Market • Market Statistics • September 3, 2012

August 2012 Westchester Real Estate Market is Strongest in 5 Years

by J. Philip Faranda

August of 2012 will be remembered for the completion of the first two thirds of a year which has been the first upward year in sales totals since the boom. According to the Hudson Gateway Multiple Listing Service statistics for single family home closings in August, we saw the highest sales volume since 2007.

Here are the breakdowns for numbers:

August 2012 had 575 single family home closings at a median price of $650,000;
August 2011 had 512 single family home closings at a median price of $724,000;

Year to date through August 2012 had 3,053 single family home closings at a median price of $610,000;
Year to date through August 2011 had 2,663 single family home closings at a median price of $635,000;

The decline in median price is almost meaningless, as the average home sold in 2012 was smaller than the average home sold the year prior. This tells me that the buyers are trending toward smaller homes, more often first time home buyers entering the market again, which is having a clear ripple effect across the board.

We are seeing a 15% increase in sales volume year to date and a 12% increase in August over the prior August.

More positive news:
987 homes are under contract or pending sale. Last year at the same time only 732 homes were under contract.
The median price of $549,000 is indicative of the smaller home trend, with the average square footage at 2100 square feet compared to over 2400 year to date.

3518 single family homes are for sale, which is actually a lower number for the same period from years past. More sales and less inventory pushes leverage in the direction of sellers. It remains a buyer’s market until prices rise again, but it is no longer the severe unbalanced buyer’s market from years ago. Well appointed, aggressively priced homes will sell faster and for more money than they did in the past in these conditions.

Bank owned foreclosures are down, and lenders are lending again, albeit more sensibly.

What can I say? I have been bearish all year, refusing to be a Pollyanna about the market. But you can’t argue with the facts on the ground- this market is getting healthier.

Community News • August 27, 2012

An Artist’s Legacy

by J. Philip Faranda

I’d like to take a moment from real estate and discuss art, beauty, and things that endure. After a terrible accident Sunday, our community lost a very good man when Noel DeGaetano very tragically died this past weekend.

I knew Noel from our BNI group, and got an opportunity to visit his studio in Tuckahoe earlier this year. When one is about to go to where an artist does their work, the preconceived notion is that of a fragile gallery with paint, canvas, and soft light. I was, instead, met with the tools of real manual work: anvils, chains, torches, and other things one might expect at a mechanic or engineer.

Noel worked in varied media, and among his most impressive works was sculpture. One such work, a man in a martial arts posture made of broken shards of mirror, was the center of this studio and workroom. I don’t possess the gift of seeing a bucket of shattered mirror and envisioning a 6 foot man in a tai chi position; Noel did. Soft spoken as he was, his hands did awesome work, and his heart spoke even louder after a lifetime of pursuing beauty and art instead of material gain. He possessed the smile of a man who did what he loved.

Noel’s father and late mother were noted local real estate brokers, and when I connected the dots we both laughed at what a small world it is.

While Noel is gone from us, his work is not. As I type this, in New Rochelle at the transFORM gallery, Noel’s work is featured among his peers at the Artwardly Mobile exhibition until October 20. I would encourage you to check it out. Go for whatever reason you wish- to support local artists, as Noel has a number of contemporaries as well present there, or to enjoy yourself. As for me, I’ll go to remind myself that while Noel is no longer with us, the beauty that he loved and worked with daily does endure.

For Agents • August 26, 2012

For Real Estate Agents: How to Communicate with Your Broker or Manager

by J. Philip Faranda

A small, benign event occurred recently that made me dust off a list I have been compiling as a broker who has had his share of communication fails over the years with the real estate agents in my brokerage. You might be going out of town, need help with a file, or just want to give us a heads up. Regardless of the reason, there are some definite do’s and don’ts in making sure that what you have to say is understood and acted on the right way. The assumption of everything herein is that you are not standing in front of me or sitting at my desk.

