Changes in brokering and marketing in 2006.

2006 has been a year of change for the real estate market. There has been an influx of apartments on the market, both from the many emerging condominiums as well as the resell market. With the large amount of product on the market, the brokering industry has had to make some adjustments. Whereas apartments used to sell themselves, 2006 forced brokers to sell apartments.

In the first three quarters of 2006, buyers were more hesitant to sign on the dotted line than they had been in years. The brokerage community, in turn, developed a new attitude towards sales and towards each other. According to Stan Ponte, SVP of Sales at Stribling Marketing Associates, since there was no explanation as to why inventory was not moving, brokers acquired a "let's do something" mentality. In other words, brokers decided they were going to make it happen no matter what it took. This meant larger parties, more incentives, such as camera giveaways, and an overall more positive attitude towards each other. Ponte remembers that just a few years ago getting into a new development used to be a challenge. Now, he says, you are sure to get an appointment as well as a qualified broker to show you and your client the apartment. Says Brenda Vemich, also of Stribling and Associates, "we all know we are in the same boat and we don't want to alienate anybody. There is just a bigger sense of community now."

Brokers across the board agree that in 2006 a new broker emerged. "This broker is more qualified than in the past and understands how to make a deal, rather than just how to take an order," states Ponte. Tracie Hamersley of CitiHabitats comments, "our profession has always had one of the biggest saturation rates, and we were seeing brokers busy when almost anything would sell. Now, there is a winnowing out of people who do not have the wherewithal and the strategy."

The role of the brokers that do stay in the game is also changing. On almost every new development a broker or brokerage company is employed, to do the exclusive sales, at the beginning of the development process. Therefore, with the onset of the condominium boom a new relationship between broker and developer arose. "Brokers are the eyes and ears of developers," says Vemich. Brokers assist the developers with everything from creating layouts to choosing finishes, to sales, which entails a huge amount of trust on the part of developers. Brokers help analyze the saleability of the property, appropriate pricing and the "sweetspot" of the market, by scrutinizing the neighborhood, demand for apartments and choice in layout. Says Ponte, "brokers are beginning to understand that not all square footage is created equal." Brokers also show the product on a daily basis and therefore can provide the developer with feedback.

In addition, after encouragement by brokers, added incentives are being offered during the sale process, to both buyers and brokers. Since 99% of deals are now co-brokered, enticing brokers is very important. Therefore, sellers are beginning to offer 7 or 8% commissions when they are usually 6%. Transfer taxes, which were traditionally paid by buyers on new developments, are more frequently being absorbed by sellers.

Hamersley explained, "this market teaches you that you have to be creative and think outside the box." For example, in an effort to inventively market a development in an up and coming neighborhood in Williamsburg Brooklyn, Hamersley and a colleague borrowed art from local artists to increase traffic and interest in the property. Vemich insists, however, that there are still developments that sell themselves. At the Parkwood, which has an exclusive sales agreement with Stribling, Brenda explains that the quality of the finishes, location and space attract a certain customer. There are only two layouts, and therefore there is not a large product mix, there is only quality and space. Through co-brokering and marketing the Parkwood reaches out to the appropriate clientele and, says Vemich, "once they see it they love it."

With respect to the future of the market, it is agreed that the end of 2006 is showing some promise as far as the residential market is concerned. According to Stan Ponte, the first three quarters of the year were a "wait and see" market, in which buyers were negotiating rather than buying, and sellers were not used to negotiating. Now, sellers are more accustomed to the negotiation process and have even adjusted some prices. The price adjustments are not an indication of any negativity but rather indicate that apartments are being priced more properly.

This past quarter, customers that had been moving from one property to the next over the past three quarters are finally signing contracts. Buyers are beginning to find that the properties they took for granted as being available are now being taken off the market, which is propelling them to act quicker. With the Wall Street bonuses ahead and a strong overseas market, all indications are pointing to a good year. Along with this optimism comes a shared hope that the brokerage community maintains the sense of togetherness that was created in 2006 and continues to treat one another with kindness.

BY HEELA JUSTIN-CAPELL AND JAMIE HEIBERGER-JACOBSEN, HEIBERGER ASSOCIATES, PC