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Why Multiple Listing Services Are Not for New York

I have often encountered brokers who question why New York City’s residential market is one of the few that has never had a bona fide multiple listing service, i.e., MLS. To understand this, one has to first look at what an MLS comprises to discern why it may not be particularly germane to our very specialized, idiosyncratic marketplace.

 

By compiling all the listings of multiple real estate agents in one location, an MLS allows agents to show their own potential buyers listings that belong to other agents. Buyers and sellers appreciate being able to view a large number of listings in one location without having to bounce around between different websites. Although this system works well for numerous markets, I would argue that New York’s lack of an MLS is a product of the fact that having one simply wouldn’t serve the real estate needs of this city.

 

Cooperative corporations, also known as co-ops, make up the majority of our apartment sales, and are a phenomenon nearly exclusive to New York City. Co-op boards tend to have different rules and requirements, so compiling those availabilities for a multiple listing service wouldn’t necessarily tell the whole story. Surely, not everyone viewing a particular listing would qualify to live there, which would likely lead to confusion and frustration for all parties involved. As a co-op is comprised of people who own shares in a cooperative corporation, buying a unit in a co-op building doesn’t constitute property ownership in the traditional sense of the phrase.

 

Moreover, many potential buyers believe that they can negotiate a better deal directly with the seller’s broker. However, when using an MLS, all the listings are inherently generic and brokers can allude to the fact that certain listings belong to them, even when not true. Furthermore, buyers’ brokers do not exist in any contractual sense in New York City, meaning that potential buyers are not necessarily legally beholden to anyone representing them throughout the sales transaction.

 

Adding a further complication, residential sales prices in this city are among the highest in the nation and there is a multitude of exclusive apartment and townhouse listings here. The New York City real estate world is a tight-knit community, in which buyers, sellers and agents tend to know one another and access to exclusive listings is gained largely through relationships. An MLS seems particularly impersonal and New York City is a very personal place. For many people, a multiple listing service for New York City would be confusing at best and completely misleading at worst.

The Future of a Pay-to-Play Streeteasy

Most every New Yorker who has searched for an apartment in the city is familiar with the real estate listings website, Streeteasy. Shortly after its 2008 debut, the site became the market leader in New York City as it was perfectly customized to the city’s unique real estate landscape with its co-ops, condos and townhouses. It also seemed as if every available apartment could be found in the website’s database. After being acquired by the Seattle-based Zillow in 2013, which also purchased Trulia in 2014, Streeteasy began to have a problem. Namely, that problem was an excess of apartment listings, many of which were false or misleading advertisements.

 

Last month, Susan Daimler, the site’s general manager, announced that brokers will now pay a fee of $3 per day for each listing they advertise on StreetEasy in hopes that this rule will help eradicate some of the less than genuine listings. Craigslist had a similar problem with dishonest apartment listings which was remedied when the site began to charge $10 per day for each listing. Although it proved to be beneficial to both apartment hunters and brokers in the end, there is always some degree of pushback when people are asked to pay for a service which they had previously enjoyed free of charge.

 

In the case of Streeteasy, it seems that many brokers are quite perturbed by the new rule. When the $3 fee was put into place on July 18, the number of rentals on Streeteasy dropped 55 percent from 30,967 to 13,978 within 24 hours, according to data reported by The Real Deal. Though there may be outcry over the change at the present moment, I believe the decision will benefit the site in the long run by helping it to retain its integrity as the go-to source for finding an apartment in New York City.

Most every New Yorker who has searched for an apartment in the city is familiar with the real estate listings website, Streeteasy. Shortly after its 2008 debut, the site became the market leader in New York City as it was perfectly customized to the city’s unique real estate landscape with its co-ops, condos and townhouses. It also seemed as if every available apartment could be found in the website’s database. After being acquired by the Seattle-based Zillow in 2013, which also purchased Trulia in 2014, Streeteasy began to have a problem. Namely, that problem was an excess of apartment listings, many of which were false or misleading advertisements.

 

 

Where is the Neighborhood in a Global World?

