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REBNY 1st Quarter 2014 Broker Confidence Index Report
May 1, 2014
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the First Quarter of 2014 showed that brokers overall confidence increased compared to last quarter, to 9.21 from 9.0. The brokers are confident about the current market and in the market six months from now. For the first time since we began conducting the survey, confidence scores in every category for both residential and commercial brokers compared to the previous quarter. Both commercial brokers and residential brokers are more confident in the market in the first quarter of 2014 compared to last quarter.
The Confidence Index for Residential brokers increased in the First Quarter to 8.8 compared to 8.5 last quarter.. Despite the increase in confidence, many brokers still expressed concern about the current lack of inventory, especially in Manhattan and Brooklyn. This lack of inventory has been pushing prices up and pricing buyers out of the market according to our residential brokers who responded to the survey. One broker stated, “Low inventory in most of Manhattan continues to push prices higher and leave many buyers on the sideline.” On the other hand, brokers also reported that the lack of inventory has been causing bidding wars. As one broker stated, “There is no inventory, making it quite difficult on the buyers- resulting in bidding wars, which is fine for sellers but an overall difficult situation.” Despite these challenges, brokers still expect the market to be strong six months from now, with hopes that more inventory will come online in the coming months.
The Commercial Real Estate Market Overall Confidence Index rose to 9.62 from 9.49. Commercial brokers have positive views about the current market and where it will be six months from now. Commercial brokers expressed some concern about the lack of inventory. However, the commercial brokers continue to express concern about the inevitable rise in the interest rate, stating that it has been the biggest factor affecting commercial market this quarter. Nevertheless, they remain extremely confident in the market.
With high expectations for the future from both residential and commercial brokers, both stated that they anticipate a very active spring and summer, as the low inventory creates a strong market and will continue to do so. An increase in both Overall Confidence and Overall Expectations from both types of brokers for the First Quarter of 2014 shows a generally positive outlook on the real estate market now and into the middle of 2014.