As the national housing slowdown pervades even New York City — a previously unthinkable prospect — brokers are scrambling for tips on how to make the best of the downturn. Manhattan’s sales volume in the past quarter decreased by 34 percent year over year, according to a leading market report, and inventory edged up to its highest level in three years. The outer boroughs and suburbs have seen the worst of it, though, with double-digit price declines in some cases. And in the most extreme situations, the coping strategy of agents there has been to abandon the businessat least temporarily.
The Real Deal talked to some seasoned brokers about how they are changing their business strategies in a more challenging market as part of an in-depth Q&A.
A popular move has been the shift of listing brokers to representing buyers. Where a commission was all but promised for a seller’s representative a year or two ago, the new buyer’s market has been sweeping agents up with the tide. Many brokers said that buyers are aware they have the upper hand and are doing their homework before making an offer, keeping brokers on their toes.
In the outer boroughs, slow sales seem to have dampened large brokerages’ desire for buying out independent firms in Brooklyn, a trend seen in the last few years. And most experts agree that the big names that did come to
the borough — Corcoran, Prudential Douglas Elliman, Halstead and Brown Harris Stevens — will fare better than the storefront offices in the possible hard times ahead, thanks to their deeper pockets for advertising and staffing budgets.
Now that parts of the city are vulnerable to the foreclosure crisis, especially the outer boroughs and Upper Manhattan, brokers there have little choice but to venture into the business of short sales, the selling of a property for less than the balance owed to a lender. Though banks can be uncooperative on such losing deals, brokers admit that they are taking short sales on in the absence of all other alternatives.
Last, we turn to the suburbs, where a significant drop in sales volume, not to mention perennial competition from discount firms in the area and a high number of for-sale-by-owner deals, has caused some Long Island brokers to leave the field, at least temporarily, in search of more stable jobs and medical benefits. Even many who got new day jobs, however, have held onto their licenses and Board of Realtors memberships, hopeful that a few sales could come their way.