Lack of Inventory Spurring Fast-Moving Real Estate

it's interesting to finally see some of that. I mean, you have to wonder, um, if it comes back to supply because I mean that has been a theme in the housing market that demands there there's just not enough houses to tell. Well, let's see what our next guest has to say whether her she's running out of supply. She has been involved in selling homes for three decades and apparently spent some time in a flight with our co host Tim Stenovic and his one year old son

at the time. I believe it was a red Eye and Tim says she was a gem. Uh, I made the flight so much easier. Let's bring in Louise Phillips Forbes real estate broker at Brown Steven's excuse me, Brown, Harris Stevens. She has achieved than four and a half billion in sales over her career and closing as many as two hundred deals in a single year. She judge us on the phone in New York City, H Louise, so nice to have you here with Katie and myself. And Tim does send his regards and was very sorry

that he couldn't be here. Well, it is all good. I am grateful to have a little girl gang today. Him. Deal deal deal. Hey, listen, you have seen a lot of real estate cycles highs lows. How would you describe the cycle that we are in right now? What are you seeing specifically from your client base? And and do you have enough inventory? Absolutely not in you know, in the middle of the pandemic. Uh, nobody ever thought that we would be saying that, whether it's a rental townhouse

or development project. Um, and I will say that it is. It is, you know, exciting to sort of watch this fast moving market because of lack of inventory. And at what point does this turn into almost a buyer's strike that Okay, there's not an an inventory. You're seeing prices skyrocket one. Does demand simply cooled down because prices on

these homes are too high? Well, even you made an observation earlier and you're you know, talking about the prices plummeting and primage and you know, honestly, I think that is a very UM, I would be careful to to to be reporting. The numbers are the numbers. But also you have to remember sometimes you get things picked over and the cream of the you know, the best of

the best is selected. And when you have something that's been dormant or not on the market, you bring it on and you try to capture your next door neighbor's price, which is a very different asset. Well, it's interesting, all right, So talk to us about you said you don't have enough inventory. Um, it's kind of exciting to watch this fast moving market. Um. Because of that, So who's buying? What's the movement we're seeing? What kind of properties are

you seeing being bought? So tell us a little bit about it. Well, I think, what's of the thing that is so exciting? And again, in three decades, I've had my seatbelt fastened. After September eleventh, after the financial crisis, a global health crisis is a very different recovery, and nobody knows psychologically or financially what that's going to look like.

So my experience is that we are witnessing across almost every sector, whether it's a fifty seven million dollar deal at Central Park South, two of first time buyers purchasing and can afford to actually own cheaper than what it costs for them to rent. Is it spectacular thing to experience the buyers who are go ahead, no, you go ahead please? Well, I was just going to say that.

I think it's also in the last six months, I have watched the toes poking with our foreign buyers, and I think they're going to be seizing our development opportunities that have been lagging, the projects that had the last ten or of their projects. They're going to be absorbing those, and uh, I think that's something that we're I'm already experiencing that doom deals from South Korea, Mexico, London, people

coming back to the market. And I want to wrap in mortgage rates to this conversation, you know about home buying, because you are seeing mortgage rates really start to move. Just in the past couple of weeks. I think a thirty year loan the average rate is now just about three point six per cent or somewhere under it. Uh, you know, people see mortgage rates going higher and they get a little bit nervous. Uh. Carol already knows that I am certainly not looking for a home right now.

I would like to one day. I mean, for you know, potential first time home buyers looking at these rates, I mean, do they should they lock in a mortgage now? Are rates only going higher? I think that would be fair to say. I mean, I came into the business thirty two years ago in interest rates with twelve point four percent, So for me to sorrow a hundred thousand dollars, it was about twelve hundred dollars a month, and today you can get for less than four hundred dollars a month

a hundred thousand dollar mortgage. So I think that the buying power is one of the things that you know, when you have a crisis, which we've been in. Our government has like utilized the interest rates to fuel our economy and it has done so. It's got people off who saved all this money during the pandemics. God knows, we didn't go anywhere, and we saw the refinance and the origination of the mortgage is to be one point six one trillion, and we're projecting more than that for two.

