Power lunch: Resi brokerage and lending execs dish dirt in Hudson Yards

Two big resi brokerage execs and a senior bank lender talk about the mansion tax, Compass and a changing industry over braised fish in Hudson Yards

Sep.September 01, 2019 01:00 PM

From left: Diane Ramirez. Sari Sardell Rosenberg and Ellie Johnson (Photo by Emily Assiran)

Halstead chief Diane Ramirez quietly hunched over her arm and whispered into her wrist. The attempt at covert communication through her Apple Watch didn’t, however, go unnoticed by her tablemates — instead, it earned her playful comparisons to a comic strip detective.

“That was so cool. That was a Dick Tracy moment,” joked Citibank’s Sari Sardell Rosenberg, a senior lending officer on condominium and co-op deals.

Ramirez, Rosenberg and Ellie Johnson of Berkshire Hathaway HomeServices recently convened at the English countryside-themed restaurant Queensyard in Hudson Yards for The Real Deal’s Power Lunch. The three executives are major players in New York’s residential market, with more than 50 years of brokerage and nearly 30 years of lending experience combined. 

Over braised halibut and salmon, the three chatted about the rush to close sales before New York’s “mansion tax” kicked in, Compass and its ever-aggressive growth tactics and the latest ways technology is changing residential brokerage and finance.

Compass — the SoftBank-funded brokerage now valued at $6.4 billion — is a frequent topic in discussions about the future of residential brokerage. The unicorn has been hit with several lawsuits filed by competitors. Most recently, the Corcoran Group’s parent company Realogy accused Compass of stealing trade secrets.

Ramirez: The interesting thing is Compass is a new player in town. Somehow, [other firms] play well in the sandbox; we get it. They may have to realize that they have to know the rules for playing in the sandbox.

Johnson: That’s a very polite way of saying it. Sometimes the growth is too rapid, and they have to take a step back and reevaluate. But you know, for me, I came from California. I understood New York business practices were different. There were women and men that really helped me [navigate the market]. I think I can say very confidently that I built a reputation based on the foundation of the people … and it’s not easy. I don’t think I have hurt anyone on my path. I don’t intend to.

Rosenberg: Do you find agents that use social media [and] videos for tours are more successful with their listings?

Ramirez: Without a doubt. In this market, in particular, things don’t just jump off the shelf. You have to be as creative as you can be. You need to engage the consumer in so many different ways. We’ve done lifestyle videos now, where we bring in artists, we bring in professional ballerinas, anything that will get a person to stay on.

Johnson: We have agents who, instead of using your traditional real estate photographer, are hiring photographers who do weddings and events … When people get concerned about if the internet or social media or artificial intelligence is going to eliminate the real estate professional, that’s so far from the truth because ultimately, you’re going to need people.

Rosenberg: Oh, completely. I have clients still calling me from 20 years ago. It’s a level of comfort people have with you. And being a real estate agent and being a mortgage lender, we are given information that’s so confidential. And they know that, and we know these people inside and out. When someone calls in like, “Hi, how are you?” I’m like, “How are you, what’s doing? How’s the wife? What are the girls doing?” You know what’s happening. You know their whole life history.

Johnson: Those relationships go beyond just the client and the salesperson. It’s also the management and the companies working together. So Diane’s office might have the seller, [and] I might have the buyer. And then the lender, if there’s financing involved, is kind of the conduit that brings us together.

The discussion also turned to the slowdown in New York’s luxury market. After a brief uptick in closings — due in part to newly implemented state mansion and transfer taxes — high-end sales have continued a downward slide, according to Olshan Realty.

Ramirez: I don’t care what price point it is out there. People are looking to be certain that there’s a perceived value. And I know when you think of $45 million or $100 million, what is value? But there is always something, whether it’s the penthouse or a terrace. That’s where I think the market’s changed. What our agents need to be advising their sellers on the most is: How do you present that perceived value? Because the perks, the amenities, all of that is important. But it’s a little fleeting.

Rosenberg: What’s interesting is that [the mansion tax] coincided with low interest rates … Rates went down in June, so a lot of people were not only refinancing, obviously, but purchasing as well. But as much as I personally think that should be an impetus for people to purchase, there are so many different factors involved. One thing I say all the time is, “You can’t time the market.” You can’t time when you find a property you love.

Ramirez: But it does give buyers more purchasing power.

Rosenberg: When rates are down, it does. Ideally, it’d be great to buy that house at the lowest rate possible — so you can brag about it.

Ramirez: The buyers are out looking. So when something is attractive, they’re able to jump on it. The interesting thing with the mansion tax, there was such a rush to close. That to me was really for the uber-luxury. It’s when you hit $10 million that you could tell where the impact of the tax became somewhat onerous. I really don’t think it’s going to have a huge impact on value now — especially $2 million to $3 million and lower, with interest rates what they are. I think it’s a brilliant time in the market. Sellers are so ready to let their properties go at a reasonable price, and I think the buyers are seeing it.

Johnson: It’s going through these cycles, right? They used to be so predictable — every seven to 10 years, it was a buyers’ market. Then it goes to a sellers’ market. But the cycles now are very unpredictable because there’s too many outside forces changing that environment. And part of it is that we live in such a global community, where every economy impacts a New York purchase. It’s not just a local thing.

Rosenberg: I have to say, on my end, I think peoples’ psyche changes once they know how much they can afford. People will come to me for a pre-approval and then they’ll say, “Well, we’re just looking.” And nine times out of 10, within two weeks, three weeks tops, they found something.

Ramirez: If you go through the process and you end up falling in love with something, you don’t want to have a bank tell you that you can’t have it. Or a board to tell you that you can’t have it. So going in with the assurance that you know you can afford it, you’re just more excited about it.

Rosenberg: We know that Manhattan is still good no matter what happens. It’s a whole other planet, a world within itself.

— Edited and condensed for clarity

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