RISMEDIA, July 18, 2007—(MCT)—With real estate offices in Nassau and Queens, Anthony Carollo has one direction in mind for expansion plans: Westward ho!
He wants to open his fourth office in western Queens or perhaps Brooklyn in the next year or so because his on-the-ground experiences tell him it’s the way to go. Five years ago, about 2% of his Long Island clients wanted city housing; now it’s at least 12%.
“It stands out in your mind when someone says, ‘I live in Valley Stream,” or, “I live in Merrick, and I want to come back into Bayside,'” said the owner of Carollo Real Estate. “It was never like this. It’s like a complete reversal.”
He’s not alone in eyeing the five boroughs.
In the past few years, other Long Island agencies have been strategizing on inroads into the Big Apple, where market, migration and other patterns have come together to make the city look a little more lucrative than the suburbs. Decades ago, crime, congestion, the high cost of living and not-so-great schools launched a wave of eastward migration, including white flight, to Long Island. But now, the city’s market outshines the Island’s, with enough business to convince one of Long Island’s biggest firms, Daniel Gale Sotheby’s International Realty, to plan for its first Queens office.
New York City has been in the midst of a renaissance. City and civic leaders have launched revitalization projects in long-ignored areas, such as the Rockaways.
Gentrification has made places like Brooklyn and Harlem great investments. Crime and congestion have either been addressed or neutralized in many neighborhoods, as the ‘burbs become built up and property tax bills surpass city ones.
About 18 months ago, Long Island began experiencing a slowdown in real estate, but the buying and selling of city homes barely faltered.
By going west, some brokers are trying to diversify their portfolios of listings.
“They’re not leaving Long Island, but they’re extending their horizons,” said Buddy Hoosein, vice president of the Queens division of the Long Island Board of Realtors.
Manhattan is especially attractive. It lures a pool of global buyers, and its multimillion-dollar apartments generate mouthwatering commissions.
Century 21 Laffey Associates, which has 11 North Shore and three Queens offices, has been in merger or buyout discussions with several Manhattan real estate firms, said Emmett Laffey, chief executive. He’s certain he’ll have a Manhattan branch within two years, and a fourth one in Queens. Laffey said he sees several reasons to go west: Long Island’s slowing market, the city’s escalating home prices and the high commission rates in the Big Apple, about 6%, compared to the Island’s 4 or 5%.
“As far as owning a brokerage, Manhattan is probably the best place left in America to operate a company,” said Laffey, whose business is headquartered in Greenvale. “You have the most product in such a small area. The prices are so high. The buyer pool is global. … When you go into Queens, you’ll have a lot of Hispanic buyers and Asian buyers, and it’s still a diverse buyer pool, but Manhattan puts the cherry on top of the cake.
“The average price now in Manhattan is over $1 million, and there’s no shortage of sales in Manhattan over $20 million. Out here, it’s a rarity to see a home sell over $20 million, excluding the Hamptons. In Manhattan, it’s a daily occurrence.”
No one says it’ll be easy. New York City’s real estate norms can be different from Nassau’s and Suffolk’s, and that’s why most Long Island brokers are staying put. For example, it’s not uncommon in the city for an agent to live off commissions from just one building — a sort of monopoly that will be hard for outsider companies to bust.
Working in the city requires a different type of expertise, said Jonathan Miller, president and co-founder of Miller Samuel Inc., a Manhattan-based appraisal company.
“It’s a different form of housing stock,” he said. “You’re dealing with co-op boards, zoning, another density, probably higher cost basis in terms of setting up an office.”
Right now, the opportunities stem from changing lifestyles, one in which people want to make New York City their primary residence. For example, more than 61,000 Long Island residents in 1995 had moved to New York City by 2000, according to U.S. Census figures.
One driving force is baby boomers with grown-up children. They no longer have to live in a community with good schools.
“Once your kids are out … you’re still paying that high school tax bill,” said Rich Guardino, dean of Hofstra University’s Center for Suburban Studies. “You start to say, ‘Can I have a better investment in the city? Plus I’m ready to downsize, and I like to live in an area that’s walkable and has plenty of cultural excitement.'”
In fact, Long Island’s good schools are no longer the only deciding factor in decisions on where to live, some agents have found.
“People are saying, ‘New York City would be just fine as a primary residence as long as I can get my kids into the schools that I want to,'” said James Retz, senior vice president of marketing and technology for Daniel Gale Sotheby’s, which focuses on the North Shore.
That realization helped spur the agency to discuss launching its first Queens office as early as next year. Daniel Gale Sotheby’s has been coping with its growing Queens business from its westernmost Nassau offices, and that’s not in keeping with the industry mantra of “location, location, location.”
“It’s always good when you’re dealing with something as intimate as real estate to be a local expert,” Retz said. “A lot of that expertise comes from living and working in the actual community.”
Copyright © 2007, Newsday, Melville, N.Y.
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