“Market Data, Big Data, What Data” was the topic of discussion at StreetEasy and Related Companies’ NYC real estate panel today at MiMa in Midtown, attended by well over 350 New York City real estate agents and brokers.
Alan Lightfeldt, data scientist at StreetEasy, kicked off the event by presenting StreetEasy’s Q1 market report, which shows inventory in Manhattan is still strained, forcing prices to rise. While inventory was a hot topic during the discussion, the question of the day was what do you do with all the data that is available? Panelists on board to answers these questions included:
- Greg Heym, Chief Economist for Terra Holdings
- Ryan Serhant, Licensed Associate Real Estate Broker for Nest Seekers and star of Million Dollar Listing New York
- Shaun Anders, Licensed Associate Real Estate Broker for Douglas Elliman
- Julia Hoagland, Licensed Associate Real Estate Broker for Compass.
“There’s no more keeping data from people,” said Heym, who said Terra Holdings increased staff and added a data scientist to deal with the need to present more data to their agents and brokers.
All panelists mentioned using a variety of data to help analyze the market, but consistently, the most-mentioned sites included StreetEasy, ACRIS, REBNY, and their own internal brokerage systems. But, while the real estate data is plentiful, Anders said most clients have a hard time reading what it means. “Clients want to know and they are looking to us for answers. It’s up to us to paint a picture for them.”
Serhant agreed that it’s best for agents to pick and choose data to present clients because it can be overwhelming. “I see agents share everything, but that’s too much.”
For anyone who has pored over real estate data, the metrics can be far and wide. So, which ones matter most to clients?
Heym, who involves domestic and global metrics such as employment, the GDP and oil prices as part of his analysis, says, “One number doesn’t tell you anything. Two doesn’t tell you anything. You have to look at multiple data points to get a picture. That’s why we focus on economic data, too.”
For Hoagland, it’s part art and part science to meld together all of this information and “without both, it doesn’t work” she said.
New York’s inventory
Lightfeldt addressed New York’s available inventory problem, stating it is at its lowest point in five years, according to StreetEasy data, and asked when it will change course.
Serhant, who works with many new development projects, felt there is still a lot of inventory and also a lot “… is on the market that is not on market. A new development project is coming every single day. There is so much coming that it could correct the pricing structure right now.”
Heym chimed in that these are people who are looking at luxury development, which “doesn’t apply to most people” and you need to look at resale. “More inventory will help fix the market,” he said.
Of course, New York stands alone — or with several other powerful international cities, including London, Tokyo and Singapore — when it comes to savvy and sophisticated clients.
Anders said, “Our clients are very smart. I had a buyer who was watching the dollar and Euro. But, first-time clients want to know a little more. High net-worth clients are more cut and dry. They don’t have time for data.”
But Heym said it depends where they are. “We are in four states. You can’t be as sophisticated in areas where there is not enough data.”
Serhant agreed that “everyone is different and everyone is smart.” He has properties in London and Miami and they are like night and day. “Miami was looking at comparable active sales and London looked at resales.”
Advice for agents navigating a deal for clients
“Buddy up with an economist,” said Heym, amid laughter. He added, “Know where data is and what’s important. Know what goes into these numbers. Also, knowing what information can’t be seen is just as important. Understanding what it can’t tell you is just as important.”
Anders said “Don’t just trust one source. You need to look at different sources and check multiple places, then you’ll have confidence.”
Serhant said he relies on StreetEasy almost exclusively. “I use StreetEasy as my steroid. I also use Zillow and Realtor. This is how we work. This is not a secret anymore — it’s actively out there.”
“Embrace data or be buried by it,” concluded Lightfeldt.
But, what about comps?
While 3-5 comps used to be the go-to answer for how to price properties, it’s just not enough anymore.
Heym said, “The one thing comps can’t tell you is people’s moods (stock market can go down in one day, oil has dropped). There are more factors that go into it,” alluding to world events such as the Ukraine and what Congress is doing (or not doing).
Hoagland offered an anecdote on a buyer: “I worked with a buyer for 3 years. He was in finance. [For every property I showed him] he wanted to bid 10% below ask. Three years. Everyone wants a discount until they fall in love. Then he walked into a place and said, ‘Let’s bid at the ask.’ ”