City has new goals and challenges to face this year.

Instead of the usual talk of vacancy and sales figures, these comments are aimed at broader, less typical trends in real estate for the coming year including; greater professional skills, emphasis on sustainability, and expanded ties to the global economy.

By 2008 the New York state salesperson pre-licensure and brokers courses will require 75 hours (up from 45 hours), comparable to New Jersey and Florida. So if you have any intention of getting a license, this is the year. The expanded courses will offer more about real estate finance, talk about coops and condos as well as houses, and better prepare those starting their careers.

Mortgage bankers will also be required to have individual licenses, in addition to Department of Banking approvals. The mortgage banker license will require only an 18-hour course--similar to a course offered at Baruch College's Newman Institute. Mortgage brokers will have to go through the same background checks as other real estate licensees, and those who violate regulations can be barred from the industry, which could reduce the increasing amount of mortgage related fraud and abuse.

Real Estate is being taken over by young people with strong academic backgrounds. If you cannot dissect a lease, understand communication systems or do a pro forma analysis--your competition can. Street smarts and hustle still count in real estate, but the professional skill level is becoming much higher.

High-energy performance, green buildings, sustainable design will all continue as the new trend. Going green will involve all types of buildings, as tenants demand higher performance, energy efficient buildings, and good indoor air quality. Government support from NYSERDA and US EPA will help. CUNY has just unveiled its new Building Performance Lab, located at the Newman Institute to reach out to the real estate community.

New York City has announced, as part of Deputy Mayor Doctoroff's planning effort, that it will clean up all of its brownfields (contaminated sites). A worthy ambition, not easy even in the New York market, but former industrial areas from Long Island City to the South Bronx will see more redevelopment, and Governor Spitzer has already called for reform ing Brownfield laws.

While historically a renters' town, New York City has moved from under 30% owner-occupied units to close to 35% over the last decade, still far below the US average of 68%. Also approximately 10,000-20,000 units net move out of regulatory programs such as rent control, rent stabilization or Mitchell-Lama, especially as more apartments cross the $2000 per month threshold. While tenant advocates see fewer rentals (especially affordable rentals) as a negative, others applaud more ownership opportunities and market responsiveness.

Don't look for control of rent stabilization to be given back to the city from New York State DHCR and do look for more home-ownership programs.

The world is awash in capital, and a disproportionate share likes New York real estate, driving up prices. International events impact these capital markets, and may result in higher interest costs or even more dramatic events.

Some remember the collapse of the Russian bond market in 1999 that severely impacted the commercial mortgage backed securities market. The CMBS market has more than recovered, but globalization means that real estate capital markets, even for New York, are impacted by international events.

The boom year on Wall Street has buoyed the top end of the residential market, but overall prices and velocity are down, as fewer buyers can meet seller pricing. Hopefully this will be a graceful slide in prices and sales volume.

Some, notably Prof. Robert Schiller of Yale who is speaking at Baruch on April 13, still perceive a bubble to be burst as suggested by condo slumps from Vegas to DC. Many developers and their lenders have put on the brakes, waiting for a cooling of construction costs and a firming of buyer interest. Perhaps more importantly, residential markets have moved beyond Manhattan, including not only Williamsburg, but also Long Island City and Bushwick

If offices prices hold and construction increases cool, new office construction will pick up, beyond essentially single tenant buildings. Another question is if the far West Side will see more office development, rather than residential or hotels. Also, as downtown subway and other infrastructure projects move ahead and continues to move towards a 24/7 creative community, Ground Zero and other downtown projects, residential, retail and office, will move ahead more quickly driven by market forces rather than incentives.

A final note, the New York City regional economy continues to grow despite high costs, aging infrastructure, and increased competition. The real estate industry needs to support investments, ranging from improved ferry service to the Second Avenue subway that will allow New York to continue to lead in future decades.

By Barry Hersh,

Newman Real Estate Institute,

Baruch College