Radio Interview with Demetrios Salpoglou
Interviewer: I’m on the phone today with Demetrios Salpoglou, Owner and CEO of Nextgen Realty, Boardwalk Properties and Jacob Realty. And I like to say thanks to Demetrios for agreeing to this interview.
Demetrios Salpoglou: It’s my pleasure.
Interviewer: Thank you. We’d like to get your take on a few of the trends concerning property owners and renters in and around the Greater Boston area. As you know, we do these interviews with many real estate agents, and we like to get your take on matters. First of all, are home sales and property prices still on the rise, and what should a home seller in Boston know right now about selling their Boston home?
Demetrios Salpoglou: Prices are definitely on the rise. I think it’s more of a supply problem per say than an overall economic boost, but it’s definitely a sellers’ market right now, and if a seller is interested in selling, now is the optimal time in my opinion.
Interviewer: And so that’s the most important thing for them to know right now is to take action?
Demetrios Salpoglou: Yeah. I mean everything in life is about timing right? I think that right now you should put your property out to sell if you have even remotely thinking about it, at least in the Boston area. I think what you’re seeing is an amazing amount of buyers out there and not much supplying and it’s driving prices very high. Last week alone we have several of our sales agents produce over nine over asking price offers and at least five of them still didn’t get the deal under agreement. I haven’t seen an environment this heated and with this much momentum since at least 2007. So we appear to be going back to a upward momentum period, and I don’t know how long it’s going to last, but it’s a very exciting period from a sellers perspective where you’re getting great offers on properties and closing quickly.
Interviewer: That’s really good to know. Some of our listeners will be happy to hear that I’m sure. Well, let’s switch over to renters. With low vacancy rates, is it really tough to find a great apartment and are there enough apartments for people to rent?
Demetrios Salpoglou: Well, talking about Greater Boston apartment rentals in the aggregate, the overall market that we’re seeing for the past two years has been very interesting with huge rental price increases averaging 10% per year for the last two years. From afar this would seem somewhat counter intuitive with the overall weak economy, and we haven’t really seen any statistical data to backup why we are seeing this spike in rents, but it’s very interesting. So, if we go back just two years, we see rents go up by 10% and then we see rents go up by 10% into the current marketplace. And so over the past two years, we’ve seen a 20% increase in rent. Now, again our offices cover multiple areas regarding Greater Boston and I’m speaking in the aggregates in areas that we cover, which is pretty much bended out across the entire route 128 Belt going into Boston. And so we’re not sure what’s causing it per say, however, we do know that there has been a dearth of construction over the past five years so perhaps it is simply population growth catching up with supply. And so, are there enough apartments for people to rent? I think that is general narrative that I am asked frequently. My answer is our supply is much lower than it was last year, and while we can see supply is in the pipeline, I think we are going to be tight on supply for at least the next 48 months. Our real time apartment vacancy rate indicator in our database is 50% lower than it was last year at this time. That is a huge decrease in available apartments. One thing that we notice a lot is that when price of apartments increases people tend to move a lot less because usually they are moving into a much more expensive apartment so that further slows down supply. It’s a statistical analysis that we look at in terms of the vacancy rates.
When we look at our real time database, we have about 115,000 listings in our apartment database, calling over 14,030 landlords on a frequent basis. We place tens of thousands of phone calls per year to our current landlord base and also reach out to new landlords to get additional real time data. What our landlords are saying is that they’re seeing their properties get rented much quicker this year and they’re raising their rents from 6-12% on average depending on size, location and price of unit. And so, can an apartment be acquired in Boston? Absolutely! Does it require a consumer to move faster to grab that apartment? Absolutely! And, are they going to have less stuff to look at than they did even 48 months ago? Absolutely, there is no question. So I think what it comes down to is, the willingness of the consumer to jump and grab an apartment as quickly as possible and maybe not hold out hope for the perfect apartment, hope that they can get the best apartment in just a couple of quick showings, maybe they need to look a bit more frequently, but they must be able to close quickly when they find that apartment that they were looking for, does that make sense?
Interviewer: I see, yeah it does. So they should be ready to close when they go in and view an apartment that’s available so that they can get the apartment.
Demetrios Salpoglou: Right. I think having checks in hand, I think having applications ready, your willingness and speed to get the proper paperwork completed including necessary credit checks and co-signers, whatever is applicable, I think all these factors need to be all in play and be immediate. Those that who prepare are the ones that are going to be able to secure the best apartments. And there are people out there looking for apartments that have lost apartments because they didn’t get their paper work done quickly enough or properly in terms of what the landlord was looking for in terms of expediency and so they’ve lost apartments and now they’re better prepared. So the overall environment out there is a – not only are you looking for an apartment, but you better have your requisite paper work ready or your deposit ready so that you can in the event that you do find something move quickly to secure it because it’s not just about looking at apartments, at the end of the day it’s being able to actually close on an apartment leasing transaction for not only the consumer but also for the leasing agent. So proper coaching from a real estate leasing professional is certainly important inside the City of Boston. Working with the right agent can make the biggest difference in the world.
Interviewer: That’s great information and we certainly are in a fast moving environment. And so a lot of innovations out there as well in both the sales and the rental space and I’m curious what major innovations have you deployed in your Boston real estate services over let’s say the last year?
