"People are very price sensitive now. They want a deal. I think because you can't put your money anywhere and be safe today, people who believe in real estate will eventually invest because they know a house is going to be there."
Twenty years ago, Dottie Herman was a young Long Island real estate agent ready to take a gamble. Now she's head of a 4,000-employee real estate empire that stretches from Manhattan to Montauk. Who's Who spoke with Herman about her rise and the region's weakened real estate market.
How did you first get involved in real estate?
I started out in real estate on Long island in the late 1980s. I was a financial planner for Merrill Lynch just as they were opening real estate offices across the country. I got my license and started selling for them. They were a big corporate player back when most real estate was still sold through little mom-and-pop shops. They really spent a lot of money training people, so I was very fortunate.
How did you end up running your own firm?
Merrill decided to get out of the real estate business. They had probably 1,000 offices across the country, so they broke them up by region – West Coast, Midwest, Northeast. I was probably in my late 20s at the time. I was freaking out about losing my job when someone said, "well, why don't you just buy the company." And I said, "well, I have no money." And they said, "well, just say that you do." So I wrote a letter saying I had venture capital and blah, blah, blah. At the end of the day, they financed me no money down. I maybe had $1,000 in the bank. I had nothing to ever pay it back with, but I was young and I really wasn't afraid.
Your firm is Prudential Douglas Elliman. How did those names become involved?
As things went on, Prudential bought the whole company from Merrill. I was doing well selling in the Hamptons. I then went to Prudential after 9/11 and said I wanted financing to buy a company in Manhattan. Somehow, again, I was able to convince them to lend me the money to buy Douglas Elliman. Needless to say at the time, it seemed like a bad move. We were under orange alerts and red alerts. The city was still jittery. My banker said, "we're crazy. Let's not do this." I said if they blow up Manhattan again, we'll have a sign saying "Hamptons this way." So we bought Douglas Elliman for $72 million.
Real Estate numbers nationally are way down. How are your markets doing?
I think it's been a lot worse than people thought it would be. The suburbs really started feeling this a year or a year and a half ago. The Long Island market was on the endangered list because there was 20 percent appreciations in home values, but the job numbers didn't follow them. So people kind of priced themselves out of the market. In 2007, I had such a phenomenal year that my banker called me to make sure the numbers were right. It was an abnormal market. Things didn't stay on the market for more than a day. We got used to that type of market and that's gone now.
What's the mood out there? People are very price sensitive now. They want a deal. I think because you can't put your money anywhere and be safe today, people who believe in real estate will eventually invest because they know a house is going to be there. As far as the impact of layoffs in the financial district, I just don't know. A lot of these guys made so much money that I don't think they'll be in the streets. It's going to be a very different time. No one's ever seen anything like this.
Any good news?
The good news about New York is that we don't have the same amount of inventory out there. Places like California, Vegas and Florida—those markets really were saturated. We have more inventory than we did in 2007, but I'd say we're up to a normal amount.
Any moves that could help the market?
One thing that needs to change is that people need to be able to get credit. Whether it's for college or a business or just a credit card, you need to be able to get credit.
Now that you're president of this massive firm, what's a typical week like?
I leave Long Island Sunday night around 10. I get up in the morning and work out at 6:15. I go to my office at 575 Madison. I meet with my marketing department, I answer all my own email and work directly with the agents. I'm in the city most of the week and then on Friday I leave early for the Hamptons and work a day or two there.
When you're not running a firm of 4,000 agents, what do you do to relax?
Truthfully, I'm always running. I know that's a bad thing. I work out and that is really relaxing. It takes my stress away. I don't go away enough, but I like a nice dinner and a nice glass of wine. I like to stay with people I'm close with and I have lots of good friends from over the years.
You've lived on Long Island your whole life. What is the most "Long Island" thing about you?
Well, I guess my accent! Also, after growing up here, I could never live in a place that didn't have an ocean.
Where's a good place to go on Long Island? Americana Shopping Center in Manhasset has every store lined up in a row – Armani, Dolce – every designer you could imagine.
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