Throughout my years representing building owners in various parts of New York City, I’ve started to wonder what characteristics make up a “neighborhood.” Members of past generations often valued living in certain neighborhoods largely because close friends and family also lived there. But for today’s young people who would just as soon keep in touch with loved ones via mobile phones and social media, physical proximity to others is starting to matter less in the apartment search. People also move around more nowadays meaning that neighborhoods such as Soho and the West Village are now filled with transitory residents instead of the long-term ones of past decades. For those who knew and loved the old New York, this is disheartening but people under the age of about 30 are not as concerned with having a traditional neighborhood atmosphere.

For millennials and those of Generation Z, the world is their neighborhood! Not only do many of these people live in different neighborhoods than their friends and family, but they are often separated by cities or even countries. However, this is a far less tragic scenario than it once might have been thanks to social media, Skype and easy transportation options, especially from New York City.

In the mid-twentieth century, Robert Moses, New York City’s chief urban planner, made a plan to build an expressway that would cut directly through the center of Manhattan. This would have drastically altered the historic Greenwich Village neighborhood and would have subjected its formerly charming character to highway noise and unsightly traffic. Foreseeing such issues, community activist Jane Jacobs banded together with like-minded citizens and successfully stopped the project. I can’t help but wonder if they would win that battle in today’s world or more significantly if they would even battle in the first place. Preserving and protecting the traditional neighborhood is now obsolete, leading me to wonder how to define the word or if it even needs to be defined at all.

Cultural and Regional Preferences

Throughout my time leasing thousands of apartments, I couldn’t have helped but notice certain cultural and regional differences in apartment preferences. New York City attracts people from Europe to South America to the midwestern United States and other parts of the Northeast. But not everyone has the same idea about what a New York experience entails. For example, I have found that native New Yorkers, people from the tristate area and Europeans tend to have sentimentality for prewar townhouse apartments on the quieter, tree-lined blocks in the city. These buildings remind them of old New York, European and South American residences and thus many people feel more comfortable in such familiar spaces.

In contrast, people from other parts of the United States such as the Midwest or the West Coast tend to associate New York City with urban luxury living. For them, New York is about doormen, nice views and building amenities galore. Gated communities in other parts of the country often have high-end concierge services that deal with maintenance problems very quickly. This is part of what attracts people from these areas to luxury buildings with a variety of services when they come to New York. People who grew up in New York, Europe or South America typically aren’t expecting problems to be dealt with as immediately so for them the townhouse devoid of many services is perfectly fine. In general, there are two different views of New York that apartment hunters hold: the one of tree-lined, charming streets with old buildings or the one of gleaming, modern luxury towers. One’s perspective on which is the “real New York” undoubtedly affects where they will eventually call home in the city.

New York Through the Years: In Film & On Television

The New York City real estate market is constantly evolving. The popularity of neighborhoods always shifts and through my experiences representing building owners, this shifting popularity is closely associated with popular culture. I’d be willing to bet that New York is probably depicted more in movies and television shows than any other city in the world. For each generation, the way that New York City has been portrayed affects the neighborhoods where people want to live. In the 1990s and early 2000s, “Sex and the City” revolutionized how numerous young women began to think of New York. By glamorizing the city more than it had been in decades, it made a whole new generation of young people want to come to Manhattan. Up until “Sex and the City,” New York was shown as a gritty, dangerous and incredibly difficult place to live. But the four main characters (along with New York City itself, which many have deemed the fifth main character) enjoyed a New York experience completely antithetical to the way that the city had been depicted in previous decades. “Sex and the City” made neighborhoods downtown, particularly the West Village and TriBeca, look especially appealing.

Similarly, the recent popularity of Brooklyn could be linked to another HBO series: “Girls.” With its main character living in Greenpoint, the show has enhanced the appeal of Brooklyn, especially for millennials, in a way that was relatively unexpected. Of course, this type of thinking poses the chicken or the egg dilemma: Are people drawn to certain neighborhoods because of how the areas are portrayed in pop culture or are the neighborhoods that are already gaining popularity simply reflected in movies and television shows? Overall, neighborhood preferences vary greatly based on generation and it’s not a stretch to say that popular culture likely affects such differences.

Thoughts by:
Adam Frisch,
Managing Principal