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REBNY 3Q 2014 Confidence Index: Brokers’ Confidence in Market Remains High Year-Over-Year, with Slight Slippage
November 1, 2014
--Dismay over lack of inventory offset by rising popularity of new outer borough neighborhoods, growth of TAMI sector--
The Real Estate Board of New York’s (REBNY) Broker Confidence Index released today showed that real estate brokers’ confidence was relatively stable in the third quarter of 2014, remaining above last year’s levels despite a slight decrease from last quarter.
The Broker Confidence Index rose from 8.75 in the third quarter of 2013 to 8.80 this past quarter, however broker confidence declined marginally over the last quarter from 8.88. Respondents expressed concerns over the continued lack of inventory in the residential market and the impact on leasing activity between commercial sub-markets with the emergence of the technology, advertising, media, and information (TAMI) sector. However, they were encouraged by the popularity of new outer-borough residential neighborhoods, leasing activity in Midtown South, and growth of the TAMI sector in New York City.
“The Broker Confidence Index still remains high and above levels seen in 2013, despite some concerns” said Steven Spinola, REBNY President. “Brokers are maintaining an optimistic outlook thanks to the volume of economic and investment activity, job growth, and new construction.”
The Residential Real Estate Market Confidence Index in the third quarter of 2014 was 8.23, a decrease from last year’s index of 8.30. Residential brokers noted the lack of inventory, specifically for middle-income housing, and the proposed tax on pied-à-terres as concerns.
One residential broker said that the proposed legislation “will have a massive effect on the market and will particularly impact luxury developers if the proposals go through.”
Another residential broker noted that expanding edge markets continue to hold promise with the popularity of new neighborhoods in the outer boroughs being a positive factor in the market, while another broker urged, “Buyers are cautious and sellers must be reasonable with pricing outside of the perennial hot neighborhoods.”
The Commercial Real Estate Market Overall Confidence Index in the third quarter of 2014 was 9.38, a small decline from 9.45 last quarter. Commercial Brokers’ noted that growth in the TAMI sector and activity in Midtown South has continued to create strong demand and diminishing supply.
One commercial broker said, “Lease rates in Midtown will begin to look more attractive as compared with the other two major sub-markets, Midtown South and Downtown.”
Another commercial broker noted how some companies are downsizing the amount of space they provide for each employee, opting for collaborative arrangements to better utilize space.
REBNY’s Broker Confidence Index is a collection of responses from an online survey given to REBNY’s residential and commercial brokerage division members.
About The Real Estate Board of New York
The Real Estate Board of New York is the city’s leading real estate trade association with more than 15,000 members. REBNY represents major commercial and residential property owners and builders, brokers and managers, banks, financial service companies, utilities, attorneys, architects, contractors and other individuals and institutions professionally interested in the city’s real estate. REBNY is involved in crucial municipal matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes and legislation. In addition, REBNY publishes reports providing indicators of market prices for both the residential and commercial sectors. Please visit us online at www.REBNY.com
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