The Co-op and Condo Insider
The Co-op & Condo Insider is your trusted source for expert commentary led by advocates within New York City’s co-op and condo world. Each episode offers insights into the challenges, news, and stories that shape a community making up more than 20% of this great city’s residents.
The Co-op and Condo Insider
Getting the Deal Done in Today's Co-op and Condo Market with guest Alex Heydt
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Alex Heydt, a New York City real estate broker and co-founder of the Steiner Heydt Team, joins Geoffrey Mazel and Richard Solomon to talk about today's co-op and condo market, what buyers and sellers should look for, and what it takes to get a deal to closing. Heydt started in the business in 2008, fresh out of college and in the middle of a recession. He explains how working with renters during the downturn built the client relationships that still drive his sales business, and why the 2008 crash and the early months of COVID convinced him that the New York market always comes back. He also covers how technology has changed the job, from virtual tours and online board package platforms like Domecile to deals that close in 45 to 60 days instead of 90.
The conversation then turns to what brokers bring to a co-op transaction. Heydt walks through what boards typically look for, including a debt-to-income ratio around 30% and roughly 24 months of post-closing liquidity, and explains why the board package and cover letter are a buyer's first impression with the board. He compares it to meeting your spouse's parents for the first time. On the seller side, he talks about giving owners an honest price instead of telling them what they want to hear. He also shares his view of downtown Manhattan, from the West Village and Tribeca to Hudson Square, which he names as the next neighborhood to watch.
For co-op and condo owners, the episode covers legislation that is already changing transactions. Heydt calls the new 45-day co-op board review law a clear improvement for buyers and sellers, and Mazel explains how his co-op advocacy group drafted the bill a decade before it passed the City Council. Heydt argues the FARE Act has pushed rental prices higher as landlords build broker fees into the rent, and he describes the confusion among owners over the new pied-à-terre tax and its reliance on assessed values in the first two years.
The episode closes with Richard's lightning round. Heydt explains how AI is helping brokers rather than replacing them, and tells the story of a client whose apartment sold for $4.2 million against a Zillow Zestimate of $2.8 million. He also gives his read on the recovery of the Manhattan office and retail markets after COVID.
For anyone serving on a board, selling an apartment, or preparing a purchase application, this is a practical look at how deals get done in today's market and how new laws are affecting them.
Broker Fees And Rent Hikes
SpeakerI'm not paying that bill. I'm just gonna jack up the rent, $6,500, and that'll cover the fee. And now, in theory, the renter's still paying it. So I think in that bill was meant to protect renters not working with the broker to have to pay a fee, but in reality, they still are. They're paying it in the rental price.
Speaker 5We call that unintended consequences.
SpeakerI think it was an easy one to figure out.
Speaker 4But when have you not worked with the New York City legislature lately?
Meet The Hosts And Guest
Speaker 1This is the Co-op and Condo Insider, the podcast dedicated to New York's cooperative and condominium communities. This is your trusted source for the latest insights, strategies, and stories shaping the world of shared housing. You will hear from the people who are leaders in this community. Information and insights you will not hear anywhere else. If you want to stay ahead of the curve, you're in the right place.
Speaker 2The views and opinions expressed on this program do not necessarily reflect those of the host or any affiliated individuals or organizations.
Speaker 5Welcome to the Cult and Condo Insider. I'm Geoffrey Mazel, and I'm pleased to be joined by my co-host at the Mike today, Richard Solomon. Richard's a 25-year veteran of public radio. Richard has brought listeners from stories from around the world and around the corner. Richard, welcome today and thank you for joining us. Love being here. And today I'm very excited by our guest. We're joined by Alex Heydt, a New York City real estate broker and co-founder of the Steiner Heydt team. We're going to talk about today's co-op market and condo market, what buyers and sellers should look for and what it takes to get a deal across the finish line. Alex, welcome to the show.
SpeakerThanks for having me, guys.
Speaker 5Alex has worked in real estate since 2008. His team with Leslie Steiner focuses on Prime Downtown Manhattan real estate while covering other areas of Manhattan and Brooklyn neighborhoods. And I read that you you had more than did I see one billion of closed sales, or was that a type?
