The kings of Queens

While the first-time homebuyer tax credit propelled sales in Queens through September, business has since cooled.

Record-low interest rates are helping to stir sales, but the borough’s brokerage firms are in a still-depressed market — and have been fighting for every closing by hiring top talent from competing firms, beefing up training, and investing in new technology.

This month, The Real Deal looked at the biggest residential firms in the borough by number of agents. In the battle, Bayside-based Keller Williams Realty has emerged as the king of Queens. Keller Williams took the top ranking with its 257 agents. Prudential Douglas Elliman Bayside came in second with 140 agents, and Century 21 Best ranked third with 125 agents. Some of the other firms in the top 10 were East Coast Realtors, Exit Kingdom Realty and Laffey Fine Homes.

The Queens market has held up better than other areas of the city, buoyed by a solid school system, good transportation and proximity to Manhattan, according to market observers. But sale prices are still down between 15 and 25 percent from their 2006 heights, brokers estimate. In addition, buyers are still skittish, and some brokers predict that even more foreclosures and short sales could be in the cards.

At Keller Williams, the average amount of time a listing sits on the market is three months. “At the height of the market, I would get a listing and before I sat down in my chair, I would have several offers,” said Louis Cardenas, broker/owner of the firm.

Back then, everybody and their mother was becoming an agent, and houses would sell regardless of skill level, Cardenas said. “Now, you need to know what you’re doing.”

The firm’s customer profile these days is first-time homebuyers (in Northeastern Queens), and in Western Queens, a mix of trade-up buyers moving into bigger homes. Cardenas said the firm has seen a 25 percent boost in sales volume this year compared to 2009 (an all-around bad year, citywide). It has also generated over $236 million in sales year-to-date and closed 529 sales through Oct. 30, Cardenas said. He attributed those numbers to signing on eight top producers from other firms and “a tremendous amount of training,” he said.

For example, if the firm sees its listing inventory is low, a top agent will schedule a class on obtaining more listings. If inventory is too high, a sign of overpriced listings, agents will brush up on price reductions and “what scripts they should use with homeowners to get prices down,” Cardenas said.

The company’s profit-sharing model — in which half the owners’ profits go to the agents on a monthly basis in addition to any sales commissions — has also helped retain agents, he said.

Based on robust activity in areas such as Astoria and Long Island City, Keller Williams is opening a Jackson Heights office, and is also eyeing opening one in Manhattan.

Louis Cardenas of Keller Williams

A big push toward training and education has also fueled Prudential Douglas Elliman Bayside’s business, which ranked second in terms of number of agents.

“We’re insisting that our agents be better in their marketing techniques and negotiation skills,” said Donna Reardon, Queens’s regional director for the firm. Elliman also leverages proprietary programs such as Online Seller Advantage that Reardon said maximizes exposure for listings.

The office closed 587 sales as of Nov. 1, Reardon said, noting that the firm is “number one in closed units for all of Queens,” up 42 percent from the year-ago period. (The Real Deal did not independently tally closed sales by firm for Queens because the data was not publicly available.)

Century 21 Best, which ranked third, closed about 400 deals through the end of October, slightly up from last year, said Jeff Silverbush, the firm’s president. That’s due to more aggressive marketing — not market improvements — although the tax credit boosted business through September, Silverbush said.

Still, prices are well off peak levels, he said. A two-family house in Woodside that would have sold for $800,000 in 2006, for example, now sells for $600,000.

Today, Silverbush said, sales are coming from a strong showing of Asian buyers with large down payments, and low interest rates have been “a tremendous selling point.”

But real estate remains a hard sell these days. “A few years ago, every time you would cast your line in, a fish would bite,” Silverbush said. “That’s not the case now.”

To drive business and improve sales, “we’ve had more technology than we’ve ever had,” he said, noting the firm is using programs that help agents track buyers and sellers. What’s more, “we’re on 100 websites,” he said, citing Trulia and Realtor.com, “whereas before we were on five or six.”

Throughout the Queens market, foreclosures are still a big piece of the pie, brokers said. Approximately 30 percent of Century 21 Best’s market is foreclosures, short sales, and REOs, or “real estate owned” by the bank, versus a mere 2 percent five years ago. That means “we’re doing a lot more work for a lot lower commission,” Silverbush said.

Daniel Algar, broker/owner of East Coast Realtors, which tied in fourth place on the ranking with Exit Kingdom Realty, anticipates more foreclosures for Queens. “There are foreclosures that have not yet hit the market. The owner is still living in [those homes],” he said.

If those come on the market in the next six months or a year, that could further depress prices, he said. Algar said East Coast will sell a new construction home in Bayside for $1.1 million that would have gone for $1.6 million three years ago.

“People are holding off a little bit. Nobody wants to buy something today for a million and find out that it will go for $900,000 next year,” Algar said. He said in order to weather the storm, he’s actually increased staff. “I had 31 agents. Now I have 100,” he said.

On the bright side, home prices have stabilized over the last six months. Today homebuyers from China, Korea and Taiwan, who also operate businesses in Queens, such as supermarkets, hardware stores and tailors, have helped prop up the firm’s business, which focuses on areas such as Bayside, Douglastown and Flushing.

Vincent Koo, owner/broker of Exit Kingdom Realty, said business has been strong. He said his firm, which has 100 agents, has closed 325 transactions year-to-date, up 11 percent from 2009. The number of transactions has shot up an average of 17 percent a year over the last five years. Koo said Exit Kingdom’s beefed-up staff and its bonuses, which are given to brokers for introducing agents to management for recruiting purposes, has also helped. Indeed, Koo said the firm has paid out nearly $1 million in bonuses in the last five years, “which attracts and keeps career-minded agents,” he said.

“Business has improved because of low interest rates and because buyers are starting to see we’ll be in this situation for a while, and there is an opportunity in this situation.”