Location: About your new market report with PropertyShark, is this an attempt to challenge the Douglas Elliman-Miller Samuel juggernaut or to gain greater name recognition in the industry?
Ms. Liebman: The Corcoran Report, which we started in the ’80s, was actually the first report to ever come out in Manhattan, so we had a great head start in market reports. Our relationship with PropertyShark was more about getting as much data as possible, because to me, the market report should have as much clear information as possible for any buyers and sellers, so we want to put forward the best data that we can. Now, our report is not really a subjective report, it’s based on closings; and since we have the most up-to-date closings as anybody, we think we provide the most comprehensive report out there.
Is your data any different?
We all get the same data, but we get it at different times. We may get the new development closings earlier than someone else, and other companies may get other things sooner than we do, but this information has become a lot more transparent now, so I think over time that the reports should be just more and more similar. I have a great respect for Jonathan Miller, and he and I talk every quarter about reports and market information in general. I don’t look at our report as a marketing tool; to me, it is a service. I’m just trying to give people the best report they can get. And I also want my agents to have the best data possible. So going to a company like PropertyShark that is a data aggregating company only enhanced our report. And to a certain extent I think it adds credibility to the report because PropertyShark is a disinterested third party.
Tough times likely lie ahead for the real estate industry. As head of a company with thousands of employees, are you taking any steps to anticipate what is coming?
We’ve been preparing for quite a while now. During 2007, we realized this was potentially at the market’s pinnacle and we took steps to act responsibly, and we will continue to do that. We never really got fat in the best days, so it’s not like we have all this shedding to do, but we certainly look at all avenues of our business and where we can enhance revenues. Where we can drive revenues we will do that, and if there is areas where we can alter spending, we will do that as well; it would be foolish not to.
Are there any specific branch closings or broker layoffs in the works?
Every year we look at all of our offices in Long Island and New York City; and if it makes sense to do a consolidation or not have an office in a certain place, we will do it. Recently, we closed our office in Hampton Bays, which was a very small office. Most of the deals we did were in areas that had other offices anyway, so it just didn’t make any sense to be there. We don’t foresee closing any offices in Manhattan; all of our offices are extremely strong performers and we have very strong brokers. We have always held our brokers to a very high standard, and we don’t keep brokers around who don’t cut it.
How are your brokers doing? I would imagine it’s difficult out there in a slower sales environment.
Well, I think it is our responsibility to help these brokers meet the changing market. We have a lot of seasoned brokers at Corcoran, and they have been through shifting markets before, but it never hurts to give them a refresher and also to help train some of the new people. We are doing a lot of things. We are saying that the volume of sales in Manhattan is down, so there is going to be a smaller pie out there, but we want you to get a bigger piece of it.
Not every broker is going to make it through this market, that is for sure. If the reports are showing 20 percent less deals, then not every broker is going to do as many deals, but some will end up doing more; and it is my job as leader of this firm to make sure it’s the Corcoran brokers that gain market share during this period.
Why haven’t prices dropped yet?
I think it’s important for people to understand that these reports are based on data that has happened in the past. None of the reports are reflective of what is going on today. Many of those numbers are from new development closings that were done a year ago or 18 months ago, or sales that were done in the spring.
But even by last spring the economy was starting to slow down.
Well, I think you see that in the volume of sales, which is down. But nobody was giving anything away. I mean, this is New York; typically values don’t just drop overnight like they do in the stock market. What I have explained to a lot of people is that a rising tide carries everyone with it, so any apartment—regardless of quality or even location—was dragged along in this great real estate upswing. Today, every property has to stand on its own, and the less attractive apartments are no longer going to benefit from this upswing in real estate, and that is where you will see prices really start to come down.
Do you have a timetable for when this might happen?
I think you are going to see some softening in the next quarter, in the fourth-quarter reports. There has already been some, if you look quarter over quarter. But remember, there are so many trophy apartments that closed this year, and this has really pushed the average sales price up. Everyone talks about 15 CPW and the Plaza, and there were lots and lots of deals above $10 million that have really driven up the average sales price. It was a record-setting year for that; 2007 and 2008 were huge years for these super-luxury apartments, and we won’t see that volume of sales above $10 million in 2009 that we have seen in the past. The mix of apartments will switch, and that will pull the average price down.
What do you think will happen in the luxury market?
I think that market will still do very well. The brokers who work that end of the market are all saying that there is a lack of really good inventory, but no shortage of clients who would happily write that $20 million check. They just can’t find anything to buy. So a great number of luxury properties will still trade, but we don’t tend to see more than a handful at a time; 15 CPW, the Plaza and 995 Fifth being on the market at the same time was very unusual. I think if the product is there, the prices will remain strong and the buyers will be there.
As someone involved in the real estate industry, what do you make of how the press is reporting on the economy and real estate right now? Is the press a problem?
It’s not a help, that’s for sure. The problem with the press is that they like to report negative stories. I remember after 9/11 when the press was jumping on stories about people running from the city and fleeing to the suburbs—New York was over, Tribeca was over. And it simply wasn’t true. After 9/11, the city’s real estate market stood still for about four weeks and then it just took off.
I was doing a story with a reporter from The New York Times about how many sales we were doing, and I had to actually bring her up to my office and show her the files in my computer and show her the positive trends that were going on in the real estate market. It’s very easy to get depressed, believe the negative and overlook the positive. Nobody wants to read good news.
Is the press missing anything?
I think they are missing that it is a great opportunity for buyers to get in there, although some people are writing about it. I just think that the press has been talking about a real estate bubble for years now, and we are just now starting to see some softness in New York, and they are just piling it on.