SpeakerAfter 18
Starting In Real Estate During 2008
Speakeryears, we've done a lot of deals.
Speaker 5Okay, congratulations on that. Thank you. So let's start from the beginning of your professional life. Uh you went to business in 2008 at an extraordinary time for real estate. What tell us about that time period, what was going on, and what lessons did you learn from that time?
SpeakerYeah, I entered, as you said, in 2008. I was fresh out of college, 22 years old, in a recession, no idea what I was doing. I had a cousin that worked at City Habitats, which is now part of Corcoran, as a managing director, and he actually was the one who suggested that I try out real estate and took a leap. 2008 was definitely an interesting time to get into real estate. I was not as involved in the sales market at that time as I am now, obviously, as a from scratch broker. So I was working mainly with rental clients, and I like to think that was a great time as a new agent to get into the market, mainly because renters are always a great access way to turn to buyers and build relationships. And I feel that 08 was really a good time to work with renters as owners were paying broker fees. So there was no uncomfortable conversation about the tenant paying me. So a lot of my clients now that are my top sales clients, I met in 08 and 09 in 2010. And I think what that time taught me is relationship building, customer service, and growing your network in markets that when it's a down market, that's a great use of your time. When sales aren't happening or sales are slow, there's always work to be done. And using your network, building relationships for when things turn is always a good idea.
Speaker 5I remember getting a phone call from a client who was actually about to buy, I guess, a car per con that I don't recall, and he worked for Bear Stearns. He called me up, he said, Bear Stearns is over. I said, Yeah, what does that mean? He goes, acting up my desk and get out of business. So we were panicking as real estate lawyers. Were the brokers panicking that sales are gonna be adversely affected for a prolonged period of time?
SpeakerSo I will say this. If I started 20 years earlier and 08 was my 20th year in industry, I could tell you I would be panicking. A lot of the brokers that I was working around at that time were explaining to me that nothing is selling. There's the buyers aren't out there, the sellers that are trying to sell can't find anyone for their properties. It was a scary time. I like to think I was shielded from it a little bit as a newer broker. But I think the closest market I've seen as a sales broker probably to that was COVID, those three months of COVID where the city just died out, people were panicking, the city's dead, no one's coming back. It's never gonna, we're not gonna be able to go out to eat. So now what do you do in the city if you can't go out to eat? So I think that 08 basically taught us that the city's resilient. There's always gonna be things happening and negative things in the economic and political climates that affect our markets. But it's New York City. People want to be here. The markets always rebound quickly. And I think 08 was the baseline for the next 18 years since we've seen a few different markets that the market will come back. It's inevitable. And people don't want to sell at a steep discount. Same with stock, right? They always say buy the dip. So I think the same goes for real estate. You don't want to panic sell. Buyers will always be there, just have to wait it out. But yeah, 08 was definitely a scary time. But again, this was pre-street easy technology, Zillow. You were basically living and dying on your company's website and Craigslist. So you you don't you didn't get information about how bad it probably really was if you think about it. If Twitter, Instagram, social media was where it is today, I'm sure the fear-mongering probably would have been a lot worse.
Speaker 5So let's let's go to that a little bit.
Technology Speeds Up The Deal
Speaker 5How has the technology, as we sit here on Zoom about to issue a podcast, was unthinkable five years ago? Has the technology changed what you do? And you certainly have a more educated client, I would make yeah, I would think. And has it changed your business?
