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REBNY 1st Quarter 2018 Broker Confidence Index Report
July 2, 2018
The Real Estate Board of New York’s (REBNY) Real Estate Broker Confidence Index for the first quarter of 2018 was 5.78 out of 10, a decrease of 1.21 since brokers were surveyed about the fourth quarter of 2017. Residential and Commercial Broker confidence was decidedly more upbeat in the fourth quarter of 2017, but market confidence in the first quarter of 2018 was positive overall.
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 in the first quarter of 2018 was 6.02, a decrease of 1.39 since brokers were surveyed on the fourth quarter of 2017. The Commercial Broker Confidence Index has grown by 0.74 year-over-year, up from 5.28 in the first quarter of 2017.
The Commercial Broker Confidence Index is lower than the last quarter, when brokers expressed confidence surrounding expectations of the recently-passed federal tax reform. Assessment of the current leasing market in the first quarter of 2018 showed confidence with responses indexed at 6.49 (Table 4, Question 5), a slight drop of 0.23 since the fourth quarter of 2017. One office leasing broker attributed current confidence to actual effects of tax reform, writing “Tax cuts are already leading to hiring and expansion.” The Commercial Broker Confidence Index decline is attributable to concerns about the leasing and financing market six months from now. Brokers were uncertain about the future when they wrote “Who knows how [WeWork’s business model] will work out”.
The Residential Broker Confidence Index was 5.54, a decrease of 1.03 since brokers were surveyed in the last fourth quarter of 2017. The Residential Broker Confidence Index, though still positive, has been trending downward since last year with the exception of a noticeable uptick in the fourth quarter.
The drop in the Residential Broker Confidence Index is attributable to responses to the future rental market question which was indexed at 5.01 (Table 5, Question 6), a decrease of 0.53 since the fourth quarter of 2017. Residential brokers revealed some uneasiness about the sales financing market which was indexed at 7.17 (Table 5, Question 3), a 1.59 drop from the fourth quarter of 2017. The belief that the residential market benefited from tax reform may have boosted confidence in the fourth quarter of 2017. However, the residential broker responses in the first quarter of 2018 suggest that they have returned their focus on actual market conditions.