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REBNY 2nd Quarter 2016 Broker Confidence Index Report
August 15, 2016
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the second quarter of 2016 was 7.04, a .19 drop from the first quarter of 2016. There has been a slow, steady decline in overall broker confidence in the market since the fourth quarter of 2014 when it was 9.22.
Similarly, the overall broker confidence index for the market six months from now was 6.47, dipping .26 points from last quarter. This index has also continued to decline from the fourth quarter of 2014 when it was 9.23, the highest it had been since we began surveying our brokers.
Nevertheless, despite this trend, residential and commercial brokers remain cautiously optimistic and positive overall.
The drop in overall broker confidence in the current market and the market six months from now was driven primarily by the commercial broker index. Though the residential broker index is higher than the commercial index for this quarter, the general downward trend of the commercial index since the second quarter in 2015 has contributed to the overall decline of broker confidence.
The Commercial Broker Confidence Index was 6.57, an increase from last quarter’s 6.36. This marks the first increase in commercial broker confidence since the second quarter in 2015. Similarly, the Commercial Broker Confidence Index for expectations of the market six months from now was 5.71, up 0.16 from last quarter.
Concerns about our country’s political future and instability in China and Europe, have continued to influence the outlook of the commercial brokers. Some brokers voiced their concerns sensing a slowdown in the retail market due to the industry’s transition to mixed-use and online shopping. Others also felt that government regulations were affecting banks’ abilities to finance transactions. Despite the slowdown in retail leasing activity, there was still a fair amount of tech office leasing activity this quarter.
Our Residential Broker Confidence Index was slightly lower than last quarter with confidence decreasing to 7.52, down 0.58 from last quarter. Rising interest rates and the lack of sales inventory continue to be ongoing concerns among residential brokers in the current market and the market six months from now. Some brokers mentioned that domestic buyers are delaying on purchases because they anticipate the prices will drop. Foreign buyers have also grown more cautious due to Brexit and other global economic turmoil.
Residential broker confidence in the market six months from now dropped back down to 7.23 from 7.92 last quarter. Some brokers remain positive because the current lack of sales inventory creates more competition. Uncertainty over interest rates and the Presidential election left many residential brokers unsure of what market conditions will be like six months from now.