SpeakerI think there's a few different ways. To start with the client side of it, covering more ground is definitely making our jobs much easier. You could be sitting on your couch looking on street easier, looking on a company website and do 15 virtual tours of properties, where in 2008 you had a broker sending you places or you were going website to website. There was maybe some photos, maybe not some photos, maybe a floor plan. So I think the ability to cover more ground in a short period of time technology has really helped with. From the actual broker, seller, condo, co-op side, how deals are done has also changed. Before COVID, you I'm sure you know this. When you're buying a co-op or condo, you got to do a board package and you need to make seven copies of a board package and put it together by hand. And it takes you probably a week and a half to do. Post-COVID, now co-ops have finally, and condos have finally decided hey, technology's here. Why don't we just streamline everything through a website and do it digitally online? That streamline deals much easier. You're able to have your clients, once they go to contract, go to a website like Domicile, upload all their documents, and then on that website, it creates the board package for you. So the way that you're able to interact with your buyers has definitely changed. The way you're able to provide sellers with information and reports and statistics of what's happening around them in neighborhoods in a very quick manner has changed. But also how you're getting deals done. Again, the deal process. Maybe when it used to take 90 days, now it takes 60 days or 45 days. So technology has really helped getting buyers into properties without physically being there, and also has helped deal flow not take as long from contract to closing.
Speaker 5And what has been the negative of technology, if any?
SpeakerI think the need for brokers technology has raised some questions that there's some buyers and sellers who think, oh, I don't need a broker, right? If you're a seller, I'm gonna do this on my own. I'm just gonna post some photos and post a description, and that's all brokers do anyway. And then they sit on the market for six months and they're wondering, what did I do wrong? So I think that the availability of information through technology and the internet has really, I don't want to say we're probably feeling it as much in New York as we are as they are maybe in outer markets, but I think that the negative effects are it does lead people to think that our jobs are easier now. So why should we be paid the same we were historically? But the reality is the job hasn't changed. People look watch these TV shows on Netflix or Million Dollar Listing, selling New York, these are all reality TV shows. They're not the real life of a broker. The real life of a broker, you would not want to watch on TV for an hour. It would probably be pretty boring to sit there and see what we're doing day to day. So I think that technology has definitely put an idea out there that maybe broker's job is easier, so they should be compensated differently. But when we speak to our owners, especially our sellers, it's not a thing. They understand what we're doing and they understand the value we're bringing to a deal. So I haven't seen that personally, but I know there are people out there who have dealt with that with conversations with their sellers.
Speaker 5And I know from my experience from a different end is as the co-op as as both a buyer-seller attorney, but mostly as a co-op attorney and condo attorney, brokers are essential because brokers are familiar with specific co-ops and condos and are able to navigate the process, which is much different, than if you're just buying a one-family house in Long
Why Co-Ops Need Broker Guidance
Speaker 5Island. Right. So explain that that aspect of it.
SpeakerCo-ops, co-ops are really the reason why the New York market didn't crash even further than it could have, because they have strict guidelines for how they're approving buyers. They want to see a certain debt-to-income ratio, which is basically if you're fixed debt of a mortgage, maintenance, you have a student loan, if that is more than 30% of your income, there's a good chance they won't accept you. On top of that, they want to see typically figure 24 months of post-closing liquidity. So they want to see that in your bank account, after you close, you're gonna have for all your fixed debt per month 24 months in there. So a lot of people don't know this. They just go into a co-op and they think that, hey, I like this place. They're not familiar with the process, and they put an offer in and then they find out all these details because they're maybe doing it on their own. They're not using the right broker, or the seller's broker just hasn't really advised properly. So I think with co-ops, knowing what you're getting into and knowing the dynamic of what you're buying and the restrictions is very important for buyers. And I think also for sellers, it's just as equally as important to make sure that your broker is also advising the market, whether it's a direct buyer or represented buyer, represented by a broker buyer, that there are these restrictions you have to abide by.
Speaker 5Again, just from my experience, which is pretty vast at this point in my life, most of the rejections and banned applicants are people that come in without brokers who were not vetted by the broker. The broker in the co-op world, and the kind of to a lesser extent, is the one that's gonna vet and steer you to the right building that you would qualify for so you don't waste the time. So that service is invaluable.