Demetrios Salpoglou: We’re constantly innovating. I think if you don’t innovate, you fall behind, and quite quickly. This market moves so fast that you have to constantly implement new innovations. With that said, we deployed a whole host of faster servers, new websites that we’re constantly rolling out, and new technologies that make it better for sharing information. We are currently getting our technologies deployed across different platforms and also really focused syndicating our data to disparate websites and feeds. So there are more avenues out there now than ever to get your listing out there. This poses both opportunities as well as challenges. The internet keeps growing larger every year so the medium is becoming more diffuse and diluted. So now there are multiple websites, there are more blogs, and there are many different social media sites. So you really have to employ syndicating technologies, that’s really what we’re doing very well over the last year.
Interviewer: I see. And what innovations do you see having the most impact on home sales and apartment rentals, combined what innovations do you see having the most impact in the market?
Demetrios Salpoglou: I’m not sure yet on what innovations are impacting home sales or apartment rentals the most. I think that there is difference between let’s say – we call it the digital world and then the analog world, right. So, in the digital space we’re constantly adding innovations which empower the consumer giving them better data. We are constantly giving them better pictures with better resolutions, virtual tours, panoramic pictures, galleries and then also providing current and historical data that I think allows that to make an educated decision of whether or not they’re getting that great apartment at a competitive rate in the right area that they were looking for. So I think that those data displaying innovations are going to continue to accelerate such as: better graphing, better graphics, more social information, better neighborhood and school data, more user rich experience information will get displayed. That I think is what is on the way, and coming fast in front of us on the digital side. This explosion of valuable data can certainly help educate people on home sales and apartment rentals.
On the analog side, I think it’s very important that Landlords focus on improving their properties per say, and making them have modern design, tastes, colors and amenities that consumers are looking for in droves. That we have often seen that regardless of a tight rental and sales market that outdated layouts and poor quality properties are often difficult to rent or sell regardless of price within reason. We have seen many landlords make mistakes by not adding value to their properties and they go down the slippery slope of lowered rents and their properties going into disrepair. It’s been interesting to note that we have seen more properties than ever being renovated at a much quicker pace than we have used to be historically seeing. The digital world often has a huge impact on the analog world. It makes landlords more competitive and also provides them with data on what they need to do to make their properties more desirable. So while the digital world will always be faster than the analog world they are both increasing their speed. Does that make sense?
Interviewer: Yeah. It makes absolute sense and of course it’s a competitive market. So those that have made analog improvements to their own property could win out big over someone that has not made those improvements?
Demetrios Salpoglou: Well, 100%, putting strategic money into a property is vital to unlocking its total potential value. There is no question about that. Certainly, working with professional real estate agents or professional contractors and having a good eye of what is trending in terms of real estate in Boston certainly can help you make or realize the full substantial value of your property. We have helped thousands of landlords not only increase their top line numbers dramatically, but more importantly there NOI or Net Operating Income. To me it is all about the NOI. We make strategic consulting recommendations to landlords all the time and they love us for it. We empower them by giving them the data that we need. When you have thousands of units in your database and many of them are on the same street that the landlord has their property on, we can give them the right data on whether to buy, sell, rent or rehab for maximum return. Data and extensive gallery and video database help unlock many of real estate mysteries. Having 336,050 pictures of apartments certainly can make a huge difference to show a landlord what is the best course of action.
Interviewer: Absolutely, and of course that’s part of the reason why we do these interviews, and we like to thank for you the interview, and ask you just one final question. Which is – we ask this with all to the agents and brokers that we interview. What’s a primary reason folks should come to your company for help?
Demetrios Salpoglou: I think at the end of the day, when you strip away all the marketing hype of various companies, all roads point back to how much data do you really have, and how can you provide that in an effective manner to end users. It comes down to data, and when you want to work with a professional company, you want them to provide you the greatest amount of data and strategic advice. Find a company that has rented thousands of apartments per year for a decade and ask them. Find a company that can give you pin point accuracy on what you can sell or rent your properties for. Find companies that have the most websites and greatest web traffic. And so, I started this conversation with you under the concept of providing the most data gives the consumer the best choice in their decision making process. We have the most landlords in our database, we have the most apartment listings in our database, we have the most pictures in our database. We have the most apartment videos, virtual tours and panoramic galleries of any real estate company in New England. As an example, we have 336,050 pictures in our database representing over 30,100 galleries. We have over 6,000 videos; we have nearly 1,000 virtual tours. Now, when you provide that data out on to the internet and you have people being able to look and come to share information, being able to see that vast amount of inventory empowers a consumer. Not only that, but if you have a professional real estate agent working with that data, they can look at that data and help not only the consumer, but the landlord price that property properly so that it is rented quickly and best price possible for all parties. So data becomes the great equalizer and smooth’s out the highs and lows of many disparities.
So I think that at the end of the day, working with us gives you a huge advantage, it gives end users: scalability, accountability, efficiency and it gives the consumer ease of use. Thus instead of clients having to set up hectic and constant appointments with their friends to go see small disparate real estate companies that provide little in terms of inventory and thus decisions are often made hastily and not in the best interest of the consumer. If a real estate company does their job properly and have enough inventory, then the end user experience is much better and time efficient. If you come to us, you have the real opportunity of possibly going seeing 10 properties when say another company might be able to only show you two. So with us, it’s a much greater concentration of available units at one time, on one showing, over a greater geographic footprint, giving you the best window of what’s available at that moment in the Greater Boston area. So that produces a powerful satisfaction element for a consumer and ultimately produces better results.
Interviewer: Well, you heard it hear at Boston real estate reviews. Thank you so much for your time today. I know that you’re super busy. We’ve been with Demetrios Salpoglou, CEO and Broker at Nextgen Realty, Boardwalk Properties and Jacob Realty. Thank you so much for your time Demetrios and have a great day.
Demetrios Salpoglou: You’re welcome Brent anytime.
Interviewer: Thank you. Bye-bye.