The Real Deal New York

Annual brokerage ranking: big firms thrive despite inventory crunch

Residential companies with hold on luxury market see dollar volume of listings rise, while others play catch up

May 01, 2014
By Katherine Clarke

From left:

From left: Dottie Herman of Douglas Elliman, a townhouse at 22 East 64th Street, a penthouse at 250 West Street and Pam Liebman of the Corcoran Group

The strength of the Manhattan luxury market is continuing to buoy some of the city’s largest and most established firms, The Real Deal’s annual ranking of the borough’s top residential firms shows.

Despite historically low levels of inventory and a drop in their total number of exclusive listings, firms like Douglas Elliman, the Corcoran Group, Brown Harris Stevens and Sotheby’s International Realty — those which have a substantial share of the luxury market — saw the total dollar volume of their Manhattan listings jump year-over-year, according to TRD’s ranking, which reviewed a snapshot of data pulled from Online Residential March 30. That, of course, suggests that they’ve nabbed a significant number of pricey exclusives.

Elliman, which ranked at the top of TRD’s list, nabbed 62 percent more in listings dollar volume this year than last, bringing its total listing dollar value — including new development units — to an all-time high of $3.6 billion. The top five firms in the city by agent count were Elliman, Corcoran, Halstead Property, Citi Habitats and Coldwell Banker The Bellmarc Group.

Meanwhile, Corcoran and BHS saw the biggest jump in listing volume of all the largest brokerages in the city. Corcoran saw a 65 percent rise to $3.4 billion from $2.1 billion last year, while BHS saw a nearly 63 percent rise to $2.1 billion from $1.3 billion. In addition, Sotheby’s saw its total listing dollar volume hit $1.3 billion, a nearly 32 percent increase year-over-year.

Overall, the top 12 firms had a total of $12.7 billion in exclusive Manhattan sales listings, up about 52 percent from $8.5 billion in 2013. While a significant uptick, that’s still not back up to the 2012 figure of $13.4 billion, before the inventory crunch took hold.

“The luxury market is an extremely important market to be fluent in for any broker, especially now, since there are more high-net-worth individuals living in New York than ever before,” said Wendy Maitland, president of sales at brokerage Town Residential. “It’s not something that happens because you can get a certification or a degree in it. It happens with experience.”

Meanwhile, the inventory crisis rages on, impacting the number of listing exclusives at firms citywide. There have been fewer than 5,000 apartments on the market at any given time over five consecutive quarters, according to a recently released report by Elliman. Listing inventory remained flat year-over-year, rising by only 0.2 percent, in the first quarter, according to the report, which was compiled by appraiser Jonathan Miller. There were 4,968 apartments on the market in the first quarter of this year, the report shows, compared with 4,960 in the first quarter of 2013.

“A lot of people are feeling it,” said Gary Malin, president and CEO of Citi Habitats. “There’s a lot out there being built, but there’s not enough coming online to be able to relieve some of the pressure. What does come online is always at the highest price points, so you’re talking about a select group of people that will be in that sort of market.

“It’s the non-new development inventory that needs to rise to help the market continue to grow,” he added.

There appears to be no end in sight for the inventory drought, sources said. That means continued difficulties for brokerages striving to secure exclusives.

“[Inventory] will be a challenge for longer than even this year,” said Diane Ramirez, president of Halstead Property. “We’re all working around it and doing what we can.”

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Swimming against the tide

For the city’s largest firms, the biggest problem this year, as it’s been for the last few years, was convincing sellers to sell, brokers said.

Across the board, the number of exclusive listings per firm is down compared to last year.

In fact, nine of the top 12 firms saw a drop in the number of exclusives, but some fared better than others. Elliman and Corcoran saw small dips of roughly 4 percent and 1 percent respectively, while Halstead saw a decrease of 12 percent and BHS saw a 1 percent increase.

Rutenberg Realty saw the number of listings it has plummet 45 percent year-over-year, the biggest drop in that category of any firm of the ranking. However, the dollar volume of the firm’s listings dipped by only 2 percent, suggesting that it’s taking on more high-priced listings.

Rutenberg’s top executives were not immediately available for comment.

Not surprisingly, the average number of listings per agents fell at almost every company — except for BHS, Coldwell Banker The Bellmarc Group and Bond New York, which saw their averages remain steady. The largest drops were at Nest Seekers International and Citi Habitats; both firms saw average listings per agent decline by 39 percent.

“When there are fewer and fewer listings, you have more people competing over less and less,” Malin said. “At the moment, if you speak to anyone, they’ll say listings are very tight.”

In fact, the only firm to see a significant uptick in its number of listings was Keller Williams NYC, which had 80 exclusive listings on March 30, according to TRD’s findings, up from 68 in 2013. That success was tempered, however, by a 41 percent drop in the dollar volume of those listings.

The firm’s total listing dollar volume fell to $109 million from $186 million.

Eric Barron, KWNYC’s CEO, downplayed the significance of the drop in the firm’s listing dollar volume, saying the figures represented only a snapshot of activity.

“Sales are going into contract so quickly, making listing volume extremely volatile from day to day,” he said. “The market update is a snapshot of one day. On the flip side, over the first 15 days of April, we’ve signed 19 new listings totaling $47 million in new business in Manhattan alone.”

“We’re continuing our expansion and look forward to launching Downtown later this year,” Barron added.

When it comes to listing volume, the established high-end firms made hay. For example, while relative newcomer KWNYC logged a median listing price of $885,000, Sotheby’s — the firm that topped the category — had a median listing price of roughly $3.7 million. BHS, which ranked second in that category, notched a listing price of $2.3 million, according to TRD’s analysis.