SpeakerAnd you know what it is too? It's also knowing how to put together a board package because the first communication a buyer is gonna have with a board is the board package. They're not talking to you, they don't know who you are, they only know what you're giving them. If a parent is buying with a child and the child just started working, so technically it's a buyer working with an employed child, we have to dress up that board package to show this is someone who is employed. They're not a kid, and we want that board package to read that way. So I think good brokers and what where we come in situations like this is preparing the board package to be the first point of communication with the board is crucial because if you're an unrepresented buyer, you never dealt with a co-op, you're just going down the checklist. Okay, they want to see this, they want to see, they want to see my financials, they want to see my employment letter, they want to see my deed to the house I own, and that's it. And they submit it. They don't really do a nice cover letter. I always make all my buyers write a very nice cover letter to the board because those actually do go a long way because it's your first communication. And I tell people all the time, it's like meeting your spouse's parents for the first time. You only have one shot at this to make a good impression. And it's really about getting them to be comfortable with you as a neighbor. It's not always so much about the financial side of it. Those are terms that you want to make sure you're covering, but you also want them to be comfortable living with you. And I feel that as brokers, it's our job to present that story to the board.
Speaker 5I I agree. And again, in certainly the co-op condo market in New York City, there's added value for the broker to help a buyer and a seller navigate the extra layers that are involved in the process.
SpeakerYeah. So I mean, okay.
Speaker 5I'm sorry.
SpeakerNo, listen, for sellers, we'll always have a bias, right? Every sell I've never met a seller who's told me that they're not the best unit in the building that's ever come on the market. Every single one's the best unit, right? So I think it's our job. Again, there's brokers, and it happens all the time that we'll walk into a meeting, they'll just yes the owner to death just to get the listing because they don't want to disagree with them and maybe upset them. We take a very different approach on our team. They're not hiring us to walk in there to tell them what they already know or think. They want us to come in there and give our professional opinion. And I think that going into these meetings, you want to make sure you're taking on a property that not just to get the listing, but to sell it, as we only get paid if we sell a listing. So if I'm just walking in there and telling you that your place is worth $2 million, then all the data in front of me is telling me, I'm gonna tell you that. I'm gonna say, you explain to me why I should be pitching this for $2 million more. So I think that from a seller perspective, it's important for us to go in there and be honest with the sellers, knowing that they're gonna have a bias and they may have unrealistic expectations. And whether we get the listing or not, to me, it doesn't matter because if someone else gets it because they said something different, I'll likely get a shot to pitch them again in six months when it doesn't sell. So I think it's important to be up front with sellers in the beginning. And then from the buyer perspective, again, technology has really allowed, there are very savvy buyers, right? I we're working with a buyer right now who has a $15 million budget. He does a lot of his own due diligence and research. But where we come in to help him is understanding neighborhoods. We have a place in Sutton Square that's a townhouse he really likes for $14 million, but we've been looking for three months in the West Village up to 20. So understanding resale value, what the market's going to be for that house, what the neighborhoods are like because they have young kids and I have young kids in the West Village. These are life experiences that as a broker, especially if you're working in a neighborhood with a buyer that you're familiar with and you have similar life and you're you have similar kids similar in age and you're looking for similar things in a neighborhood, it's important for us to really help them understand what the lifestyle and what they should be looking for in the neighborhood is, right? If you have a three and a six-year-old and you're going to live in the East Village, where are you sending them to school, right? You have to really ask yourself when you're speaking to your broker. As a broker, you have to really make sure knowing what your clients' needs are that you're answering these questions and being familiar with these ahead of time is always important.
Speaker 5So I worked downtown for 25 years. I we left there after 9-11, but then I remember going back to go to court. Um Richard, I'm sure. What what hearings are John Street, Richard? The uh you're muted, you're muted.
Speaker 3You're muted, Richard. 66 John Street is where the environmental control board hearings were conducted in person, and now it's called Oath and they're done by default.
Speaker 5Okay, so there's a long so anyway. I remember getting off the subway, and again, mind you, I work downtown and I see a guy who flip-flops walking a dog. And my experience downtown, it always has been people running to the office going away. How is this transition going? Where are we in the transition to to make downtown New York a residential
Pricing Truth For Sellers And Buyers
Speaker 5or mixed use neighbour, I'll call it? And what what is what is your firm's uh sweet spot in this and what buildings are you familiar with that? What what do you see as the future of downtown New York for residential purposes?
