Expert Interview with Elegran’s Chris Fry: Lower Manhattan Real Estate Market Is Definitely Hot

PropertyShark has become over the years an established source for real estate market reports and we decided to complement our analyses with insights from top industry players. We turned to Elegran’s experienced power broker, Chris Fry, for insights on the current state of the market and the challenges faced by the industry in 2016.

Here, he offers his market insights on the growth of Lower Manhattan, sellers’ willingness to negotiate, and the role of green buildings in the future of real estate. Having worked in the real estate industry for over 20 years, Chris Fry has a hands-on approach when working with younger agents and plans to stay just as busy in 2016.

Q: Tell us a few words about Elegran Real Estate and the role you play in leading it.

We’re an office of about 60 agents — but we don’t usually hire people from other real estate firms. The interview process is pretty rigorous. We want to know if they’re willing to put in the hours necessary to really make it in this business. They’re young guns who are willing to learn the way we work, and then run with it.

It’s pretty different, the way we do things. I have 20 years of experience and have sold over $1 billion in residential real estate, and I work with the younger agents all the time. I’ll go to listings with them, work with them on certain deals, and hand them things that would be great learning experiences for them. I show them the whole process and how it’s done, and I might be looking to put them on my team.

Q: How was business in 2015 and what plans do you have for 2016?

2015 was very good with $65 million in sales — and 2016 is off to a great start. We wrote down all our goals beforehand, and want to push it to $75 or 80 million in sales, hopefully more. We have six listings right now, and sold one not too long ago. We want to sell all our existing listings, which can be a lot, but it keeps us busy. We’re looking to get at least 10 additional listings. But since we’ll often work with clients to sell an apartment, and help them again to buy another one, I think it’s an attainable goal.

Q: Have you spotted some interesting market trends recently?

The market at large has softened up over the past six or seven months. On the very high end — anything above $8 million — sellers are starting to negotiate, whereas they might not have in 2015. They might even be willing to pay for closing costs. At this level, sellers want to move the product more than buyer, so it’s especially good for buyers who are looking to buy larger apartments, like three- or four- or five-bedrooms. Even in the $1 to 5 million range, there are sellers who are willing to negotiate. They want to be ahead of the curve. They’re wary of how long an apartment has been on the market. The basic trend is that if the price is right, you can sell, and if not, then you’ll find yourself sitting on it for awhile.

Q: A recent analysis we compiled shows that the median price in 3 NYC neighborhoods (NoHo, Tribeca, and Little Italy) passed the $3M mark in 2015. What can we expect in terms of prices and inventory in 2016?

Lower Manhattan is definitely a hot area.

With the exception of maybe Tribeca, which has enjoyed a lot of popularity and high prices for awhile now, these neighborhoods are going through the same thing that the Financial District and Chelsea went through. It might take a while because people are often going to go with what they see as reliable investments — the Upper East Side, for example, is a safe bet.

But people who have vision have been heading towards those Downtown neighborhoods. And as the prices climb, more buyers will enter the market. The location is great anyway, and there’s still a lot of good value in those neighborhoods.

Q: Will green-certified properties take over as the new gold-standard for real estate?

If the location is right, it’s definitely great to have. It can only help, no matter which segment of the market. It won’t necessarily break any deals if a building isn’t LEED-certified, but green is something I believe in. Besides, the new construction market is headed towards that direction anyway. If there are two close properties, and one of them has LEED certification, it’s always great to go with that one. Green is great!

Q: What is the main challenge for the real estate industry at this time?

It’s a funny time in that if you’re looking to sell a property but don’t do it now, you may not be able to get the numbers you want for a few years as we go into a cycle. If you’re trying to get the highest amount you can get, you might be sitting on the sidelines six to eight months from now. It’s better to be ahead of the curve with your price, because the longer any property sits, the more buyers will want to negotiate.

That said, if you’re going to look into any investor properties after you sell, it’s a good time because you can negotiate, not to mention it’s good for a 1031 exchange. You’re going to be looking at renting the property for three to five years before the market starts growing consistently again. It’s not increasing percentage-wise like it was eight to 12 months ago, but it’s still growing.

About Christopher Fry (Elegran Real Estate)