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REBNY 1st Quarter 2016 Broker Confidence Index Report
May 9, 2016
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the first quarter of 2016 is 7.23, a .64 drop from last quarter. There has been a slow, steady decline in broker confidence in the market since the fourth quarter of 2014 when it was 9.22.
Likewise, the confidence index for the market six months from now was 6.73, dipping .84 points from last quarter. Similarly, this index has continued to decline from the fourth quarter of 2014 when it was 9.23, the highest it has been since we began surveying our brokers.
Nevertheless, despite this trend, the overall level of confidence of the residential and commercial brokers remains positive.
This drop in confidence in the current market and the market six months from now was driven primarily by the commercial broker index. Concern about our country’s political future, specifically the presidential elections and global economy, has tempered the outlook of the commercial brokers and continued a downward trend since the second quarter of 2015.
The Commercial Broker Confidence Index was 6.36, a decrease from last quarter’s 7.88 and the first time this index dipped below 7 since we began in 2013. Similarly, the Commercial Broker Confidence Index for expectations of the market six months from now was 5.55, down 1.69 from last quarter, which was the greatest drop in future confidence since the inception of this survey. Anticipation of interest rate increases in the future, concerns about the influx of new office space and uncertainty about the presidential election were the commercial brokers’ key concerns. Rising asking rents were also an issue causing unease for the commercial brokers.
Our Residential Broker Confidence Index was slightly higher than last quarter, with the overall confidence increasing to 8.1 from 7.85 last quarter. However, continuing concerns about rising interest rates and the lack of inventory continue to worry the residential brokers in the current market and the market six months from now. Similarly, brokers active in the rental market expressed concerns about the number of new units scheduled to come on the market in Brooklyn in the next two years. This is expected to slow price growth.
Residential broker confidence in the market six months from now moved back up to 7.92, from 7.9 last quarter. The brokers have remained upbeat despite differing assessments of the markets throughout the boroughs. The uncertainty of interest and mortgage rates and the volatility of the stock market left many residential brokers unsure of what the market conditions will be like six months from now. Despite this, many stated that the New York City real estate market remains positive.