You say tomato, I say potato...

Yesterday's Interfirm Forum at The Real Estate Board of New York included two speakers addressing the present state of the NYC real estate market. The first speaker, an economist with one of NY's largest residential management/brokerage firms, emphasized the greater importance of individual income (how much people are making) over jobs (how many are working) as a determinant of market strength. The second speaker, a principal with one of NY's largest full service property sales companies specializing exclusively in the sale of large investment and user properties stressed otherwise, insisting on the greater importance of jobs over income as a determinant of market strength. Many in the audience wondered, who's right?

In using the concept of homology we often need to consider two results or representations that seem alike through common function but whose differences become evident upon examining their different histories, e.g. for early biologists the tail of a fish and the tail of a whale were thought synonymous but when they realized one tail moved horizontally while the other, vertically, the discovery and further implications of their very different origins eventuated. The converse of this can also be true. So what am I saying here? Ah, nothing...I'm really quite out of my mind and flying off on some weird tangent--perhaps the result of too much "whatever" during the 60's; but, to get back to the point, and being mindful, we see no conflict between these speakers once we consider their specific positions and clientele. Very simply, the economist, coming from the residential brokerage side sees success derived from selling to those individuals who remain capable but need sufficient income to qualify under the new, stringent requirements for loan approval. Alternatively, the commercial broker, who deals with large multi-unit buildings, attributes success from having a fully occupied income producing property supported by a complete rent roll. As such, he's most sensitive to the vacancies that occur when tenants leave or are unavailable because of lost jobs. It's also interesting to note that in assigning actual value to "product", the residential broker tends to use the comparable approach (looking at what others have paid for similar properties), while the commercial broker is more likely to use the income approach (defining value by looking at how much money the property is supplying to its owner), and this further reflects the reasons behind their different interpretations of what's most relevant.

--Leigh Zaph. (any comments can be emailed to us at, thanks).