WEBVTT - Lack of Inventory Spurring Fast-Moving Real Estate

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stenovic on Bloomberg Radio. Hey Katie and

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<v Speaker 1>if you saw this, a story caught our attention. Um,

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<v Speaker 1>it's about Greenwich home listings plunging to a record low

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<v Speaker 1>in the fourth quarter. So we've seen kind of a

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<v Speaker 1>buying frenzy in Greenwich, but apparently it's slowing down big time. Yeah,

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<v Speaker 1>it's interesting to finally see some of that. I mean,

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<v Speaker 1>you have to wonder, um, if it comes back to

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<v Speaker 1>supply because I mean that has been a theme in

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<v Speaker 1>the housing market that demands there there's just not enough

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<v Speaker 1>houses to tell. Well, let's see what our next guest

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<v Speaker 1>has to say whether her she's running out of supply.

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<v Speaker 1>She has been involved in selling homes for three decades

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<v Speaker 1>and apparently spent some time in a flight with our

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<v Speaker 1>co host Tim Stenovic and his one year old son

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<v Speaker 1>at the time. I believe it was a red Eye

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<v Speaker 1>and Tim says she was a gem. Uh, I made

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<v Speaker 1>the flight so much easier. Let's bring in Louise Phillips

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<v Speaker 1>Forbes real estate broker at Brown Steven's excuse me, Brown,

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<v Speaker 1>Harris Stevens. She has achieved than four and a half

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<v Speaker 1>billion in sales over her career and closing as many

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<v Speaker 1>as two hundred deals in a single year. She judge

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<v Speaker 1>us on the phone in New York City, H Louise,

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<v Speaker 1>so nice to have you here with Katie and myself.

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<v Speaker 1>And Tim does send his regards and was very sorry

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<v Speaker 1>that he couldn't be here. Well, it is all good.

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<v Speaker 1>I am grateful to have a little girl gang today. Him.

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<v Speaker 1>Deal deal deal. Hey, listen, you have seen a lot

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<v Speaker 1>of real estate cycles highs lows. How would you describe

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<v Speaker 1>the cycle that we are in right now? What are

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<v Speaker 1>you seeing specifically from your client base? And and do

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<v Speaker 1>you have enough inventory? Absolutely not in you know, in

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<v Speaker 1>the middle of the pandemic. Uh, nobody ever thought that

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<v Speaker 1>we would be saying that, whether it's a rental townhouse

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<v Speaker 1>or development project. Um, and I will say that it is.

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<v Speaker 1>It is, you know, exciting to sort of watch this

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<v Speaker 1>fast moving market because of lack of inventory. And at

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<v Speaker 1>what point does this turn into almost a buyer's strike

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<v Speaker 1>that Okay, there's not an an inventory. You're seeing prices

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<v Speaker 1>skyrocket one. Does demand simply cooled down because prices on

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<v Speaker 1>these homes are too high? Well, even you made an

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<v Speaker 1>observation earlier and you're you know, talking about the prices

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<v Speaker 1>plummeting and primage and you know, honestly, I think that

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<v Speaker 1>is a very UM, I would be careful to to

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<v Speaker 1>to be reporting. The numbers are the numbers. But also

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<v Speaker 1>you have to remember sometimes you get things picked over

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<v Speaker 1>and the cream of the you know, the best of

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<v Speaker 1>the best is selected. And when you have something that's

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<v Speaker 1>been dormant or not on the market, you bring it

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<v Speaker 1>on and you try to capture your next door neighbor's price,

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<v Speaker 1>which is a very different asset. Well, it's interesting, all right,

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<v Speaker 1>So talk to us about you said you don't have

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<v Speaker 1>enough inventory. Um, it's kind of exciting to watch this

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<v Speaker 1>fast moving market. Um. Because of that, So who's buying?

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<v Speaker 1>What's the movement we're seeing? What kind of properties are

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<v Speaker 1>you seeing being bought? So tell us a little bit

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<v Speaker 1>about it. Well, I think, what's of the thing that

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<v Speaker 1>is so exciting? And again, in three decades, I've had

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<v Speaker 1>my seatbelt fastened. After September eleventh, after the financial crisis,

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<v Speaker 1>a global health crisis is a very different recovery, and

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<v Speaker 1>nobody knows psychologically or financially what that's going to look like.

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<v Speaker 1>So my experience is that we are witnessing across almost

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<v Speaker 1>every sector, whether it's a fifty seven million dollar deal

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<v Speaker 1>at Central Park South, two of first time buyers purchasing

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<v Speaker 1>and can afford to actually own cheaper than what it

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<v Speaker 1>costs for them to rent. Is it spectacular thing to

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<v Speaker 1>experience the buyers who are go ahead, no, you go

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<v Speaker 1>ahead please? Well, I was just going to say that.

