As the New York City for-sale apartment inventory remains sparse, residential brokers face a continuing dilemma — how to price listings with no comps. What’s real estate mogul and “Shark Tank” star Barbara Corcoran’s advice? Throw out the monthly deal sheet and price based on what’s on the market at that moment, since a property that was competing against yours yesterday might already be in contract.
“The market is like a one-day sale right now,” she said. “You can be misled if you have any memory or if you analyze or use even any stats. The only statistic that validates your price is what that buyer is looking at this week.”
Corcoran, who stopped by The Real Deal’s offices last week on a press tour with Brock MacLean of Virginia- based national listings website Homes.com, said yesterday’s sales prices or even accepted offers are “meaningless” given the pace at which the market is moving. (See video above.) Indeed, Manhattan apartment sales climbed to the second-highest level in 24 years in the third quarter, as 3,837 sales of Manhattan condos and co-ops closed in the quarter, according to data from brokerage Douglas Elliman.
The market may be poised to start moving at an even more frantic pace, Corcoran said, especially if interest rates continue to inch up.
“Deadlines are great for real estate,” she said. “If [buyers] think their interest rate is going to move up, they are going to get off the fence. If rates do rise, it’s like a gift from the heavens for real estate brokers because everyone pops up off the fence. The threat has been there, but if we have a really clear 1 or 1.5 percent jump in interest rates overnight, watch what that does to the market.”
Brock MacLean
Corcoran and McClean also weighed in on another major issue affecting New York City real estate: Zillow’s recent acquisition of listings aggregator StreetEasy. Zillow, a competitor of Homes.com, paid $50 million in cash for the website in August.
“The aggregation of listings content in the city, whether for sale or for rent, is extremely unique compared to other parts of the country, where you have much more efficient data syndication,” MacLean, who is based in San Diego, said. “We all look to find unique ways to gather content. It’s usually a function of having relationships with some of the large [brokerages] in town that are controlling the listings content. I think Zillow has gone in and bought StreetEasy in an effort to streamline that process some.”
Corcoran touted the deal as good for consumers, saying any service that provides more information to prospective buyers is a positive development for the industry.
“The inept broker is threatened because they think the consumer knows more than they do,” she said. “Shame on them.”
As for “Shark Tank,” the ABC reality show that lets entrepreneurs pitch a team of wealthy investors on funding their businesses, Corcoran spoke about a recent change to the format of the show.
The production company recently decided to drop the requirement that companies give them a percentage of their equity in exchange for appearing on the show, in response to an ultimatum from billionaire shark Mark Cuban, who insisted he’d leave the show unless the requirement was dropped, calling it unfair that struggling entrepreneurs should have to sacrifice their equity when the show is already highly profitable.
“Mark Cuban does not lobby. He picks up the phone and says, ‘Listen, Mark Burnett, [the show’s producer], I’m not [on] this show anymore unless you drop this clause,'” Corcoran said. “That makes the round and it gets thrown out. Why? Because Mark’s a billionaire. He’s powerful, he’s essential to the show and that was his belief, so people listen. I was whining and groaning without his billions for two years, as were all the other sharks, but when Mark says we’re not doing it anymore we’re not doing it anymore. They gave that one up very quickly.”