REBNY 3rd Quarter 2017 Broker Confidence Index Report

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The Real Estate Board of New York’s (REBNY) Real Estate Broker Confidence Index for the third quarter of 2017 was 6.00 out of 10, a 0.11 increase since the second quarter of 2017. Improved confidence in residential financing and commercial leasing drove this increase in overall market confidence.

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.

The Commercial Broker Confidence Index in the third quarter of 2017 was 6.27 out of 10, an increase of 0.43 since the second quarter of 2017. The responses from each of the seven multiple-choice questions were indexed above 5.0, showing overall positive confidence in the Commercial Real Estate Market.

Commercial brokers responded more positively to questions about the current and future leasing markets than in the second quarter of 2017. Similarly, responses to the question asking for brokers’ assessment of the current leasing market were indexed at 6.38, an increase of 0.95 since the second quarter of 2017, while responses to the question asking for their expectation of the leasing market six months from now were indexed at 5.53, a large improvement of 1.94 from the index of 3.78 in the second quarter of 2017.

In contrast, commercial brokers were less optimistic about the current and future financing markets. Responses to the question asking for brokers’ assessment of the current financing market were indexed at 6.76, a decrease of 0.66 since the second quarter of 2017, while responses to the question asking for their expectation of the financing market six months from now were indexed at 5.41, a decrease of 0.88 since the second quarter of 2017.

Our Residential Broker Confidence Index was 5.74 out of 10, a decrease of 0.20 since the second quarter of 2017. Dwindling confidence in the current and future rental markets accounted for this decrease. Responses to questions asking for brokers’ assessment and expectations of the rental market were indexed at 2.24 and 2.86, respectively.

But residential brokers’ responses to questions about the current and future financing market for residential sales were more positive than in the second quarter of 2017. Responses to the question asking for brokers’ assessment of the current financing market were indexed at 9.18, 0.44 greater than in the second quarter of 2017. Broker confidence in financing has rebounded from a low of 7.85 in the fourth quarter of 2016, a period which coincided with the first interest rate hike by the Federal Reserve in many years. The current confidence index suggests that a rising interest rate has not cooled residential broker confidence in financing.

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