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<v Speaker 1>I think it's also in the last six months, I

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<v Speaker 1>have watched the toes poking with our foreign buyers, and

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<v Speaker 1>I think they're going to be seizing our development opportunities

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<v Speaker 1>that have been lagging, the projects that had the last

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<v Speaker 1>ten or of their projects. They're going to be absorbing those,

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<v Speaker 1>and uh, I think that's something that we're I'm already

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<v Speaker 1>experiencing that doom deals from South Korea, Mexico, London, people

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<v Speaker 1>coming back to the market. And I want to wrap

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<v Speaker 1>in mortgage rates to this conversation, you know about home buying,

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<v Speaker 1>because you are seeing mortgage rates really start to move.

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<v Speaker 1>Just in the past couple of weeks. I think a

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<v Speaker 1>thirty year loan the average rate is now just about

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<v Speaker 1>three point six per cent or somewhere under it. Uh,

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<v Speaker 1>you know, people see mortgage rates going higher and they

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<v Speaker 1>get a little bit nervous. Uh. Carol already knows that

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<v Speaker 1>I am certainly not looking for a home right now.

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<v Speaker 1>I would like to one day. I mean, for you know,

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<v Speaker 1>potential first time home buyers looking at these rates, I mean,

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<v Speaker 1>do they should they lock in a mortgage now? Are

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<v Speaker 1>rates only going higher? I think that would be fair

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<v Speaker 1>to say. I mean, I came into the business thirty

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<v Speaker 1>two years ago in interest rates with twelve point four percent,

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<v Speaker 1>So for me to sorrow a hundred thousand dollars, it

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<v Speaker 1>was about twelve hundred dollars a month, and today you

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<v Speaker 1>can get for less than four hundred dollars a month

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<v Speaker 1>a hundred thousand dollar mortgage. So I think that the

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<v Speaker 1>buying power is one of the things that you know,

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<v Speaker 1>when you have a crisis, which we've been in. Our

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<v Speaker 1>government has like utilized the interest rates to fuel our

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<v Speaker 1>economy and it has done so. It's got people off

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<v Speaker 1>who saved all this money during the pandemics. God knows,

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<v Speaker 1>we didn't go anywhere, and we saw the refinance and

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<v Speaker 1>the origination of the mortgage is to be one point

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<v Speaker 1>six one trillion, and we're projecting more than that for two.

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<v Speaker 1>But we'll see its interest rates will become those climbing

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<v Speaker 1>if that's going to scare people off or create a

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<v Speaker 1>sense of urgency. So as a it sounds like to

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<v Speaker 1>blue New York, or at least you've been here for

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<v Speaker 1>a long time, you know, in terms of the cries

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<v Speaker 1>of okay, the big urban areas, nobody wants to live

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<v Speaker 1>there anymore because of work from home. I talked with

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<v Speaker 1>Chuck Robbins of Cisco. They've been hybrid pre pandemic, and

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<v Speaker 1>you know that was he says one of the things

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<v Speaker 1>pandemic that one of the great advantages is that you

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<v Speaker 1>can work anywhere and you can hire employees who want

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<v Speaker 1>to live anywhere. Um, what of the pandemic that was

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<v Speaker 1>changing the housing market in a city like New York. Well,

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<v Speaker 1>for for true blue New York is like myself. Those

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<v Speaker 1>people who you know bought my house in Woodstock or

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<v Speaker 1>tried to buy my health in mom Talk or the

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<v Speaker 1>Hampton's in Bridge, Hamptons. You know a lot of people

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<v Speaker 1>fled and they're like, holy moly, it's winter and what

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<v Speaker 1>am I doing here? Nobody's here, or they really are

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<v Speaker 1>missing the pulse of the city, and I do believe

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<v Speaker 1>that we have been experiencing and you can see from

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<v Speaker 1>the surge of the transactions last spring, we couldn't even

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<v Speaker 1>process the deals fast enough me it was and those

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<v Speaker 1>were people that were previous owners in New York or

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<v Speaker 1>people who've been renting saved enough money and their first

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<v Speaker 1>time buyers um the the So so I believe that

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<v Speaker 1>we are going to And again, if we talk about

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<v Speaker 1>work from home, I mean I'm married to a serial entrepreneur,

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<v Speaker 1>and yes, there are a lot of people that can

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<v Speaker 1>utilize hiring in New York, local tech firms that can

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<v Speaker 1>hire people in other areas. Luis like Karen I were

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<v Speaker 1>talking about commercial real estate really interesting time with this pandemic.

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<v Speaker 1>What's the future there because you know, as we were saying,

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<v Speaker 1>a lot of behaviors have changed when it comes to

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<v Speaker 1>where people are working, where people are shopping. You know,

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<v Speaker 1>I'm not an expert at commercial but what I am

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<v Speaker 1>an expert is at people. And commercial deals are going

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<v Speaker 1>to bring people um continuously. And if you look at

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<v Speaker 1>venture capital money that we all invested in local tech

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<v Speaker 1>firms in New York, including my husband's company. You know

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<v Speaker 1>last spring they closed over twelve billion of local tech

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<v Speaker 1>venture capital money that is going to bring people. And

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<v Speaker 1>you look at companies like Noon, I mean, I've never

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<v Speaker 1>heard of Noon. Three years ago, they took a hundred

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<v Speaker 1>and fifteen thousand square feet from Brookfield. Take a look

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<v Speaker 1>at the top Big four Amazon, Facebook, Google, Apple, they

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<v Speaker 1>gobbled up three million square people, three million square feet.

