Viewing by month: March 2009

Top 10 Billionaire Cities

Following on from yesterday where I looked at the top 10 cities for investors, I thought I might have a look at where I should make my next move, should the desire to country-hop take hold of me. The obvious list of choices was of course the top 3 cities occupied by billionaires. Where else would I feel at home? Looking at where billionaires choose to call home is interesting. Some are of course tied to their home countries, but others have sought real estate away from their native shores.

 

The number of billionaires this year has slipped in line with the economic downturn, which isn’t all that surprising. I wonder how hard it is to cope with slipping from billionaire status to plain old millionaire status? Also not surprising is that a couple of the cities people should be investing in also house some fairly affluent people, number one of which is New York, a city home to more billionaires than any other in the world.

 

New York actually lost the title to Moscow last year, but has regained its status despite losing more than a fifth of its billionaires. The city now houses 55 billionaires within its borders as opposed to last year’s 71. Moscow is still home to Russia's richest man, metals mogul Mikhail Prokhorov, who is worth $9.5 billion but this city lost two-thirds of it’s loaded population and only has 27 billionaires in its midst.

 

London also remains in favour with the richest of the rich and continues to attract wealthy folk from other countries, like Indian citizen and steel magnate Lakshmi Mittal, Russian oil and chemicals tycoon Leonard Blavatnik and Dutch Heineken heiress Charlene de Carvalho-Heineken. In total London houses 28 billionaires.

   So, if you want to choose real estate like a billionaire, investing in one of these three cities is possibly a good place to start.


0 comments | Posted by Charles Tarbey on 31/03/2009 at 8:03 AM | Categories:

10 Cities Investors Will be Targeting in 2009

There's a lot of talk in the industry that when it comes to real estate, things are beginning to turn around. A lot of properties in the higher end of the market are beginning to sell as buyers other than first home owners make their way back into buy and sell mode. Although suburb by suburb the impact of the economy varies greatly, there are always those key cities that investors target. They too vary from time to tome, but similarly to the top ten places people love to live, they don't change to any great extent.

According to the Association of Foreign Investors in Real Estate (a research association that tracks where member investors are finding the best opportunities around the world) the latest list of the world's best real estate buys has emerged. The AFIRE surveys its 200 members, who collectively hold US $700 billion in cross-border real estate, to come up with the list. It's not a massive group I admit, but that is a pretty large dollar figure so I'm prepared to take on board what they have to say.

Drum roll please, and get your passport ready...according to this highly affluent group, the countdown of the top 10 cities that investors will be targeting in 2009 are as follows:

10. Singapore Singapore jumped in rank from 24th to 6th between 2006 and 2007 but the city with the world's biggest port is likely to suffer when the global economy does, and that's what's happened. Worldwide the shipping and supporting sectors of office and commercial space have slipped but the city is still seen as a strategic link in Asia Pacific with a good chance of rebounding.

9. Houston Despite commercial rents decreasing across America, Houston, Texas' market has actually improved. Most US cities peaked in 2007 and 2008 but then the economic downturn returned prices to 2006 levels. In Houston's case, and specifically in the office market, prices increased a massive 36% according to Newmark Knight Frank (a UK property investment firm). The city continues to attract new residents and Texas' low business costs make it an attractive place for corporate relocations, which require real estate.

8. Paris Paris commercial properties have one of the lowest vacancy rates on the continent at 5%, and according to Knight Frank, residential prices were up 2.8% last year. Although prices are expected to flatten and perhaps dip, it does not look like a market primed for the same sort of collapse that has been seen in other countries around the globe. And who wouldn't want a property in Paris, really?

7. Including this city seems like a bit of a bad joke considering LA is one of America's hardest hit subprime areas. Despite having one of the nation's highest foreclosure rates, destroyed property values and flatlining consumer spending, there as bee n a recent flurry of transaction volume in the residential sector with sales surging 102% which hints at a market that has hit the bottom already.

6. San Francisco Now is apparently the time to leave more than just your heart there. Residential prices in San Fran's metro area have falled by 25% in year over year terms according to the National Association of Realtors. On the commercial side, technical and financial service firms have been downsizing their operations but that comes in a year when 7 million square feet of new office space is projected to come onto the market. When considered together, these factors make 2009 a buyer's market.

5. Shanghai According to the Deutsche Bank, China is poised for its worst deflation in a decade, which makes Shanghai an attractive option for gettign discounted properties in a market that overheated in the last decade. Unless you believe China won't be important by the time the global economy bounces back, it's difficult to bet against a blue chip like Shanghai.