SpeakerIf this question's for me, yeah, downtown's there already. So I think that what's listen, social media has really changed downtown, specifically the West Village. The West Village was really, I would compare it a lot to the East Village back in 08 to maybe 14, where it was a hip, bohemian type, landmark, pretty area, cool restaurants, but it wasn't really the high-end luxury market and high demand, low inventory neighborhood it is today. And I think that all the downtown neighborhoods have fed off that as years have gone on. I think that there obviously are still pockets. Tribeca is a very vast neighborhood. There's what I like to call Tribeca proper, which is basically from Chamber Street to Canal and west of Hudson. That is probably just in line with the West Village market, with the cobblestone streets. But then you have everywhere all the way to City Hall. So I think that areas like Tribeca, which are established versus somewhere Hudson Square, which is stuck between West Village and Tribeca, those areas are close enough to the prime neighborhoods where you're seeing people be priced out or not being able to find properties in their first pick of the neighborhood and moving into those areas around it. Even Battery Park is seeing an uptick from buyers and prices on the north end of the sh of Battery Park just because people can't find things in the area of Trebeca they want to be. So I think the market's already there downtown. It's been there since 2015. It's increased year over year. I like to tell but I like to tell people all the time, even during COVID, I had clients calling me saying, Hey, do you think a lot of properties are to come out in the West Village? And it's just, it's almost a recession or economic or political collapse-proof neighborhood or area. So yeah, I think that's there. I think that's already there. The Lower East Side, I think, still has a ways to go with how it could grow. I think the Lower East Side and Alphabet City, you're seeing small little boutique condos pop up here and there. But yeah, I like to think West Village specifically, with the condo sales and the pricing they're getting at 80 Clarkson. We just sold two properties at 150 Charles for 3,500 a foot for a Masonette. And then a month later, we sold a very similar masonette for 4,500 a foot. So the the market there is just steadily increasing because there's not a lot of availability and there is the high demand. So yeah, I think it has arrived. It's just a matter of where do you go from here because especially on the West Side, it's a landmarked area. They just can't build more condos like they can above 14th Street. So we'll see what happens. I think though, specifically with West Village, buying into a neighborhood like that, you're buying a good investment because they just can't make them and keep continuing to build by knocking down multifamilies like they can in other areas.
Speaker 5What's the next great neighborhood?
SpeakerIf I can't afford the West Village and next great neighborhood.
Speaker 5What's your creative solution?
SpeakerMy creative solution is I think the next great neighborhood is probably going to be Hudson Square. They've been trying to develop and they've been trying to get certain prices at condos that haven't been there yet. But I think with the increase to pricing in Tribeca and West Village, specifically just back to A.D. Clarkson for a minute. A.D. Clarkson is going to be the only building built as it was, a high-rise luxury white glove doorman building in the West Village on the water. There's not going to be another one like that. And I think that's driving traffic to the area where people want to see high-rise amenity buildings that are close to West Village, and they're going to be going to Hudson Square now. So I think that Hudson Square is a good investment right now. I can see that market growing pretty steadily over the next 12 to 24 months. But yeah, that that would be my bet because it's close to the prime areas that are already established downtown.
Speaker 5So let's transition here. You guys, I know, are very well aware of existing legislation, recently passed legislation, upcoming. Yeah. So let's start
Downtown Neighborhoods And What’s Next
Speaker 5with the co-op timing bill, the 45 day timing bill. Has that affected anything you guys have been doing, or is that more the management companies?
SpeakerIn a great way, it's affected it. I think that I've had many experiences where I put a co op package in on June 28th and it's Summer. And now 60 days have gone by. We still don't have an interview date because everyone's traveling. You can't get the board together. They have no regulation on when they need to get back to you for years. Co-ops are a sovereign state. They always have been, right? So I think that with this regulation now, I used to always have to tell people I think the once we put the package in, it's going to take hopefully four weeks, but it may take eight weeks. But to be honest with you, I just don't know. But that's typically what it is. Now I at least can say it won't be more than 45 days from when they get it. So it at least gives buyers, which you would expect you want to have with condos, you have it. They have 21 days. So why not with co-ops? But at least now for buyers, they now at least can plan to know when at the very latest will I be able to take possession of this property. So I think that was a very good law change and something implemented that probably needed to happen years ago.
