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REBNY 2nd Quarter 2018 Broker Confidence Index Report
September 6, 2018
The Real Estate Board of New York’s (REBNY) Real Estate Broker Confidence Index for the second quarter of 2018 was 5.53 out of 10, a decrease of 0.25 since brokers were surveyed about the first quarter of 2018. Commercial broker confidence increased in the second quarter of 2018 when compared to the first quarter, while residential broker confidence declined.
REBNY regularly surveys its residential and commercial brokerage division members to measure their confidence in the New York City real estate market now and six months from now. Survey results are published quarterly with a maximum index of 10.
The Commercial Broker Confidence Index (which focuses only on responses from members of REBNY’s Commercial Brokerage Division) in the second quarter of 2018 was 6.43, an increase of 0.41 since brokers were surveyed about the first quarter of 2018. The Commercial Broker Confidence Index grew by 0.49 year-over-year, up from 5.94 in the second quarter of 2017.
Unlike the first quarter of 2018, when brokers were confident about tax reform, commercial brokers are now concerned about increasing interest rates, tariffs, and political instability. Despite these conditions, and even though they are uneasy about the market six months from now, commercial brokers remain positive overall about the present situation in the current market.
The Residential Broker Confidence Index (which focuses only on responses from members of REBNY’s Residential Brokerage Division) was 4.63 this quarter, a decrease of 0.91 since brokers were surveyed about the first quarter of 2018 and a considerable decrease of 1.31 since the second quarter of 2017. The second quarter of 2018’s Residential Broker Confidence Index is currently below five, which indicates that brokers’ confidence related to the market is negative.
Residential brokers are less confident than commercial brokers about the present market and the market six months from now. Many residential brokers expressed concerns about tax reform, rising interest rates, an oversupply in the market, and political instability. These concerns affected their outlook on the future (six months from the date the survey was completed) and the Future Confidence Index, which was 4.46, a 1.18 decrease since the first quarter of 2018. Residential brokers indicated that buyers are slow to make decisions, while sellers are reluctant to lower their prices. Meanwhile, in the rental market, residential brokers noted that renters are less inclined to pay brokerage fees. These issues led to the record low Residential Broker Confidence Index of 4.63 in the second quarter of 2018.