4. Tokyo After Japan's "lost decade" of the 1990s (a result of a speculative real estate bubble), Japanese investors largely avoided buying and issuing the subprime products flowing through American and European institutions. Since there are fewer unknowns in the property market, that makes Tokyo a safer bet when it comes to determining reasonable valuations.

3. New York City The New York residential market is usually considered almost bulletproof, but has recently started to see a downturn in prices. So much so in fact that organised property bargain hutning tours to even premium areas of the city have been organised out of China.

2. London Prices for homes and commercial properties in central London continue to decline, but even as England sits firmly in a recession, London is a market where investors feel safe making long-term plays and believe they can get reasonable discounts on price.

1. Washington D.C. Commercial and residential real estate both need low unemployment and strong job growth, and currently Washington, D.C. has the lowest unemployment rate in the United States. President Obama's stimulus package also means it's unlikely that government jobs and those that they support, will be leaving DC any time soon.


0 comments | Posted by Charles Tarbey on 30/03/2009 at 9:23 AM | Categories:

Is there such a thing as too PC?

I saw a very interesting property ad from the USA the other day, one which caused a bit of a stir with a newspaper over there due to its use of "forbidden" words. The ad read as follows, see if you can figure out what the problem is:

FAMILY FRIENDLY PARADISE
This exclusive Upper West Side three bedroom stunner has ample space for a nanny's room or home office for work at home professionals. Walking distance from Central Park. Amenities include playroom for the kids and a quiet private garden. Board approval required. No smokers or students allowed.

Appallingly, the problem isn't that I can't afford to put an offer on this great sounding pad. The problem is that laws like the Fair Housinng Act in the USA explicity prohibit the use of words like exclusive, private and family friendly when it comes to real estate ads. Some people believe that these terms could be used to discriminate against certain groups of buyers based on their occupation, gender, race, disability...the list goes on.

Now I'm all for equality - I make fun of everyone equally - but I tend to think that this PC business has been taken to the extreme. For example, if an agent writes a real estate ad that says a property is walking distance to public transport, does that real estate agent unwittingly enrage both those who are unable to walk and those who like to cycle? Where do we draw the line?

I can only imagine how exasperated those agents affected by these rules must feel when trying to write ads that will still convey the right message to the right buyers. Selling property is hard enough at times without these added restrictions! I like to think we're a little more relaxed in Australia, and considering that not so long ago our entire international marketing campaign was based around asking "where the bloody hell are you?", I suspect that we may still be seeing highly offensive terms like "no pets" and "family friendly" in our real estate ads for a while yet.


0 comments | Posted by Charles Tarbey on 27/03/2009 at 8:41 AM | Categories:

Success is not an accident

I’ve blogged before about the importance of professionalism in the real estate game, and how at CENTURY 21 Australia we pride ourselves on our level of expertise and how this is delivered. In any walk of life, how you handle yourself is (more often than not) intrinsically linked to your success. Success is not an accident – it happens on purpose, when you make it happen.

Being a success in the real estate game is down to hard work and passion. When it comes to this market, it has always been incredibly important for an agent to communicate their value to a prospective seller. Regardless of whether or not the market is booming or faltering, it is an agent’s professionalism and expertise that will win business and create success. Some may think that a property boom means agents don’t need to try as hard to work for their clients, but when there is so much choice out there, the opposite is often true. Similarly, when times are tough, sellers know that there will be others vying for their listing should their chosen agent let them down.

In a nutshell, an agent can never cease to do their absolute best for their customer. Again as with many aspects of life, to be a success, it is imperative in this industry that agents continue to learn. No matter how good an agent is, there is always someone better. An agent should be seeking these people out to try and share in their knowledge. It’s important as an agent to know what trends are taking place, how many days on market is the norm for a suburb and average listing prices should be top of mind. It’s not hard to do – use online tools, attend seminars, network with leaders in the industry and more importantly – get out there and see houses! Lots of them!

Success is earned and success is created. To be successful in real estate, there are a few key questions an agent should ask themselves, and a customer should be asking of their agent. The biggest question is: are you passionate about what you do? Are you prepared to use that passion to make yourself a success? Are you proactively seeking success by being the best at what you do and by continually learning, or are you hoping someone else will help you along? Do you have a professional opinion that you can actually substantiate with data, facts, figures and statistics?