Don’t use a text to announce your time out of town or similar matter. A phone call is better, an email and call is best. Text is more casual or conversational discourse. It isn’t easily transferred to the official office agenda, and no one else reads my texts to back me up. An email, on the other hand, is a permanent record and if I answer it, it probably means I am at my computer and have access to the calendar.
Don’t assume that something mentioned weeks or months in advance in casual conversation will be recalled with complete accuracy and acted upon. This prevents situations where an out of town buyer is standing in front of a house wondering where I am, and when I call, you answer from that wedding in the Finger Lakes. Ok, I made that up. But it could happen, and the Finger Lakes are lovely this time of year.
Don’t assume that something said to one manager is automatically known by another. In my own case, I have a co-owner, my wife who is on the administrative side of things. If there is one chronic issue is my own firm, and thank God it is a minor issue, it is when an agent will say to me “but I told Ann,” as if saying something to her transferred by osmosis to me. With over 30 agents, sometimes as many as 60 listings, almost 20 deals under contract, and 4 children aged 5-10, we simply can’t debrief each other on everything agents tell us. Sometimes we haven’t even spoken since you spoke!
NEVER assume that something said to me while I am driving gets past the dashboard. You beeped in on the tail end of a prior conversation, I hung up with you to answer another call, I am driving, and I can’t write anything down. I just talked a client off the ledge, put out your fire as best I could, and then dealt with a lawyer on something right afterward. Follow up. That is your responsibility.

Now, here are some Do’s.

Do have the address and other agent/firm on hand when you call about a particular transaction you are working on. Context is everything, and understanding who and what is on the other side of a problem is a big part of getting to a solution. There is a big difference between a co-op in Scarsdale and a relocation deal on a colonial in Chappaqua. I need the 411 to give you the 911.
Do bug, bother, disturb and otherwise interrupt me. If there is a problem and you are afraid you’ll interrupt my off or family time, it is a far more welcome disturbance than the same problem 24 hours later. Un-addressed issues are the worst. Err on the side of contacting me.
Do call meetings. Being proactive and planning is better than putting out fires that planning could have prevented. I am eager to help you get out ahead of your active clients and pending transactions so you can minimize drama and do a phenomenal job. To their credit, this is something where my team does a tremendous job.

The term for this is “managing up.” Helping your broker or manager help you is almost always a function of good communication. You avoid problems this way, do a better job for your clients, and learn a ton more than the trial and error that comes with poor communication. All too often, it is the clients’ who carry the water for that, and around here we prefer smoother sailing.

Market • August 18, 2012

What Does $475,000 Buy in West Harrison?

by J. Philip Faranda

What can you buy in West Harrison for $475,000?

One buyer recently closed on a beautiful 3 bedroom 2 bath cape in Silver Lake for $475,000 this past week. The home had great hardwoods, a bright, airy sun porch, a full walkout basement and a garage. It also had a large eat in kitchen, plenty of closet space, a large living room, and great landscaping outside. The property enjoyed a great location, minutes from the Cross Westchester Expressway (I-287) and all kinds of shopping in White Plains. Silver Lake has plenty to offer as well right in the neighborhood, with parks, dining and shopping.

There were multiple bids on the home, it sold for full price, and was under contract within 24 days. We wish the new owners many happy and healthy years there. We also congratulate our clients on preparing the house for sale, making it available for all showings, and working so hard to help us make the sale a reality. We’ll stay in touch.

There are still plenty properties active and for sale in West Harrison. Feel free to check them out for yourself.

[idx-listings city=”West Harrison” propertytypes=”2459″ orderby=”DateAdded” orderdir=”DESC”]

Commentary • August 15, 2012

On Powerful Women in Real Estate

by J. Philip Faranda

I was raised by a very strong woman. She was not simply a high spirited person, she changed things. My mother had her own quite distinguished career, spearheaded changing the school’s then “mothers guild” to the Parent’s Guild in the 60s, and became a leader in most of the things she devoted her energies to. And because she is my mom, I have always regarded “powerful” and “woman” as very congruent terms. I was raised by a powerful woman, I married a powerful woman, and as I look out at my efforts, I am building my company in large part with powerful women. Hell yes.