Speaker 5So just for uh shameless plug type for me, we were approached one of our co-op advocacy groups, were approached by an ISO New York State Realty Association or Association of Realtors, and we drafted that bill 10 years ago. Thank you. And we felt we called it the compromise bill because it was a lesser of all the things that brokers wanted, that that human rights groups wanted. Everybody loves to hate co-op boards. And it languished literally for 10 years in and out. And then in I would say November 2025, we found out that it's on for a hearing in sit in New York City Council. And the prime sponsor of the bill is uh council member Amanda Farias, who we got very uh friendly with, who've spoken to, who's actually been on this program and talked about this bill at length. That bill was designed for quality control for all parties, and I'm glad to see that from your vantage point, it's a success.
SpeakerIt was an absolute positive. It should it it takes us, it should take the buyer and the broker longer to put the package together than it takes to review it, to be honest with you. And it takes about a week now with everything being done digitally for the most part to get it done. And so I think not being again, I don't think it hurts co-ops either. 45 days is a long time. If you can't get together as a board to meet within a month and a half to look at a package, that's as a buyer, that would scare me. I'm like, when are they meaning to talk about real issue issues in the building? And I think also as a homeowner, if I'm a seller, I want to make sure my board is looking at my buyer's package because maybe I moved out already and I'm still paying my mortgage and I'm still paying my maintenance month to month. So I think it definitely holds them accountable to do things at a reasonable speed, but doesn't also mean that they have to get together sooner than they would like to. I think it's a fair amount of time for both sides, and it was a pretty good build to be implemented.
Speaker 5I will tell you, just again from the co-op perspective, since I can give that 90. I'm making up the number, but a vast majority of the boards had absolutely no problem, didn't have to change any procedures with within it, but then you always have the arrogant or rogue board that felt they could take as much time as they wanted. So let's move on to uh brokers' fees. I know there's been legislation regarding rental fees and in the residential area and also commissions. Why don't you explain how you guys charge both for renters and for commissions on sales and what people should know about that?
SpeakerSo just to start with the Fair Act is, in my opinion, one of those bills that wasn't really well thought out because the only person, the only person that didn't lose is the landlord. And we're seeing that in the rental market right now. The rental market's at its highest peaks that it's ever been for median rents. And that's specifically because you all you they did was tell an owner, you want to hire a broker, you got to pay their fee. And that owner turned around and said, All right, I'm going to pay a $6,000 fee to you for my $6,000 a month apartment. I'm not paying that bill. I'm just gonna jack up the $6,500, and that'll cover the fee. And now, in theory, the renter's still paying it. So I think in that bill was meant to protect renters not working with the broker to have to pay a fee, but in reality, they still are. They're paying it in the rental price. So from a rental perspective, or excuse me, from a renter perspective, the market's been insane. Having a good broker help you looking for apartments, I think, is important. The rental market's very different than the sales market. I think it's easier to get a rental done on your own than to purchase a property on your own. But again, for renters, if you want to go direct to a property now on your own, at least you know you don't have to pay a broker fee. But that apartment before the Fair Act likely was whatever the fee would have been to the listing broker taken off the top. So I feel that bill just increased an already tough rental market for renters versus helping them.
Speaker 5We call that unintended consequences.
SpeakerI think it was an easy one to figure out.
Speaker 4But when have you not worked with the New York City legislature lately?