If the answer to any of these questions is no, then the million dollar question really becomes why are you in the business?

 
0 comments | Posted by Charles Tarbey on 26/03/2009 at 8:56 AM | Categories:

Sinking Markets - literally

My blog about the influx of students into real estate training in the USA last week must have got my mind onto international property because my thoughts started wandering around the globe last night as I was drifting off to sleep. It landed in Venice for a while and because I was discussing New York yesterday, my mind ultimately ended up there again, and I realized there is an unusual similarity between the two places. Both are sinking, and I don’t mean the property values. I mean literally. 

 

Of course being in real estate, I started to consider how this affects those who live there and their real estate market. The concept of the sinking of Venice is nothing new - it has long been discussed and addressed by the city. It’s the combination of the weight of the buildings driving the pilings holding up the city into the seabed and the rising of the surrounding water level which has seen many residents actually leave the city. Tourists still flock there, but the population of the city has more than halved in the last 50 years – imagine working in that real estate market! There are still around 60,000 people on the city of islands, which is a lot of people not prepared to up and leave what is still an incredibly beautiful place to live. 

 

Upstate in New York, residents in the Hamptons are finding themselves in a similar position, but for different reasons. Severe erosion resulting from high winds has meant that beachfront homes in the Hamptons hamlet of Wainscott are slipping into the ocean. As the situation stands now, ocean waters have wiped away so much land that many of the houses sit just feet from a sheer drop where the dunes end and the beach begins. Some properties already sit with foundations exposed. Also similarly to Venice, the issue appears to be an ongoing one and the erosion is predicted to continue. 

 

Isn’t it amazing how we continue to live in places despite the obviously negative end results of doing so? Not only are places like the Hamptons and Venice gradually finding themselves underwater, but the likes of San Francisco is bracing itself for its next earthquake, an earthquake expected to be larger than the city is prepared for. And yet the residents joke about it and go about their daily lives, knowing disaster is inevitable but not being prepared to leave the city they love. It just goes to show that for many people their place of residence is intrinsically linked to who they are, and that’s one of the reasons I love this business so much. Real estate is about much more than bricks and mortar, it’s actually all about people.  
0 comments | Posted by Charles Tarbey on 25/03/2009 at 8:26 AM | Categories:

Is Competition Really a Good Thing?

Yesterday I waxed lyrical a bit about my feelings regarding team building, and the competitive nature of most team building exercises. I don’t want anyone to think that I’m not all for healthy competition – in fact, the real estate industry is one of the most competitive I’ve come across as I discuss on Monday! - and I was thinking about this last night, so I’ve decided to write more about it today. 

 

Competition is a sign of passion, which is both valuable and necessary in the workplace, and that’s why most team building activities revolve around it – the desire to win makes staff focused and active, and that’s generally what management wants to see. My point remains however, that it’s what you want to see from people in their everyday work, not when they’re beating the living daylights out of each other with an inflatable baseball bat while they’re navigating a plank of wood balancing over a swimming pool.  

 

Most organisations work to targets, whether they be performance or sales based, and this creates competition. We do the same at CENTURY 21. There is a very specific set of criteria in place that rewards those who achieve certain levels of performance, whether from sales, community involvement, adaptation of new technologies etc. Putting measures in place to encourage staff to achieve goals is certainly a form of competition, but from what I can see, there are a few key issues with introducing a heightened level of competition into the workplace. What I mean by that is pitting employees against each other in order to introduce the level of passion you actually want to see in their work. 

 

Here are my biggest issues with competitive events: 

 

Firstly, as much as it makes me sound like a stick in the mud, can I just say that many are a total waste of time. As I said yesterday, I’m all for Friday drinks or the regular staff BBQ, but spending half a day running around a paddock with paint guns is not actually helping your business, and its not helping employees interact with each other in a helpful and mutually beneficial way. Amazingly, most employees actually want to do good work, and many would rather take part in an activity that helps them grow professionally or gives them information they can actually use in their jobs. 

 

Secondly, it has the potential to bring out the worst in people. I read a wonderful little tale about a CEO who was on the brink of hiring someone, but just wasn’t 100% sure. So, he invited the candidate to a company softball game where the prospective staff member carried on like a right banana, abusing the referees and his opponents and yelling at his own team. He was basically competitive to the point of being manic, and he was not employed. 