I am building my company with some powerful women. Mothers, daughters, wives, and sisters. It is funny how real estate is one of a very few industries where top producer, leader and agent are not automatically masculine terms. Our producers, leaders, and agents are often the fairer sex. I could really care less about the old explanations like the hours or the ability to work from home. When and from where don’t matter to me. In my firm, powerful women cause great results and ecstatic clients from hard work and effectiveness.

I am building my company with powerful women. Of our 34 team members, 20 are women. Of our 6 associate brokers, all 6 are women. There are only 3 executives with the firm. Two are women. But that isn’t why I am confident about our future.

I am confident in our future because we aren’t joined at the hip to a patriarchal paradigm.The women in my firm see things I don’t see. They ask questions I wouldn’t know to ask. They often come from a different point of view with a better long term ecology. The strengths that cause people to excel in our industry are up a powerful woman’s alley. They have empathy, they have compassion, they grasp subtleties, they read people, exercise caution, and when they lower their eyebrow, you had better get out of the way.

Their stories are incredible. They have raised remarkable kids. Tackled special needs. Adopted at-risk kids and caused nothing short of amazing results in both health and academic achievement. Executives in other industries. Teachers. Nurses. Lawyers. Entrepreneurs. And most humbling to me, they have chosen our firm to create their next victory.

I truly believe that when the most pressing challenges that face our world are finally overcome, it will be because of women. They don’t shoot first and ask questions later. And when they do “shoot,” they have better aim. They ask for help when they need it. They pay better attention to detail. They ponder consequences. They wonder how this will affect others. The differences between men and women is so far beyond plumbing it is ridiculous. They simply see the world differently in so many ways, and that dovetails so very well with what works in the real estate industry.

Yes, I will continue to build my company with powerful women. Some men have a problem with a strong woman. I am not one of those guys- to the contrary, I am more comfortable with a woman of strength because that was how I was brought up. I was raised by a strong, assertive woman, and I married one. We are also raising a strong young lady; maybe someday she’ll choose to work in real estate as well. But in the meantime, let me assure you that when I write more good news about our firm, it will often be sourced by a powerful woman.

Buying • Market • August 14, 2012

What Does $245,000 Buy in Greenburgh?

by J. Philip Faranda

What can you buy for just under $250,000 in Greenburgh? I’m glad you asked.

$245,000 buys you a 3 bedroom condo in Granada Crescent in White Plains with 2 full baths, a balcony, and a beautiful swimming pool right in the middle of the complex like the one we just closed on last week. The unit was 1300 square feet, had a bar built into a closet, a large eat in kitchen, and a master bedroom/bath separate from the other 2 bedrooms.

The building was a charming Mediterranean villa style garden apartment with a stucco exterior, and the taxes were under $6000. The location of the complex was moments from highways and shopping, making it a phenomenal commuter location. 3-bedroom condo apartments are rare at this price, and it did have multiple offers.

This one is gone, but there are dozens of other homes for sale in the zip code and we can help you see any of them.

[idx-listings zip=”10607″ propertytypes=”2459″ orderby=”DateAdded” orderdir=”DESC” count=”25″]

Company News • August 12, 2012

J. Philip Real Estate Welcomes Angela Johnson!

by J. Philip Faranda

Sometime back in 2006 I was in Otisville, New York working with a buyer client who wanted information on some new construction she couldn’t afford and she insisted that I call the listing agent. I was in a foul mood, an hour away from home, and I think it was about dusk on a Sunday. I was tired, alone, hungry, and cranky. And I did not want to call the listing agent on a new build my buyer could not afford. But I called anyway, and ended up having a wonderful conversation with an broker who didn’t particularly want to answer the phone late on a Sunday herself. She was also from Westchester, and thanks in large part to social media, I remained in touch with my reluctant compadre through the years. I respected her more each time I got to know her a little better at industry events.

Fast forward to 2012, and it is with immense pride that I introduce Angela Johnson as J. Philip Real Estate’s first Vice President. She will be in charge of development, recruiting, and helping our growing team of 30+ licensees to become better in all facets of the business. They could not be in better hands, and I could not have gotten a better first officer.

