Eugene is the Founder of The Litvak Team @ Compass — one of the top producing and largest teams at Compass.
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Anyone will tell you that I’m an unfailingly optimistic guy. I believe that we shouldn’t focus on things we can’t control, but only on the things we can. What’s wrong in the world is always available for us to dwell on, but so is what’s right. When I think of what’s gone right during our current circumstances, I think about the amount of time I’ve spent with my kids and how my connection with them has grown. And I think about how grateful I am for the opportunities I’ve had to help people through real estate. As one of my favorite mentors says, gratitude is all about having a great attitude. If you start from a place of gratitude, it’s really hard to fail.
Real estate activity in and around New York City is a microcosm of that found in many metro areas across the country. We saw a major exodus of people leaving for the surrounding beaches, mountains and suburbs, either temporarily or permanently, which has caused some of the hottest activity we’ve seen in those markets in decades. In great New Jersey neighborhoods just a few miles outside the city, we’re seeing multiple offers and bidding wars. Properties in Greenwich, Connecticut, are more popular than ever, and the pricey Hamptons have gotten even pricier on both the rental and sales side.
There is less demand in the city itself, but it’s picking up significantly as we continue to reopen carefully. Right now, what my colleagues and I have observed is that interest has shifted to different sectors in response to the current environment. Townhouses and large apartments with outdoor space are doing well. Smaller, reasonably priced homes are always in demand. Indicative of people’s desire for privacy and space, there is less interest in mid-sized apartments with inefficient floor plans and the roommate rental market.
Looking ahead in the sales market, I think the suburban hot streak will continue, but not indefinitely. There will be some price correction in the city, but not indefinitely. The few times in history we’ve seen New York City real estate go on sale, it hasn’t lasted long. At some point, businesses, services, schools and jobs will normalize, and people will be drawn back to the enduring allure of this city.
Turning to rentals, today’s landlords have a lot to grapple with. I know there’s an image of landlords as mustache-twisting villains sitting on bags of money. I’ve worked with hundreds of landlords over the years, and that huge misconception doesn’t consider the massive overhead and modest margins in many investment properties. Changes large and small — like the coronavirus or last year’s rent regulation overhaul — can have an outsized impact on their business models.
In many ways, we’ve been spoiled with more than a decade of consistent rent increases and super-low vacancy rates. That said, landlords will do best to get ahead of the market and use smart pricing or concessions to get good tenants into units. You can never get back one day of lost rent. Adjust expectations and price units to reflect the current circumstances. Make sure your marketing and salesmanship is top-notch so that you are reaching the demand that is still available. Overall, it’s important that landlords and investors realize that taking a short-term hit is far better than letting a bad situation get worse.
On the flip side, for renters, now’s your chance to get out there and get the home that will suit your needs in this new normal. It’s been a while since New York renters had this much control, so it’s a great time to get yourself comfortable or find a price that will allow you to save like never before. Once you do, lock in a two-year deal. As long as you approach landlords with respect, I think you’ll end up getting what you want.
For me, it all comes down to respect and kindness and looking at challenges from a different angle. No matter how difficult a situation is, no matter how hard or stressful, you can always connect with others and leverage kindness. To keep that positive mindset at the forefront, these 10 strategies from Strategic Coach can help us keep our eyes on the prize.
Over and over, I’ve found that entrepreneurs are among the strongest, most resilient resources in any situation. They’re used to being nimble, and they’re the first to come out of any challenge. With optimism and fortitude, real estate professionals have a major role to play in bringing the country back on track, no matter what lies ahead.
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