 

Finally, it’s been studied and proven that people actually learn less when they’re competing, and cooperative environments are more conducive to achievement  Cooperative learning has been studied in classrooms, and one 10 year old described this method of working in a quote I don’t think I could alter to be any more apt: “It’s like you have four brains.”  

 

Now apply that to however many brains you actually have in your office and it’s indeed a powerful machine!  
0 comments | Posted by Charles Tarbey on 24/03/2009 at 8:39 AM | Categories:

Building Staff Morale

There’s no denying that staff morale is a big factor in productiveness and corporate culture. In most organizations, regardless of size (unless you work alone of course), you are probably going to encounter personalities that may not match perfectly with your own. And you not only have to deal with that, but you also need to get along. The real estate game is no exception. 

 

In my role I oversee a state and national office full of individuals with individual personalities, and then of course every CENTURY 21 franchisee in this country is managing their own business where another group of different people need to collaborate every day. Managers are acutely aware of the issues that can arise when a group of possibly very different people need to come together and function as a team, or at least they should be! The need to get along for the greater good of a business is what has spawned the team building phenomenon, and I have to say it’s a concept that I consider with more than a touch of bewilderment.  

 

I find the best way to build morale amongst my team is to stay out of the office as much as possible, but it seems many a corporation out there insists on bringing their staff together in a range of activities ultimately designed to build camaraderie, but which often result in a winners versus losers situation. I for one do not see how pitting the staff you want to get along with each other against each other is going to have a positive outcome. Surely in no work environment is it a good idea to highlight the “losers”, which essentially is the outcome of the majority of team building exercises. 

 

Did you know there was once a team building exercise run by a Californian home security company (Alarm One Inc) which resulted in a court case after the employees actually sued the firm! So much for everyone loving a team building exercise. The “team building” in question was essentially a contest pitting sales teams against each other, during which rival teams were swatted with the company’s yard signs (on that note - can you imagine CENTURY 21 real estate agents beating each other with our yard arms?? We’d be up for murder!) and the losers were then forced to eat baby food and wear nappies. The result? The employees sued, and the company was forced to pay them $1.7 million (USD). Not exactly a great day of morale building!  

 

It’s great to have a feeling of competition in the workplace, but it should be a contest for your staff to do their best, and a feeling that’s pitted against your real competition out in the marketplace – not against each other internally. Encouraging activities when some employees are made to feel lesser than their coworkers is likely to have the exact opposite effect of what you were trying to promote in the first place. 

 

At the end of the day, you can’t force people to like each other, but you can encourage a feeling of teamwork and cooperation through communication and non-competitive team building activities like a staff BBQ – inflatable Sumo suits are rendered totally useless! Knocking off an hour early for Friday drinks (with responsible service of course) can also do wonders to get departments together and it gives employees the opportunity to interact in a non-threatening and social environment. 

 In fact, I might just tell everyone to knock off for a brewski now!   


1 comments | Posted by Charles Tarbey on 23/03/2009 at 8:30 AM | Categories:

Hide and Seek

I have talked before about the importance of communication when it comes to the real estate game, despite the fact it may not be easy. I have a lot of contact with agents and salespeople, and although I’m happy to say it didn’t come from anyone in the CENTURY 21 network, I did recently have a salesperson admit to me that they dread the sight of a particular phone number when it lights up on their mobile, and a certain name when it appears in their email inbox. I’m sure you can guess that it’s the number and name of one of their vendors.

As an agent, this is a terrible situation to find yourself in, and one that could ultimately end up in the vendor cottoning on to the fact they are being ignored (it doesn’t take much) and the listing could end up with a competitor. If the interactions are that stressful, a salesperson such as the one I was speaking to could possibly think losing that vendor isn’t such a bad thing, but losing anything you could have actively made work to a competitor is unforgivable, not to mention unprofessional, and is not likely to generate you any positive word of mouth or referrals. Suddenly answering the phone doesn’t seem like such a daunting task!

The key to dealing with what may be perceived as a challenging seller is knowing that their interactions with you are not due to a feeling of dislike, they just want to know you’re working hard for them to sell their home – possibly the most significant transaction they have undertaken. And this is completely understandable. Chances are their property is one of, if not THE, largest investment they have. Selling a home is a big deal and vendors can get anxious and unsettled and it’s understandable they’d like some regular contact and to be kept in the loop. When you’re dealing with property transactions day in and day out like we are in this industry, I have to admit you can become a little blasé at times about just what a large process this is. It is our job to make sure we never forget that, and you need to keep the seller’s feelings at the forefront of your mind. Easy ways to keep people informed are showing them the web hits on their property listing, point out other listings in their area to demonstrate competition or pricing differences, provide feedback from open homes, or just let them know there’s nothing new to report.