I have great respect for Angela. She’s an attorney, a very experienced associate broker with a solid record of performance, a great writer, and knows how to grow a real estate organization in the 21st century. If you saw her resumé you’d see a body of work that has taken apartment complexes, businesses, law firms and real estate brokerages to the next level, sometimes saving them six figures. I am humbled that a professional of her caliber would join our brokerage.

Oh-and she loves German Shepherds. That’s another plus.

I have given Madam Vice President vast authority and discretion to implement what she feels will make us the best real estate brokerage in Westchester. I want nothing less. I have told her to regard the firm as her lab of sorts, because I am confident that her ideas and talents will benefit us greatly. As she adeptly put it recently, she’ll be using her superpowers for good. I love it.

I look forward to the coming days.

Commentary • August 5, 2012

The Transformed Real Estate Agent

by J. Philip Faranda

One of the more unflattering stereotypes of real estate agents is that of a passive, uncommunicative person who does not carry their own weight in the transaction. It is, sadly, rooted in actual events, and I have head my share of these folks in my own deals all too often. You probably know the type. He or she disappears after contracts are signed. They are hard to reach, are never proactive, never volunteer an update, and never seem to break a sweat. They say things like “let the lawyers work it out” or make excuses instead of work on a solution when a problem arises.

Little can be done in the current state of the industry. The Realtor Code of Ethics doesn’t really address it, there is no law against being a passive, unresponsive jerk, and being frustrated with one’s counterpart in a deal is often chalked up to the cost of doing business.

There is one phenomenon that does occur on occasion where the lame agent suddenly transforms into an inspired powerhouse. On the day of closing, these feeble people suddenly rise from the ashes of mediocrity and transform into an absolutely determined zealot for a piece of paper known as the “lead -based paint disclosure.”

It is a sight to behold. Instead of hiding behind their voice mail greeting or ignoring their emails as they have done the months prior, they become the pursuer, hunting down this piece of paper as if it were the Holy Grail or the antidote for some virulent poison they just ingested. The timber of their voice changes, they give you eye contact, and there is even a detectable measure of irritation in their voice if they perceive any lack of urgency on your part about the matter. Pure, determined hustle.

You see, the “lead based paint disclosure” is an item that must be submitted to their firm or they can’t get their commission check.

Once procured, they revert back from the Hulk to Bruce Banner. So long as the compliance model of many companies is simply the withholding of pay until a form is submitted rather than truly training agents to spearhead transactions professionally, competently and with initiative, this will always be with us. Except in homes built after 1978 when lead paint stopped being used. No transformation with those homes.

Selling • July 29, 2012

A Tale of Two Short Sale Forums: Bank of America and Chase

by J. Philip Faranda

On Thursday and Friday I attended two consecutive forums for real estate agents on short sales put on by Chase and Bank of America respectively. Both forums were informative. Both forums sent a clear communication that the lenders wanted to make the short sale process better. And both forums also sent very differing messages about the culture of each institution. I won’t beat around the bush. The most memorable phrase from the Chase forum was “a graceful exit” for the homeowner. The most memorable phrase from the Bank of America forum was “we did not cause your homeowner to default!” and “I am not taking questions at this time.”

One session was run by a bunch of men in dark suits. The other was run by a singular woman with a charismatic presence, an infectious smile, and a dynamic gift for running the room- if your cell phone rang (they requested them to be set to silent), you had to get up and dance. If you think she was the “graceful exit” person, you’d be wrong. The guys from Chase were mostly loan officers and some supervisors of their short sale and REO departments. The presenter from BOA was a short sale negotiator.

Chase gave us a thick handout with copies of each slide from the presentation for our notes. The presentation was clear about their process and how we could best do things to get our short sales approved. The prevailing message beyond procedure was that of empathy for how hard we work as agents and of compassion for the sellers who faced hardship. They were generous in the question and answer session, and I left encouraged that Chase was serious about getting short sales done so we could best help those facing hardship and move the economy forward. I was really impressed.

Bank of America’s presentation was far more regimented. They did not have a handout, but we were told after that one would be emailed to us. I was glad I brought my tablet for notes. The slideshow was equally informative on their process as Chase’s, but the tone of the session, as well as how questions were handled, left me a little disappointed. No mention of the difficulty we face in the field. Nothing about what our seller clients face. And some subtle references to irritation bank negotiators get when agents submit incomplete or erroneous paperwork. Questions were written on index cards and handed in at the end. The presenter read some and answered them without any interaction or follow up with the person asking.

One particular question was emblematic of the prevailing attitude: The question asked why BOA still sent offers to modify loans to homeowners actively working on a short sale. Such letters cause issues. The answer was disappointing. “It’s the homeowners CHOICE! It isn’t about YOU and your COMMISSION!” What the presenter missed was that these letters are disruptive. They often created false hope among people who previously failed at loan mods and are enduring enormous stress. Some take these offers seriously, to their own peril when they abort a successful short sale only to have another loan modification flame out. They aren’t offers to modify. They are offers to apply.

Failed loan modifications are the poster child for the futility of the housing crash. I found her answer obtuse and insensitive. There was an official from BOA who was eager for my feedback afterward and asked to remain in touch. Good on them for that. But dozens of agents walked out at the end not knowing she was there.

The only criticism I have for both banks in common is the continued lack of commitment to review the broken BPO (broker price opinion) valuation process. I can draw a clear correlation between failed short sales and BPOs performed by people from out of the market area, often 3-4 counties away. That remains broken.

It is possible that had I not attended the Chase session the day before that I would have a more more positive view of the Bank of America forum. Chase hit a home run. Bank of America succeeded in making it clear that they were serious about short sales working, but they dropped the ball in other areas of PR. No bank has any business shouting that they had no hand in the hardship caused by the crash. They all did. Chase seemed eager to get things right all around. BOA made it clear that this is debt settlement. Not very warm.

In short sales, where people are facing foreclosure, the loss of their home, financial strain and hardship, and we agents are their only link to get their lives back in order, compassion and a little bit of warmth both go a long way.

Full disclosure: I am a Certified Distressed Property Expert (CDPE) and have closed dozens of short sales for seller clients.

Mortgages • July 24, 2012

Should Interest Rates be Raised? Probably Yes.

by J. Philip Faranda

If there is one thing we can learn from the real estate market of the past 5 years it is that mortgage rates alone will not cause a recovery. When rates went below 6%, then 5%, and now below 4%, the results have remained largely forgettable. But what few consider is the long term damage that such low rates may cause down the road.

Each year that we accumulate another round of 30 year fixed mortgages at ridiculously low rates, we sow the seeds of another bubble in 20 years. One of the calling cards of the crazy spike we saw from 2001-2005 was low inventory. In lieu of other options, buyers seeking to get their offer accepted bid prices up crazily. In another generation, we’ll have a whole era of homes purchased during the current time period where many owners will be reticent to sell simply because their rates are low and it will make economic sense to remain in their homes longer. Fewer homes for sale translates to lower inventory and upward pressure on prices.

In the 80’s real estate spiked despite double digit rates. Rates don’t affect buyers as much as lenders (or governments) think they do, but they matter to sellers, especially those who are empty nesters or on fixed incomes. The only way to entice a reluctant seller is with more money; that puts even more pressure on prices upward.

The smart thing to do might be to gradually raise rates to a sane level, where we don’t cause a generation of holders on because of their low rates. It won’t matter as much to buyers, who have historically bought no matter the prevailing rate, and it will minimize future problems.

As crazy as it may seem in this day and age where bust seems the norm, we are unwittingly planting some seeds of boom in the future, and not the healthy kind. So long as those in charge of managing the money markets of the nation view matters in election cycles and not the long term, we remain in danger of a boom/bust cycle and not a more stable or sustainable market. The outlook should focus on long term stability, not timing elections with hot periods.

August 2012 Westchester Real Estate Market is Strongest in 5 Years

An Artist’s Legacy

For Real Estate Agents: How to Communicate with Your Broker or Manager

What Does $475,000 Buy in West Harrison?

On Powerful Women in Real Estate

What Does $245,000 Buy in Greenburgh?

J. Philip Real Estate Welcomes Angela Johnson!

The Transformed Real Estate Agent

A Tale of Two Short Sale Forums: Bank of America and Chase

Should Interest Rates be Raised? Probably Yes.

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