SpeakerListen, it's simple. I don't want to even say it's economics, just common sense. You're not restricting how landlords can price their free market apartments. So, what's to stop them from just tacking that fee they're paying their broker on to the uh to the rental price? I understand we're in a political climate now where introducing bills and having real estate restrictions that come out that are supposed to help people, really hurt people, is becoming a common theme. But yeah, I think the silver lining is if you're a renter, go on Street Easy, find the apartment. If you have the time to do it on your own, go for it. Try it for two weeks. If you don't find anything, call a broker because it is tough out there. There's not a lot of rentals that are ever available. Good properties, especially properties downtown, they come up and they come off within a couple of days.
New Co-Op Timing Law Explained
SpeakerHaving another set of eyes on the market for you to make sure you get in there at the right time or maybe get in there off-market with the with how brokers work these days. A lot of our transactions on both the rental and sales side are happening behind closed doors. We have our own networks. There, I'm in an Instagram group with 500 brokers that are mainly all the top brokers, uptown and downtown, that we share our pre-market sales and rental listing with each other. You may not be getting a chance to get to some of these listings because you're just not seeing them on street easy. So working with a broker gets you access to information that you would may not be getting on your own, which is, I think, an important thing for renters and buyers alike to understand.
Speaker 5So we're not running out of time, but we're getting on the back end of it. Famously, the New York State budget just included what we're calling the Pieter tax, which is a surcharge for people of Pieter is basically a place that's a non-primary residence that's worth condos market value over five million, co-ops average assessed valuation of a million, which is essentially supposedly market fair market value of over five million.
SpeakerWhich as we're finding out is not true.
Speaker 5But it could be anywhere from two million to eight million.
SpeakerExactly.
Speaker 5But that that's a whole nother that's a whole nother episode. So have you has it affected anything you're doing yet, or is it too soon?
SpeakerSo it's too soon, but I could tell you what I saw right away. And listen, to begin, the city is only two to six percent second home properties, piétitaire properties to begin with. So it's a small, it's a small area of the market, but the reality is two to six percent is still a big number and it's still something that you want to be aware of because when you're selling your property, you want to know that I could sell to anyone I want and I don't have what are they actually paying? So my phone started ringing off the hook because I do have a lot of Piétière owners that are over five million, and it was confusion. It was, when do I need to pay? What do I have to pay? How is this gonna work? And I didn't have a problem with the tax when it first came out. I'm like, listen, you own a home over five million, you got to pay a percentage in tax, and that's fine, whatever. If you're buying something over five million, you're very likely in a good financial demographic where it's not a big deal. Now, I think where things got confusing was the first two years now being based on assessed values, especially with co-op owners. So I've seen confusion. I've seen owners calling me saying, do I need to sell? Is this going to affect me? Is my assessed market value under a million or over a million? I know my apartment I bought for more than five. I think people are waiting to see what's going to happen. I do think, though, where you're going to see the biggest effect on these homes is going to be between 23rd and 57th Street, which are typically not full-time user areas. It's just how it goes. Those are a lot of second homes or corporate housing or something along those lines. They're not, there's not as many, or excuse me, there's not as many second home owners in areas outside of 23rd to 57th as there are there. So I think areas like that are going to see a much greater effect than downtown, Upper East, and Upper West Side. Have I seen it personally? Not really. I want to say that I have just sold a couple homes to second buyers, but they haven't, they were not affected, they were properties that were not affected
Rental Fee Legislation And Fallout
Speakerby the Pieditaire tax. So it's yet to be seen. There will definitely be certain properties that will be affected. It's naive to say there won't be, but is it going to have a dramatic effect as on the market as a whole of Manhattan and Brooklyn? I don't know. That it's too early to tell.
Speaker 5Okay, so I'm done with my cross-examination of Alex. We turn it over to Richard here for some we call it the lightning route. Sometimes it's not so fast. Sometimes it goes off script, but that's always off script. Always off script.
Speaker 3So we now live in an age where the doctor sees a patient and the patient has a chat PTG generated list of symptoms and cures. The lawyer gets instructions on how to file the subpoena, even though we've practiced for 30, 40 or more years. How is the broker now affected by all this artificial intelligence out there when clients come to you with sort of answers they expect or present to you that are really not you have a gut level answer to a lot of things because of experience, wisdom, and just vast knowledge? How does that all how has that all changed, especially in the last year or two?