One agent I know likes to call vendors on a Friday to keep them aware that she will be working for them over the weekend, often she’ll actually drop by and drop off a bottle of wine for them to enjoy over the weekend as an early celebration of good news she is sure isn’t far off. This lady also sends hand written notes outlining what has and hasn’t sold, what’s new, and how many people have viewed their particular property online. Not only is that outstanding customer service, but its peace of mind for the vendor, and a guarantee that should they sell their next property, chances are they’ll go back to the same agent.  
1 comments | Posted by Charles Tarbey on 20/03/2009 at 8:45 AM | Categories:

A Vocation in Demand

Like many people with an interest in the real estate market, vested or not, I have been paying pretty close attention to what is happening to the industry both overseas and at home. I know I have already spoken of this many times, but I think it’s fair to say that it’s on a lot of people’s minds, particularly those trying to sell or buy, and especially those who work in the industry. 

 

As the General Manager for CENTURY 21 Australia, I have contact with around 300 Agencies nationally, and that number of offices means thousands of employees, all part of the network. These people each have their own take on what is happening and what’s going to happen in the marketplace, but the general feeling is a positive one, and I came across a news story recently that showed this to be the case in one of the hardest hit countries too. 

 

In the USA, the real estate market has seen dramatic price drops and real estate agents in many cities have watched as sales ground to a halt. Despite this, hundreds of New Yorkers are signing up to take licensing exams and join the ranks of agents. In the last weeks of 2008, New York administered over 700 licensing exams to real estate hopefuls, and they definitely have the can-do attitude required to succeed in this business. One of those demonstrating the ambition she’ll definitely need in the American property market was just 22, and I believe her quote should ring true for all of us in the industry when things are less than booming, even those of us who have been around for years: 

 

“They say the business is cyclical. I can gain experience now, cut my teeth in this kind of market, and when there’s an upswing, I can be an established agent.” 

That’s precisely how we should all be thinking, so if your Agent isn’t, I suggest you find one who is!  

 

 


1 comments | Posted by Charles Tarbey on 18/03/2009 at 11:32 AM | Categories:

Silence is Not Golden

Silence is not golden. Well, some silence is, like when the infant next to you on the plane finally stops screaming, but when it comes to real estate, especially when you’re a vendor, silence is definitely not what you want. 

 

It is often said that communication is the key to any successful relationship and real estate is certainly no exception. As a vendor, your relationship with your Agent is paramount, as is true vice versa. For this relationship to be successful, there must be open and honest communication, and I’ve blogged about the importance of honesty previously. As an Agent your livelihood also depends on your ability to build a relationship with the prospective buyers you come into contact with. Having a fantastic relationship with your vendor is marvelous, but it’s not going to count for much if every buyer you come into contact with ends up despising you. And if that happens, and you can’t sell the property as a result, chances are that will ultimately sour the great rapport you have with your seller too – it’s all a big communication circle. Almost makes you want to sit down and sing Koom Bai Ya, doesn’t it? 

 

An Agent needs to be motivated to maintain a relationship with their client over the long term. It is our job in this industry to assist people with the buying or selling of a property, and such a big decision with such involved and sometimes confusing transactions deserves the respect of clear, ongoing communication. Relationships with real estate clients need to be actively managed and maintaining the appropriate level of contact reassures clients that their best interests are your priority, and that you are forward thinking. 

 

Effective communication will also ensure that the person on the receiving end hears your message in the way it was intended. A well communicated message, even when the news isn’t the greatest, will be better received than a poorly communicated message. How often have you been told something, even by someone you really like, in a manner which made it almost impossible not to have an unfavourable response? Now imagine if the news was really bad AND you were being told it in an equally offensive way – me thinks perhaps clients may begin to look for alternate service providers! 

 

Ineffective communication is a major obstacle in almost every aspect of life. Well, clearly not for those silent monks in Europe, but for those of us in real estate we can never afford to lose sight of the fact that effective and most importantly, ongoing communication is king. Your clients, and your bottom line, will thank you for it.
0 comments | Posted by Charles Tarbey on 17/03/2009 at 9:36 AM | Categories: