It is evident that the residential and commercial landscape is rapidly changing here in the LES (Lower East Side, NYC). It is my second day dining at Taco Mix – and I am delighted to report that the food is delicious. I foresee that in the next 10 years, this small strip, which appears currently under contract, will build its air rights and develop into a mini mall; mixed use condominium, or both? The puzzle could align given the recent burst in tech start-ups in New York. The “opportunity zone” on South Delancey Street and Broome Street, featuring brand new offices, and a collection of brand new residential sales and rentals will be able to host the continuation of this burgeoning cultural shift. Perhaps Andreessen Horowitz, a private American venture capital firm, or Fifth Wall, will open offices here in the LES? Only time will tell who the prospective tenants will be, but they can always e-mail me for feedback ha ha firstname.lastname@example.org
The empowered real estate professional of the future will be supported by artificial intelligence derived from contextual local data to guide the process and provide insights. Like any other major shift in the world, it will take time to derive meaningful algorithms. In the process, there will be a refinement in ethics given that software and hardware solutions are inherently subjective with a given goal in mind, and it is often just about making money, (not all, some) and not aiming to solve a problem. To some degree, that cycle will correct itself as people will eventually decipher between such competing voices; hopefully machine learning will produce super intelligence that is self motivating toward “mindfulness.” Just as we hope that real estate brokerages and developers that make a career out of “opportunity zones” act beyond speech and actually purport positive change by giving back to the same community.
Constituents use artificial intelligence keywords to differentiate and gain market share, because technically, and literally, there are current laws governing how a real estate brokerage should be structured. This actually limits what can be done by a robot vs a licensed real estate agent depending on location. While the purported tech rhetoric has to some degree dislocated smaller brokerages and brokers, there are players that realized that in order to compete aggressively it is imperative that they go beyond speech and actually use relevant data to feed the machine and obtain aiding answers in pricing and pairing of customer and real asset. Thus, traditional closed systems that own compilations of such relevant data sets, can now crunch that data to churn it into gold, thereby enhancing the real estate agent in their brokerage into a “super agent.” This process or paradigm shift will create a division between brokerages who cannot afford to buy market intelligence or data, and scientists and engineers to build smart systems. Technocratization also created a market- place for non traditional real estate brokerage services for different classes (single family, condos, ect). Moreover, there are companies offering to streamline most of the transactional process for a fraction of the traditional cost. While I do not imagine that there is a unicorn that can streamline the buying or selling process for every asset, there are some fair artificial intelligence solutions that can be helpful, depending on the user’s goal. Human time and effort is still needed to guide the algorithms, label the data, collect data, and understand the linguistic environments where such “innovation” takes place.
Conclusively, I would not make my bet on having artificial intelligence dramatically replace a system and process that is local, and to some degree analog, operating through a specific legal framework changed overnight. The process of creating meaning in our society and cultures takes time, that includes the understanding of new technologies by many, the cost of such shift, and the adoption of it. The questions that we are left to ponder are related to: what is the value that is created? Who loses? people without access? Does it solve a real problem? Is it long term? Is it viable? And it will eventually become the norm? Within what framework?
As we continue to adjust from analog to digital, it seems relevant that other systems would eventually have to adjust. Commercial and residential spaces might feature air filtering systems, social community through design and space availability, and completely wired with the latest capabilities for wireless communications. Additionally, there will be more of a “green” component in most spaces with plants, and flowers, and beautiful pure scents. A future of “smart” and “green” buildings and communities. My colleague introduced me to his solution below, and I rarely promote things, but, I think that what Thomas is offering is relevant. Now back to the birds chirping in New York City.
As a Lower East Side Resident, and real estate broker, I have observed the shift in the architectural landscape. What once used to be the Matzo Factory, is now a new condominium development. Adorning the corners of the high foot traffic Clinton Street – an array of new boutique shops selling art, good food, and love in a cup of gourmet hot chocolate. It makes sense that developers hedged on the steady growth of the LES. A romantic landscape , with vibrant flavor and history, where a developer could build and make a profit, while not surpassing the average 2k a foot psqf, in surrounding neighborhoods. As a resident, and broker, I do feel that it is positive that our community continues to dynamically move forward, while still keeping aspects of the history that has made the LES what it is. Among the fancy new boutique shops, one can still find the little mom and pop spaces, art, music, galleries, Orchard Street. The architectural design does not take away from the skyline; featuring small walk-ups, and charming buildings. From a buyer’s standpoint, this would be the place to invest at the moment, while prices are relatively low, and the product new, in a wonderful location. GO LES!!!!
I love New York City, because it is a dramatic space with fluid and dynamic energy and an artistic underlying climate. Being a real estate broker, is challenging, but it is also exciting. Throughout the years, open source players and creative programmers have tried to find a way to democratize data in the real estate landscape. After acknowledging that New York City’s real estate data has mostly operated in closed, non cybernetic systems prior to listing aggregators – they realized that it would behoove them, to mostly create tools that brokers can use to facilitate a transaction, or create spaces where brokers and prospective buyers and leasees could try to find real time data to negotiate a transaction based on a macro, contextually relevant comparisons. With aggregators, they welcomed the real estate industry’s willingness to share data and create an overall market place for all. Thus, consumers became locally familiar with the marketplaces, and brokers were able to find direct customers/clients. That is, until every new aggregator, or provider of real estate data, decides, that they are more interested in the classical brokerage model for controlling data and turning profit. Thus, democratizing of information is great, but then, they want to be compensated for the service that they provide, and what better way than to use the content already provided by the real estate players who kept the information in closed systems and by default control the market. A conflict of interest is born, and regardless of how many new tools are used to democratize this particular data, the content providers will pull back because it affects their profits. Data sharing is shrinking because of the push and pull that technocratization of this particular type of information purports, and the landscape is not ready to lose power or control of extremely valuable data with fancy profits. New York City’s real estate landscape is interesting because it contains different types of properties, and for each, a unique process. Furthermore, there are laws dictating how each property can operate within the macro landscape. Brokers are needed; technology is useful – what will the future bring for this complex landscape? will owners accept that an agent would not want to list their property in a given space, because this will mean having to share the commission? Will that owner receive the highest bid? will that owner still be paying the same commission amount if the buyer comes directly to the listing agent vs having to co broke it with a buyer’s agent representing a customer? Do buyers even care who represents them, and rather go directly to the seller’s agent because this will guarantee them getting the property that they want? If a buyer’s agent doesn’t know a property, his/her job is to conduct due diligence, and by default the understanding is that the professional has experience and knowledge in reference to the process, pricing and market movement. Will owners even care or understand how this paradigm shift impacts the bottom line? will the brokerage system change? Only time will tell.
Everything seems brighter in New York City today; the sun is bursting over the fabulous skyscrapers populating the radiant and inviting blue sky. Aside from the warm climate, the sales market is leading with a healthy uptick in movement and pricing. While there are factors that can contribute to the shift in pricing each quarter, in 2014 there seems to be a trend – inventory is low and prices are in the upswing. There are factors that contribute the market conditions, and there is an underlying cycle to the degree that eventually prices will reach a stasis. Subsequently, there is still technically a window of “opportunity” for real estate players. Cash is king, and that is true for buyers who do not need financing. What may be “too expensive” for some, can be an opportunity for others in our global economic landscape. Additionally, in Manhattan, the complexity of zoning and air rights, price for the land, as well as historic landmark allocation in some areas will continue to generate demand for land where development can occur. There is a nice segment of new construction, but in the high-end market, because the incentives to build “affordable” housing have diminished. Companies spend millions trying to crunch numbers and data to hedge identify the exact time, space and mobility of an asset– not even for a solid rock of gold do we know the trajectory, or do we?. The NYC real estate market is fascinating, dynamic, and the exact future of its peak or lack there of, somewhat evasive, but while in the moment – just a slice of the macro dynamics here in NYC.