OC Register: Summer Real-Estate Lull Mixed Bag for Unlikely Pro
Mike Shapiro has an uneasy feeling, one that’s refreshingly surprising for a real estate brokerage owner coming off a record month.
Shapiro is chairman of Hom Sotheby’s International Realty, a Newport Beach-based operation with a network of upscale-oriented brokerages stretching from Los Angeles’ Westside through Orange County’s beach towns and out to Palm Springs’ desert enclaves.
In June, Hom agents sold a company-best $325 million in property. Shapiro is stunned that it looks like July’s projected closings will be roughly half that sum.
One month doesn’t make a trend, he notes. But the sharp drop, paralleling other hints at economic anxiety, is, if nothing else, thought-provoking.
Shapiro, who in a previous career traded stocks, wonders if recent skittishness among Wall Street traders bubbled over into real estate. The continued modest level of overall economic recovery doesn’t help build huge momentum for property investments, even in the high-price communities that Hom serves. And global instabilities, political and economic, certainly don’t boost confidence.
“Something is up … I don’t know what,” the 51-year-old executive says.
Real estate executives usually don’t like to publicly ponder the downside. It takes gobs of enthusiasm to sell housing, so optimism – even when uncalled for – is often the spoken word. Considering the business Shapiro sees, his warning signal is noteworthy in itself, even if Shapiro isn’t the typical real estate pro. In fact, he never sought out the industry before odd timing led him to the trade.
And don’t forget Shapiro’s knack for financial timing – taking control of Hom in 2008 just as the housing market was bottoming. While he dismisses any grand wisdom in that well-timed bet in a self-deprecating way – “What did I know? Nothing!” – let’s just say I can’t ignore a hot hand.
Hom has blossomed under Shapiro’s watch from 56 real estate salespeople doing $200 million in business in a year to a flock of 365 agents with $2 billion in sales.
But running a real estate brokerage wasn’t part of Shapiro’s career plan. In fact, he was attempting a youthful retirement – at 45 – when the opportunity came.
The native New Yorker acquired his primary wealth by trading stocks – actually being a “market maker” for Merck Pharmaceuticals shares – in Chicago. But a decade ago his wife, Tara, faced some medical challenges. As a result, the couple decided to slow down their lives. In 2006, Shapiro retired to Newport Beach.
“That didn’t go well,” he admits.
He apparently doesn’t possess the stay-at-home persona. Plus, he had little interest in traditional retirement endeavors. So in his brief respite from the full-time working world, he took on some relatively part-time business efforts, none of which amounted to much.
Except in 2008. That’s when he failed to help merge an Arizona real estate brokerage with Hom. That oddly left Shapiro with the chance to recapitalize the relatively new Orange County realty firm on his own. Hom, founded in 2005, badly needed fresh financial oomph to fight off the ravages of the recession.
Quickly, Shapiro had to learn the real estate business, and it was a moment when the industry needed fresh eyes. Shapiro saw an industry where too many boom years made too many real estate salespeople forget what mattered most.