But we'll see its interest rates will become those climbing if that's going to scare people off or create a sense of urgency. So as a it sounds like to blue New York, or at least you've been here for a long time, you know, in terms of the cries of okay, the big urban areas, nobody wants to live there anymore because of work from home. I talked with

Chuck Robbins of Cisco. They've been hybrid pre pandemic, and you know that was he says one of the things pandemic that one of the great advantages is that you can work anywhere and you can hire employees who want to live anywhere. Um, what of the pandemic that was changing the housing market in a city like New York. Well, for for true blue New York is like myself. Those people who you know bought my house in Woodstock or tried to buy my health in mom Talk or the

Hampton's in Bridge, Hamptons. You know a lot of people fled and they're like, holy moly, it's winter and what

am I doing here? Nobody's here, or they really are missing the pulse of the city, and I do believe that we have been experiencing and you can see from the surge of the transactions last spring, we couldn't even process the deals fast enough me it was and those were people that were previous owners in New York or people who've been renting saved enough money and their first time buyers um the the So so I believe that we are going to And again, if we talk about

work from home, I mean I'm married to a serial entrepreneur, and yes, there are a lot of people that can utilize hiring in New York, local tech firms that can hire people in other areas. Luis like Karen I were talking about commercial real estate really interesting time with this pandemic. What's the future there because you know, as we were saying, a lot of behaviors have changed when it comes to

where people are working, where people are shopping. You know, I'm not an expert at commercial but what I am an expert is at people. And commercial deals are going to bring people um continuously. And if you look at venture capital money that we all invested in local tech firms in New York, including my husband's company. You know last spring they closed over twelve billion of local tech venture capital money that is going to bring people. And you look at companies like Noon, I mean, I've never

heard of Noon. Three years ago, they took a hundred and fifteen thousand square feet from Brookfield. Take a look at the top Big four Amazon, Facebook, Google, Apple, they gobbled up three million square people, three million square feet. And what that brings is people. And we're projecting. Listen, during the heart of darkness, I saw probably every appointment downtown in the East Village with somebody relocating from l A or San Francisco, um from tech firms to New

York and they want a piece of the Apple. Well at the same time, Louise, what we are also seeing, you know, it's not just Dilon Musk who's moving to us in or who's moving to other places in Texas, or financial firms moving to Florida. We are seeing, you know, for a society in America that hasn't moved around a lot in the last few decades, they've kind of stayed put. We are starting to see more movement. What are you seeing along those lines when it comes to your market,

your residential clients. I mean, listen, that we have been hearing about up everybody's moving to you know, it's going to be like many Miami is going to be a little New York because people are wanting to benefit from lower taxes. And I think that's going to absolutely that is going to be normal sort of uh transitions that we're going to experience. But listen, I think tech is ten point five percent of our GDP across the nation, and it's going to continue to affect and drive other cities,

whether it's Portland, Oregon, Austin, Texas, Nashville, Tennessee. I mean it's had over twelve percent growth year over year. I'm from Nashville. I don't even recognize it. And I think that there's enough for all of us to continue experiencing this wave. And people are gonna look for a lifestyle. It's just gonna be what's an opportunity for one, and what's right for one might not be right for another individual.

But companies are going to be looking for opportunities. You know, we could look at Amazon as a case study that we didn't get that big deal that they were trying to put together, but they still bought a big asset um in the building and they are they are bringing thousands of employees here, and Luise, We've talked a lot about buyers, but I want to talk about the other

side of the deal, the sellers. I'm curious, have you seen people you know, choose to sell their their house, their property now just because the market is so hot? And I mean, we've been talking about the fact that there isn't a ton of supply of houses right now for for a while. Now, I feel like, you know, it's it's really become a part of common conversation, even outside of Bloomberg h Q. So I'm I'm just wondering

if that's motivated brought some sellers off the sidelines. I think about my experience and what I'm witnessing and the conversations that I've been having since the peak of the pandemic, when people were not sure should I say or should I go? Um that we are now clearly have a lack of inventory, and that they are owners that we are hoping. I'm hoping that I have them now ready emotionally financially to seize the moment because it is their market.

You know, they can call the shocks a little better. They still have to be priced properly. Because the market is still incredibly efficient and those houses in Grinage might not be selling because actually they're just not worth it. Okay, hey listen, great to check in with you. Louise Phillips, Ford's real estate broker at Brown Harris Stevens joining us on the phone in New York City. Uh. Fascinating to hear that it's a pretty dynamic market and we know

that they're still building going on. Oh yeah, it's just I don't know, it seems like houses they take a while to build. Uh, when at what point does we we do see this supply Kurne get alleviated. Have to think it's a couple of years. Yeah, exactly,