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<v Speaker 1>And what that brings is people. And we're projecting. Listen,

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<v Speaker 1>during the heart of darkness, I saw probably every appointment

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<v Speaker 1>downtown in the East Village with somebody relocating from l

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<v Speaker 1>A or San Francisco, um from tech firms to New

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<v Speaker 1>York and they want a piece of the Apple. Well

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<v Speaker 1>at the same time, Louise, what we are also seeing,

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<v Speaker 1>you know, it's not just Dilon Musk who's moving to

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<v Speaker 1>us in or who's moving to other places in Texas,

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<v Speaker 1>or financial firms moving to Florida. We are seeing, you know,

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<v Speaker 1>for a society in America that hasn't moved around a

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<v Speaker 1>lot in the last few decades, they've kind of stayed put.

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<v Speaker 1>We are starting to see more movement. What are you

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<v Speaker 1>seeing along those lines when it comes to your market,

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<v Speaker 1>your residential clients. I mean, listen, that we have been

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<v Speaker 1>hearing about up everybody's moving to you know, it's going

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<v Speaker 1>to be like many Miami is going to be a

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<v Speaker 1>little New York because people are wanting to benefit from

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<v Speaker 1>lower taxes. And I think that's going to absolutely that

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<v Speaker 1>is going to be normal sort of uh transitions that

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<v Speaker 1>we're going to experience. But listen, I think tech is

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<v Speaker 1>ten point five percent of our GDP across the nation,

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<v Speaker 1>and it's going to continue to affect and drive other cities,

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<v Speaker 1>whether it's Portland, Oregon, Austin, Texas, Nashville, Tennessee. I mean

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<v Speaker 1>it's had over twelve percent growth year over year. I'm

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<v Speaker 1>from Nashville. I don't even recognize it. And I think

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<v Speaker 1>that there's enough for all of us to continue experiencing

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<v Speaker 1>this wave. And people are gonna look for a lifestyle.

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<v Speaker 1>It's just gonna be what's an opportunity for one, and

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<v Speaker 1>what's right for one might not be right for another individual.

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<v Speaker 1>But companies are going to be looking for opportunities. You know,

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<v Speaker 1>we could look at Amazon as a case study that

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<v Speaker 1>we didn't get that big deal that they were trying

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<v Speaker 1>to put together, but they still bought a big asset

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<v Speaker 1>um in the building and they are they are bringing

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<v Speaker 1>thousands of employees here, and Luise, We've talked a lot

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<v Speaker 1>about buyers, but I want to talk about the other

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<v Speaker 1>side of the deal, the sellers. I'm curious, have you

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<v Speaker 1>seen people you know, choose to sell their their house,

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<v Speaker 1>their property now just because the market is so hot?

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<v Speaker 1>And I mean, we've been talking about the fact that

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<v Speaker 1>there isn't a ton of supply of houses right now

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<v Speaker 1>for for a while. Now, I feel like, you know,

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<v Speaker 1>it's it's really become a part of common conversation, even

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<v Speaker 1>outside of Bloomberg h Q. So I'm I'm just wondering

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<v Speaker 1>if that's motivated brought some sellers off the sidelines. I

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<v Speaker 1>think about my experience and what I'm witnessing and the

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<v Speaker 1>conversations that I've been having since the peak of the pandemic,

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<v Speaker 1>when people were not sure should I say or should

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<v Speaker 1>I go? Um that we are now clearly have a

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<v Speaker 1>lack of inventory, and that they are owners that we

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<v Speaker 1>are hoping. I'm hoping that I have them now ready

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<v Speaker 1>emotionally financially to seize the moment because it is their market.

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<v Speaker 1>You know, they can call the shocks a little better.

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<v Speaker 1>They still have to be priced properly. Because the market

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<v Speaker 1>is still incredibly efficient and those houses in Grinage might

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<v Speaker 1>not be selling because actually they're just not worth it. Okay,

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<v Speaker 1>hey listen, great to check in with you. Louise Phillips,

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<v Speaker 1>Ford's real estate broker at Brown Harris Stevens joining us

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<v Speaker 1>on the phone in New York City. Uh. Fascinating to

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<v Speaker 1>hear that it's a pretty dynamic market and we know

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<v Speaker 1>that they're still building going on. Oh yeah, it's just

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<v Speaker 1>I don't know, it seems like houses they take a

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<v Speaker 1>while to build. Uh, when at what point does we

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<v Speaker 1>we do see this supply Kurne get alleviated. Have to

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<v Speaker 1>think it's a couple of years. Yeah, exactly,