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Broker confidence down slightly in 3Q
November 20, 2013
New York City continues to be one of the most prosperous and dynamic real estate markets in the world. However, expectations about future market performance were disrupted by the recent government shutdown and debt ceiling debate.
Last week, REBNY released its Real Estate Broker Confidence Index (“Index”), which polls hundreds of real estate broker
s working throughout the City each quarter. The Index survey consists of eight questions that ask participants to assess the current market and their expectations of the market six months from now.
Overall confidence for the Third Quarter of 2013 decreased slightly compared to last quarter, due primarily to concerns about political uncertainty in Washington and the lack of residential inventory. The City’s brokers also lowered expectations for their six-month outlook, even though they reported strong confidence in present financing conditions.
We think the residential real estate market’s lower overall confidence stems from ongoing inventory shortage within the residential market. Residential brokers were mainly concerned about the low production of affordable housing and increasing high end developments coming to the market, which is skewing the market in favor of very high income buyers, many reported to be non-New York City residents. Despite these concerns, residential brokers are hopeful that more developments favoring various household incomes will come to the market, improving the local economy and housing market.
The latest increase in brokers’ confidence in the current market was chiefly due to the increase in confidence in the financing market for commercial real estate sales, for which an index of 10 was recorded. By contrast, the residential financing average response was a 6.16, the lowest we’ve seen. It is likely that confidence is being deflated by federal budget uncertainty coupled with more stringent Freddie Mac and Fannie Mae lending criteria.
Both residential and commercial brokers showed concern about the market six months from now due to the recent government standstill and the effect that any decisions will have on interest rates and the economy as a whole. We hope that a long-term resolution of the budget and borrowing issues in Washington will ignite a burst of confidence in the market and a pick-up in new residential construction activity to serve all New Yorkers..
A full copy of the REBNY Broker Confidence Index can be found at www.REBNY.com.
In other REBNY News:
The Residential Upper Manhattan Committee will host its annual dinner and panel discussion this evening at Mist Harlem Events in the Kalahari at 46 West 116th Street from 5:30-9pm. The discussion panel, titled “2013: Harlem The New Reality 2.0”, will feature Gregory Heym of Terra Holding, William Gumb and Jeffrey Szymanski of Wells Fargo Mortgage Company, Dana Gordon of the Andrews Organization, Barry Deonarine, Esq, Wayne Benjamin of the Harlem Community Development Corporation, Scott Metzner of Janus Property Company, and William Wallace IV of the Continuum Company LLC. For more information, contact Desiree Jones at firstname.lastname@example.org.
Don’t miss the next Commercial “Crossfire” event, which will be on Tuesday, December 10th in the REBNY Mendik Center in 570 Lexington Avenue from 5:30pm-7:00pm. Entitled “Modernizing New York Through Midtown South & Beyond”, the panel will feature: Mark Lapidus, Director of Real Estate Operations for WeWork; Debra Larsen, Founder & President of Workhouse; Jake Schwartz, CEO of General Assembly; Ryan Simonetti, CEO of Convene; and Ed Minskoff, Founder & Developer of Edward J. Minskoff Equities. Keith Turco, President of Gyro Advertising, will moderate. The event will be free for REBNY Members, but registration is required as seating is limited. To register please visit the events calendar on REBNY’s website. For more information, contact Desiree Jones at email@example.com.
The Commercial Division Holiday Luncheon will be held on Tuesday, December 17, 2013 in the Vanderbilt Room at the Waldorf Astoria Hotel from 12:00pm-2:00pm. Jonathan D. Gray, Global Head of Real Estate of the Blackstone Group, will be the guest speaker. Tickets are $95 per person, to register please visit the events calendar on REBNY’s website. Seats are limited; act now to reserve your spot! For more information, contact Desiree Jones at firstname.lastname@example.org.
REBNY will host its 118th Annual Banquet on Thursday, January 16th at 7pm at the New York Hilton. Join us for the event of the year as we honor six great New Yorkers: Stephen L. Green, Chairman of SL Green Properties, Kenneth Fisher, Senior Partner of Fisher Brothers, Joel I. Picket, Chairman and CEO of Gotham Organization, Robin Abrams, EVP of The Lansco Corporation, Thomas L. Hill, SVP at Boston Properties, and Robert C. Fink, Director of Leasing for the Winter Organization. For tickets or advertising information, contact Maryann Aviles at email@example.com.