SpeakerI think AI has, to be honest with you, I think that to start, we're not just brokers, we're therapists, right? Selling residential real estate is an emotional thing for buyers and sellers. I've done commercial deals, it's a lot more dry with residential. My kids were raised in the house and I've been here forever. I have an emotional attachment. AI, I think, is giving brokers the ability to perform our jobs more efficiently. And I think that with a seller, listen, there will always be people who doubt the importance of any job, right? I don't need an accountant, I can go on, I can do it online with QuickBooks. It's every profession. But I think with brokerage, most sellers that I speak to understand our value. They understand that they could simply go on to Street Easy, hire a photographer, and post photos, and then they could deal with showings. But they also understand that it's not as simple as that, right? It's it's a choice people have. And I think for sale by owners, even with all the technology that's rolled out, is only at about 6% or less of the market. So I think as a whole, it has not really affected us as brokers. I think it's just really changed how information is being gotten to the consumer, the buyer. So I think it's up to us as brokers to utilize AI and technology as it's being rolled out to incorporate into our marketing plan and our sales listings in order to get our sellers' listings out there. So I don't think it's really diluted our job and what is required of us as brokers to perform and sell our clients' property. But again, there's a lot of doomsday sayers out there, as we know, that are saying technology is going to take everyone's job and we're all going to be living on the street. But I still think there's a human dynamic that's needed with brokers with selling a property. Just for instance, I had a client I sold their place for 4.2, and their zesttimate on Zillow said 2.8. So it's like technology isn't always right. So I think maybe if you're selling houses in a town, the zest estimates may be more accurate. But when it comes to New York, where you have condo, co-op,
Pied A Terre Tax, AI, And Commercial
Speakerpre-war property, post-war property, a higher 20th floor property with a view and one on the fifth floor that are the same exact square footage. And there one's looking at a garage, the other one's looking at the water, and the algorithm for the AI or the technology you're using is telling you the same number. There, there still needs to be a human dynamic here that's behind the scenes, really managing the listing and the sellers' expectations. But I do think that AI, if anything, has helped us more so as brokers, and it's up to us to really explain how that's helping us, not replacing us.
Speaker 3So until my avatar and Geoff's avatar comes, the next question is in terms of commercial real estate, with all the remote working that's going on and the shrinking of retail, what do you see as far as New York? And what do you see as the tri-state area as a trend?
SpeakerI hate to say it, but I never thought the office market was coming back. So, you know, I'm someone who says I'm saying New York is resilient, everything will recover, but I just thought with working from home is working for companies while I have brick and mortar, right? It's a bottom line, it's a numbers game. But I think we're seeing now with office availability and numbers at an all-time low for the first, I think at its lowest level since well before COVID, you're seeing that it's New York City. They companies want to be here. It's a status thing. I think that also we're starting to see maybe that companies are realizing that having people in the office is important for how work is being done. But I think that the office market has really rebounded nicely. I think the retail market was going through a transition. It really depends where you are. But again, even the retail market, Madison Avenue, you can't find anything. Fifth Avenue, you're having a tough time finding anything in the 50s. And the prime areas of downtown, but still going pretty strong. Soho, you're seeing a little bit of a dip. But I think again, New York is its own little pocket, right? There's going to be areas that are a mile away from each other that are vastly different than what they're commanding from a price per square foot. So I think that as a whole, from an office or a flagship retailer, that market's come back nicely. I don't see that changing anytime soon. I think we went through the transition with retail and office post-COVID, but it's came back quite a lot.
Speaker 5All right, cool. Last one, Richard. I think we're running against the clock here, so I'll shut it, I'll serve it back to you, Geoff. All right. So, Alex Hyde, congratulations. You're now officially a co-op and condo insider. Richard, thank you for joining me today and for sharing your experience with our listeners. And I want to thank everybody for listening. Thank you for spending time with us. I'm Geoffrey Mazel, and we'll see you next time on the Call-Op and Condo Insider.