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REBNY 4th Quarter 2015 Broker Confidence Index Report
February 19, 2016
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the fourth quarter of 2015 is 7.87, a .47 drop from last quarter’s 8.34. Likewise, confidence in the market six months from now was 7.57, dipping .30 points from 7.87 last quarter.
This slight drop in confidence in the current market and the market six months from now was driven by a drop in confidence by our commercial brokers. Concern about the national and international economy has tempered the outlook of the commercial brokers. Our residential brokers reported higher confidence levels that last quarter. However concerns about rising interest rates and the lack inventory continue to worry the residential brokers in the current market and the market six months from now. Nevertheless, the overall level of confidence of the residential brokers and the commercial brokers remains positive despite the dip.
The Commercial Broker Confidence Index was 7.88, a decrease from last quarter’s 8.85. Similarly, the Commercial Broker Confidence Index for expectations of the market six months from now was 7.24, down .93 from last quarter’s 8.17. Anticipation of interest rate increases in the future, their potential impact on job growth and uncertainty about the local, national and global economy were the brokers’ key concerns. Financing for commercial real estate sales six months from now was also an issue causing unease for the commercial brokers.
The Residential Broker Confidence Index increased slightly to 7.85 from 7.83 last quarter, though lack of inventory specifically in the $1-5 million range was cited as a concern. The lack of inventory has been an ongoing concern for nearly two years with our residential brokers. Despite inventory concerns, our brokers remain positive and believe the market will continue to move in a positive direction.
Residential broker confidence in the market six months from now moved back up to 7.9, from 7.58 last quarter. The brokers have remained upbeat despite differing assessments of the Manhattan and borough markets. Brokers stated that the Brooklyn rental market may still weaken the Manhattan market. The uncertainty of interest rates and the volatility of the stock market left many residential brokers unsure of what the market conditions will be like six months from now. Other brokers though stated that the New York City real estate market is a safe haven for foreign investment and believe that the market will remain strong during the next six months.