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Luxury begets luxury

While the market was tight for many firms, brokerages with the strongest grips on the luxury market actually saw their total listing dollar volume soar. In Corcoran’s case by a massive 65 percent and in Elliman’s by 62 percent.

Despite the listings crunch, Corcoran CEO Pam Liebman said closed sales volume at the firm has not suffered, and the firm’s properties are selling faster than ever.

Corcoran again dominated in the new development arena. In November, the firm’s new development marketing arm Corcoran Sunshine announced that it would team up with development giant Related Companies on the marketing and sales of all of Related’s upcoming New York City condo projects, including the Zaha Hadid–designed tower at 520 West 28th Street and the residential buildings at the forthcoming Hudson Yards mega-project.

To some degree, the jumps in dollar volume at firms can be attributed to the broader rise in pricing citywide: these days, the same amount of exclusives often means a higher dollar volume then it did a few years ago.

The proof is in the numbers. The average sales price for a Manhattan apartment jumped by almost 31 percent year-over-year, according to Elliman’s quarterly figures. The average price per square foot increased by roughly 24 percent in the first quarter, to $1,363.

The rise was even more pronounced on the luxury end, where the average price was $2,706 per square foot, a roughly 41 percent increase.

“It feels to everyone that this year, we’ve just taken off,” said Dottie Herman, Elliman’s president and CEO. “But it’s really the result of a lot of years of working and strategic planning. It might look like a ‘wow,’ but it’s not about anything I did just this year.”

Herman said Elliman has been building momentum in recent months thanks to its rebranding campaign, which followed its split with Prudential and the resulting shortening of its old Prudential Douglas Elliman name. (Elliman had previously been the largest franchisee in the Prudential Real Estate and Relocation Services network.)

Elliman’s surge in dollar volume might also be partially a result of its recent spate of high-profile hires, including some agents it nabbed from Town following a public spat between Town’s founders.

For example, one of those agents, Robert Dvorin, has $105 million in exclusive listings, including a $26 million Greenwich Village townhouse at 80 Washington Place and a $16 million penthouse at 55 Warren Street in Tribeca.

Another standout of the top 12 firms: Citi Habitats. Despite its reputation as a rental giant, the firm saw the dollar volume of its sales listings soar by a surprising 47 percent year-over-year, according to TRD’s findings.

It won several pricey listings, including one that it snagged from Elliman in October for a $13 million, Winka Dubbeldam–designed penthouse at 497 Greenwich Street. The firm also has exclusives on a $6.6 million West Village townhouse at 113 Bedford Street, and a $12.5 million prospective Soho loft building at 508 Broadway.

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Strength in numbers

When it comes to agent head counts, Elliman and Corcoran are still by far the two largest firms in the city, according to TRD’s analysis, which this year used agent data pulled from OLR.

Elliman clocked in with 1,725 agents, up 8 percent since last year’s ranking, while Corcoran logged 1,191, up 9 percent.

Meanwhile, three firms — Town, KWNYC, and Nest Seekers — saw dramatic growth in terms of number of agents. The three-year-old Town saw its count jump by 22 percent, to 472.

That was despite the month-long legal battle earlier this year between the firm’s owners, Andrew Heiberger and Joseph Sitt, a dispute which saw a string of the company’s top-producing agents head for the door. (In addition to Dvorin, Patty LaRocco, James Cox, Frank Arends and Clayton Orrigo also jumped ship.)

Town’s number of listings increased by 3 percent year-over-year, and it’s total dollar volume of listings increased by 9 percent. KWNYC, meanwhile, made its debut on TRD’s top Manhattan firms list, which is based on agent count, thanks to the 103 agents it recruited since last year. The company now has 343 agents, a 43 percent increase over 2013.

Barron attributed the rise in the firm’s agent count to an error in last year’s count.

Still, Barron estimated that KWNYC’s agent count had gone up by between 20 and 30 percent, with notable additions including Janet Wilkinson and Susan LeFevre, partners who signed after a successful run together at Corcoran.

Nest Seekers’ agent count jumped to 410, according to TRD’s research, a 58 percent rise year-over-year. But despite the expansion, the firm didn’t see any big changes in the number of listings it signed, or the dollar value of those listings. The firm saw a 13 percent drop in exclusives and only a 1 percent uptick in the dollar value.

A Nest Seekers spokesperson disputed the numbers, but additional listings the firm sent TRD to consider for the ranking were not active listings and therefore not counted.

For the most part, firm heads said they haven’t been aggressively looking to open new offices. Once the inventory squeeze loosens up, that may change, they said.

“I’m hoping we’ll get a little bit of relief this spring. Many people kept their apartments off the market waiting for the better weather, but I don’t see any huge changes in the regular resale inventory,” Liebman said.

Click to enlarge. Click to enlarge. Source: All data was gathered from the OLR listing portal on March 30. Data includes only Manhattan-based brokerages and agents and only active Manhattan residential sales listings that had been updated within the last 360 days at the time of the survey. Data does not include multi-family properties, listings that are in contract or listings that have pending offers. Percent changes are based on figures before rounding. Primary rankings are based on number of Manhattan agents; firms on that list are then ranked by other factors.

Click to enlarge. Click to enlarge. Source: All data was gathered from the OLR listing portal on March 30. Data includes only Manhattan-based brokerages and agents and only active Manhattan residential sales listings that had been updated within the last 360 days at the time of the survey. Data does not include multi-family properties, listings that are in contract or listings that have pending offers. Percent changes are based on figures before rounding. Primary rankings are based on number of Manhattan agents; firms on that list are then ranked by other factors.

Correction: A previous version of this story incorrectly stated the name of a firm. The correct name is Coldwell Banker The Bellmarc Group.

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