Don’t blame us brokers if you over paid!

Or so says the head of New York’s Realty Board in a letter to Craine’s Business Report.It’s a fair amount of blather but I liked his statement that New York sales were mostly to smart Wall Street types who are sophisticated enough to figure out for themselves that they’re being fed a line of bull. I like it because that’s the exact defense Wall Street asserts when a customer complains that they took the advice of their “financial adviser” and got hosed. “If you’re intelligent enough to inherit a million bucks we can steal, Widow X, you’re intelligent enough to know that your “adviser” is just a used car salesman, out to take your money – next case”.

And this part could have been written by Mad Monkey. In fact, perhaps it was.

Finally, it is troubling to think that Crain’s believes that the real estate market in New York City is no different from the rest of the country. The type of ownership, the impact of Wall Street, the value of the dollar and the excitement of living in New York are just a few of the factors that make New York different. Our residential brokers understand all of the factors that drive our market, and I am proud of the information and service they provide their clients and their love of our city.

Steven Spinola
Real Estate Board of New York


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4 responses to “Don’t blame us brokers if you over paid!

  1. Retired IB'er

    On a scale of one to ten, I would have to rate the level of integrity in American business and government at the leadership levels a three at best.

    It will be our inability as a nation to hold our leaders to a reasonable standard (forget high) of honesty that will destroy this great country. It has already brought us to our knees.

    Lack of honest, transparent leadership is the real threat to our way of life, not the dangers presented by China, Iran, North Korea, Al Quida etc.

    This guy’s nonsense is an example, as is John Thain’s and any number of other of our leaders. It is a long list of greedy clowns.

  2. anonymous

    1000s of guys earn >$10MM/yr in financial industry….perhaps a few 100 of that elite group are “smart” by any reasonable subjective standard…

    Real estate, like many businesses, is akin to a Ponzi scheme or “greater fool” game…pay $X for shelter and hope some moron will later buy one’s used shelter for $X+some handsome profit….

    Lots of slums along Fifth Ave (and on Park) that can be torn down to put up new, 15 CPW-like supply, to create instability in the Ponzi scheme…Bernie lasted for decades…real estate is a similar long-cycle Ponzi scheme…weren’t these same Fifth/Park slums hard-to-sell at even low prices back in ’70s???

  3. christopherfountain

    Long term, real estate has kept up with inflation and that’s about it. Search this blog, if you care to, for the link to the Dutch economist’s study showing just that, based on several hundred years of records of prime Dutch waterfront. Shelter will always have a basic value and comfortable shelter will be worth more than uncomfortable. If a drive in the Bronx is selling for $400,000, it isn’t a ponzi scheme to postulate that a home in Greenwich is worth more.
    Housing prices departed from the inflation rate when our policticians of both parties started encouraging home ownership via low interest loans passed out to anyone who asked. Hardly a surprise that that plan eventually caused ruin.

  4. Peg

    You have to park your money (assuming you are fortunate enough to still have some) somewhere. Even if real estate just “keeps up with inflation” – nice to accomplish that task. Your “inflation-maintainer” allows you to throw parties, watch The One give speeches on your boob tube, play with your parrots and sleep at night. I’ve never been able to figure out how to do any of that with my mutual funds. (On the other hand, I never have to worry about vacuuming, dusting or replacing the carpet in my mutual funds.)

    I try to give clients an honest as possible picture of the market as I can – with the caveat that, IF I knew for certain, people would constantly be in touch with me and I’d be earning hundreds of millions for my services.

    I do know this. When, in 2005, folks would say to me: “Peggy, I think I’ll just stay in my home for a while. After all, it appreciates 10% to 15% annually,” I would respond to them that it was not going to go on forever. What did they think; that people earning $70,000 a year were going to shell out $3.2 million for their new home? I honestly never thought it would get this ugly. But, I knew that the vapors would come to an end at some point.