owner is in residence in one of the units.  Since the housing stock in Park Slope contains a large portion of owner occupied townhouses, it is not a surprise the family in question had these problems.

As the story was reported, the owners and brokers seemingly have to lie to protect themselves when they do not want to rent to families with children.  It is clearly an unenviable position for all.  It is so easy to blame the broker for he/she is breaking the law technically.  But what do you do after a prospective owner calls you (a real estate broker) indicates he wants quiet tenants, you tell him he can not discriminate against children and he says fine, just make sure they are quiet (meaning no young children or babies)?  If the owner lives in the building, my personal moral compass is to side with the owner on this issue.  Fortunately I have never been confronted with this dilemma in Manhattan, nor do I do that many rentals, but it is interesting and I wonder how I would handle it.  I also wonder if my viewpoint is colored by not having any children myself. 

Conversely, the Fair Housing Act causes problems if you are targeting families.  If you have a four bedroom apartment and wish to include in the advertising "perfect for families", you cannot, because the Fair Housing Act prohibits that form of advertising text.  How many couples are looking for a four bedroom apartment?  And if they are, wouldn’t they have the common sense to look at the apartment even if the advertising text included the phrase "perfect for families"?   It seems silly to me.

Let me know your thoughts!